- Over the last decade, auto retailers have seen low growth, but leading auto part retailers like AutoZone and O'Reilly have delivered consistent strong growth through superb execution and share gains.
- Growth accelerated following the COVID pandemic as consumers had more time and stimulus money to work on their cars and chose to drive over taking public transport.
- Auto part retailers will further benefit from the sharp cutback in new car production resulting from the current semiconductor shortage.
- Fears of competition from pure online competitors may be overblown as physical stores are essential to meeting the quick delivery time demanded by customers who depend on their cars in their daily lives.
- I believe O’Reilly has more upside potential, but AutoZone's relatively lower valuation makes it an attractive alternative for more conservative investors.
For further details see:
O'Reilly Automotive: A Diamond In The Slow-Growing Auto Retail Market