Automotive News - September 21, 2020 - Best Practices Supplement - S33

SEPTEMBER 21, 2020 | 33
C O L O N I A L T OYO TA , M I L F O R D, C O N N .

Old grocery full of cars, customers
Vacant site gets buyers
out of weather, doubles
Conn. dealership's size
Published in Automotive News Oct. 28, 2019

Larry P. Vellequette
lvellequette@crain.com

acant commercial storefronts -
the real estate remnants of retail
consolidation and the ongoing consumer trend toward shopping online
- litter urban and suburban landscapes
across America.
But in Milford, Conn., when a
35,000-square-foot grocery store closed next
door to his Toyota dealership, third-generation dealer Bobby Crabtree spotted a retailing
opportunity in that vacant building. This
spring, Colonial Toyota opened what it calls
an indoor car center in the former grocery
store, bringing a significant portion of its inventory out of the elements and under a roof.
And the effect, Crabtree says, was nearly instantaneous.
"It was like we lit a fuse. We opened the
doors to this indoor car center, and boom,
we're selling an extra 50 cars a month," said
Crabtree, the owner of Colonial Toyota. "We
went from 250 or 260 new and used a month
to 300 or even 320."
The whole process was not instantaneous,
but something Crabtree and his team worked
at over several years. But even in these early
days - the car center's added value remains
as yet untested through Long Island Sound's
rugged winter weather - Crabtree says the
building is already boosting business and
adding profitability in unforeseen ways.
"I like to call this our Louisiana Purchase,
because it doubled our size from 4.5 acres to
almost 9 acres, and in the Northeast, that
much real estate is kind of unheard of," Crabtree said.
It took Colonial a year to renovate the building: gutting it, sandblasting the floor, converting its former 10,000-square-foot stockroom
into a 10-bay prep area and photo booth, and
doing other interior and exterior improvements.
The cost of the renovation project was $1.7
million - a 42 percent bump above the building's $4 million price tag. The exterior renovations were done to match the dealership's facade, while inside, the store's support col-

umns serve as makeshift street signs to
highlight different vehicle lines.
But it's already broadened the dealership's appeal, Crabtree says. "We're attracting people from greater distances.
And we don't talk about price or don't
talk about gimmicks in our advertising.
Now it's the presentation of the car. And
when you walk in, you look at over 100
cars as though they're outside."
The opportunities to repurpose existing retail space into an indoor showroom are growing in most markets across the nation. According to the National Association of Realtors' most recent quarterly Commercial Real
Estate Trends and Outlook, retail space had
the highest vacancy rates among the commercial asset classes. The sector also had the lowest sales activity among commercial real estate classes, the survey said.
Prior to adding the indoor car center, Colonial's vehicle prep area had been a bottleneck
in its sales operation, with customers often
having to wait while their new vehicles were
prepped for delivery. Since the center opened,
though, most of the vehicles parked inside are
already largely prepped for delivery - meaning they're ready to go when the financing is
done, Crabtree says.
"Because of the indoor car center, we're getColonial Toyota purchased the
shuttered 35,000-square-foot grocery
store next door and converted it into
an indoor car center.

Sales surged after Colonial Toyota
opened a car center in a former
grocery. "It was like we lit a fuse,"
says dealer Bobby Crabtree.

ting people in and out so much faster," he says. "There are still plenty of
cars outside, but many times, customers take the car in the showroom that is
clean and ready to go."
There were other expenses as well. Colonial
added another sales manager and bolstered
its sales team to keep its new facility staffed,
and of course, there are additional expenses
for utilities, taxes, maintenance and other
fixed costs, Crabtree said.
"When you take on this kind of additional
expense, you can't have a lot of fat. Although
the expenses did go up, in a weird way, it was
healthy, because the expenses that went up
were directly related to sales," Crabtree explained. "Where we increased our expense,
we fortunately increased our gross. Year to
date, our net to gross is up every bit of 10 percent."
What remains to be seen is the effect Colonial's indoor car center has during New England's long, sometimes brutal winter. Given
its fair-weather performance, Crabtree said
he's optimistic about how consumers will respond to the opportunity to step out of the
cold when they're shopping for a new vehicle.
"Frankly, we were expecting the surge to
happen in the winter," Crabtree said. "In the
wintertime, it's going to be that much more of
a selling point." e

Automotive News - September 21, 2020 - Best Practices Supplement

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