US auto parts suppliers compete for repair shops: preferred suppliers capture about two-thirds of purchases

Why are repair-shop purchases worth competing for?

Bernstein's telephone survey received responses from 105 US-based repair shops of different sizes, regions and service capabilities, excluding tire shops and auto glass repair shops.
Respondents had an average of about 4.4 auto parts distributors nearby, close to the roughly 4.0 in the 2012 survey; about 20% had at least 6 nearby. Bernstein believes the delivery capabilities needed to serve repair shops and a stable base of vehicles in use have kept the supplier landscape relatively stable over time.
Supplier ranking directly affects revenue: the preferred supplier receives an average of about 65% of a shop's auto parts purchases, while the second choice accounts for about 20%, or approximately 85% combined. This concentration is broadly unchanged from 2012.

Among shops that answered the preferred-supplier question, 37% chose O'Reilly, while AutoZone and NAPA received 22% and 15%, respectively. AutoZone has about 10% more US stores than NAPA, but the share of NAPA's sales to professional customers such as repair shops is about three times that of AutoZone.
Looking only at markets served by O'Reilly locations, its preferred-supplier rate was 42%, up from 15% in the 2012 survey; its second-choice rate was 30%, compared with 26% in 2012. The two surveys used different samples.
Customer relationships can also change: nearly six in ten respondents who provided the length of their relationship had worked with their preferred supplier for more than 15 years, but the survey found that newer relationships received a higher share of purchases, especially at AutoZone and O'Reilly.

A preferred supplier must have parts available and deliver quickly, as well as provide customer service and build relationships; price can also matter. O'Reilly's surveyed customers particularly value relationships and parts availability, while AutoZone customers place more emphasis on delivery speed and parts availability.
The second choice is more of a replenishment channel: shops primarily consider parts availability, followed by delivery time and price, while relationships become much less important.
The reasons suppliers are excluded from the preferred list also differ: AutoZone and O'Reilly are often left out because of insufficient coverage or relationships, while price and delivery capabilities more often affect Advance Auto Parts and NAPA. Some shops use aggregated purchasing platforms and also find it harder to distinguish clearly between their first and second choices.

Electric vehicle penetration could shrink the market addressable by auto parts retailers, but the survey shows that many small independent shops currently do almost no electric vehicle repair work. Electric vehicles accounted for a weighted average of 1.8% of respondents' repair business.
Most respondents believe repairs are becoming more complex. Bernstein believes greater parts complexity will raise repair and maintenance costs beyond the increase attributable to underlying inflation, creating a structural tailwind sufficient to offset the risk from electric vehicles.
Bernstein raised its assumption for growth in average transaction value within O'Reilly's same-store sales by 0.5 percentage points and increased its earnings-per-share forecasts for fiscal 2026 and 2027 by 0.01 dollars each, to 3.27 dollars and 3.61 dollars, respectively. It maintained its 94-dollar price target and market-perform rating. The firm rates AutoZone outperform.