Pet & Pet Supplies Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,000 pet retailers in the US sell products and services related to pets, including pet foods, pet supplies, pet services, and live pets. The top four companies, including large retailers like PetSmart and Petco, account for 66% of industry sales. The industry also includes pet retailing franchises, such as PetLand.

Strong Sales Drive Heavy Competition

Strong industry sales have resulted in competition for pet products from a variety of alternative channels, including warehouse clubs, grocery stores, mass merchandisers, veterinarians, and E-commerce and catalog retailers.

Proliferation Of New Products

Similar to the human food market, the pet food sector is driven by product innovation, with manufacturers constantly developing and introducing new items.

Industry size & Structure

A typical pet store operates out of a single location, employs 23 workers, and generates about $3-4 million annually.

    • The pet and pet supply retailing industry consists of about 5,000 companies that employ 117,200 workers and generate about $18 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom. The top four companies, including large retailers like PetSmart and Petco, account for 66% of sales.
    • The industry also includes pet retailing franchises, such as PetLand.
                            Industry Forecast
                            Pet & Pet Supplies Stores Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Nov 12, 2022 - Forever Chemicals Found In Pet Food Packaging
                            • The toxic “forever chemicals” known as PFAS have been found in some popular pet food packaging. Research has established the potential for PFAS in packaging to contaminate the food within. PFAS are found in the blood of almost every American, and tests have revealed their presence in pets, risking their health as well. Many animals mature and age seven or more times faster than humans, which may cause them to develop health problems from exposure much more rapidly, according to research firm EWG.
                            • State lawmakers are introducing proposals to outlaw high-interest loans and leasing arrangements by brick-and-mortar and online pet stores, according to the Washington Post. Experts say that deals can double or triple the cost of an animal and can cripple the credit of those who default. Illinois banned the high-interest loans this year and a new California law generally prohibits online pet stores — regardless of location — from being involved in financing the sale of dogs, cats, or rabbits. Another 10 states have banned retail pet stores from offering leasing plans that are similar in cost and structure to car leases, meaning a failure to pay could result in a pet being seized. “They are preying on people who are making an emotional decision,” said California state Representative Brian Maienschein “These are not reasonable loans, the terms are predatory, in some cases doubling the cost of the pet. That’s absurd.”
                            • There is some evidence that human-grade products may offer health benefits for the animals that consume them, according to researchers at the University of Illinois (UI). Human-grade pet foods are more easily digested and produce a lower stool volume in dogs, according to Kelly Swanson, a professor of animal and nutritional sciences at UI. These benefits vary depending on the overall content of the pet’s diet, and there are potential drawbacks — especially the increased cost, and potential competition with resources needed to feed humans. The tradeoffs can make sense for pet food manufacturers.
                            • Consumers are seeking out CBD oils, tinctures, and biscuits to ease pet anxiety and pain. “Whenever there’s a thunderstorm approaching or a day where my neighbors might set off fireworks, I always make sure to give Chloe a special treat about 20 minutes ahead of time,” said Maggie Atwood, who owns a Chihuahua mix. A 2020 study out of Colorado State University showed that dogs with osteoarthritis benefit from the use CBD-rich hemp oil. Consumers spent $26 million on CBD pet products in 2020 and sales are expected to have reached $629 million by the end of 2021, according to a report from Brightfield Group. CBD is not FDA-approved for animals, so veterinarians are not legally permitted to prescribe the use of products containing CBD, or cannabidiol, a compound found in cannabis and hemp.
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