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 fewer than 20 workers, and generates about $3-4 million annually.

    • The pet and pet supply retailing industry consists of about 5,000 companies that employ 133,100 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

                            Mar 26, 2024 - Higher Prices, Flat Employment
                            • Producer prices for dog and cat food steadily increased in 2023, reaching a high point in Q4, according to the Bureau of Labor Statistics (BLS). US consumer demand also grew modestly, with cash-strapped shoppers being more selective with their purchases. Employment levels for pet and pet supplies retailers were relatively flat in December 2023 compared to a year ago, while employment costs rose 4.7% during the same period due to an uptick in wages, per the BLS.
                            • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                            • Pet supplies retailers will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                            • More than half of pet owners are worried about their pets experiencing boredom, and 44% worry about their pets having separation anxiety when leaving their pets alone for extended periods, according to a recent PetMeds survey conducted by OnePoll in dvm360. The top concerns expressed by pet owners include loneliness or boredom (52%), separation anxiety (44%), access to food and water (36%), health issues or emergencies (33%), pet escaping or getting lost (31%), destructive behavior (25%), and other people’s handling of the pet (14%). About 40% of survey respondents say they would take a pay cut or a lower salary to work from home with their pets. More than 60% would like additional support and guidance in understanding their pet’s health and behaviors, while 70% would be interested in trying telehealth services. Pet stores may want to promote a wide range of products that help pets with boredom and separation anxiety.
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