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

                            Mar 1, 2023 - Pet Store Traffic Strong in January 2023
                            • Traffic to the pet stores and services category increased by 11% in January 2023 compared to January 2020, according to data released by foot traffic analytics firm examining industries holding onto pandemic gains. The pet industry has benefited from the pandemic surge in pet adoption, and the overall increase in pet ownership should help the category maintain its pandemic visit gains in 2023. The data found a dip in traffic in the second half of 2022, but traffic overall was ahead of pre-pandemic levels. Overall growth in the category may slow in 2023 as inflation may cause some pet owners to cut back on non-essentials.
                            • Inflation is causing pet owners to cut back on pet spending, including pet services and treats, according to a report in the Wall Street Journal. In February, a survey of 1,000 pet owners by consumer-insights firm Zappi for the Wall Street Journal found that half actively took steps to reduce pet-care costs in the past year. About a quarter skipped or delayed a pet’s veterinary visit or routine medicine to save money. Nearly half of pet owners opted for at-home grooming instead of paying a professional. About 10% said they had to give a pet away due to rising costs. Per the article, Yelp reported that interest in businesses in the pet boarding, grooming, walking, and services spaces fell more than 20% between peak in June 2021 and June 2022, bringing it more in line with pre-pandemic spending.
                            • The pet sector contributed $260.5 billion directly and indirectly to the US economy in 2021, compared to $221 billion in 2015, according to data from a new study titled “The Economics of the US Pet Food and Pet Supply Industry,” reported in Pet Product News. The study, shared at the Pet Industry Leadership Summit, found that the pet sector accounted for a net contribution to the annual gross domestic product of $174.6 billion in 2021. According to the study, pet food and treats accounted for $50 billion of the $93.9 billion spent directly on pets in 2021. The pet sector supports some 2.7 million jobs in the US, with more than a million working directly in pet-related businesses and 1.6 million jobs linked indirectly to consumer pet expenditures.
                            • Kibble is the most cost effective option for treating dogs with chronic gastrointestinal issues, compared to homemade and canned food options, according to a new study published in the Journal of the American Veterinary Medical Association (JAVMA). The study showed that the median cost of dry commercially produced diets for the nutritional management of dogs with chronic enteropathies was $0.29 per 100 calories, compared to $0.55 for home-cooked diets formulated by veterinary nutritionists and $1.01 for canned diets. While pet owners may believe that homemade meals are less expensive to prepare, studies have shown that most home-cooked diets do not provide complete and balanced nutrition, which can result in vitamin and mineral deficiencies. "If done wrong, home-cooked diets could be lacking in necessary nutrients, which could contribute to illness and severe health implications down the road," according to Dr. Valerie J. Parker, clinical professor at The Ohio State University College of Veterinary Medicine, a board-certified veterinary nutritionist and corresponding author of the study.
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