45 March 2018 Pet Product News International
BY DAVID LUMMIS
Eons ago, in the late 1990s, PetSmart and Petco be- gan exploring pet care services including groom- ing, boarding and training. The rest is history.
For 2017, sales of services through the top two pet
specialty big boxes rose to an estimated $1.3 billion, a
figure that represents around 10 percent of their total
(product and service) sales and 15 percent of all U.S.
sales of nonmedical pet care services. Since the 1990s
and 2000s, annual sales of PetSmart- and Petco-prof-fered pet care services have moderated from dou-ble-digit gains in the 20 to 30 percent range to around
5 percent, implying saturation. But with a large majority of pet owners still obtaining their services through
local and regional pet care providers, there appears to
be plenty of room for additional growth.
Both chains are betting there is, with exhibit No.
1 being Petco’s foray into “complete veterinary services.” Working with Vetco, Petco has long provided
in-store vaccinations, but now, via a joint venture with
Thrive Affordable Petcare, the retailer is rolling out a
full suite of in-store veterinary services, a key draw
being $10 exams for dogs and cats. The first Thrive
animal hospital debuted inside a new Petco store in
Aldine, Texas, in October 2017, with a dozen additional locations opening over the next few months in
remodeled stores in Texas, California and Colorado.
Presaging the initiative, in April 2017, Petco acquired
PetCoach, a digital services company that connects pet
owners with veterinary professionals for personalized
expert advice. Identifying more closely with services
from a branding perspective, Petco is renaming several of its smaller service-oriented Unleashed by Petco
stores as simply Petco.
With a huge head start in veterinary services—
most of Banfield’s 975 animal hospitals are located in
its stores—PetSmart is branching out into pet care ser-
vices another way. In October 2017, PetSmart opened
its first Groomery, with another five locations slated to
open in the coming months. At 1,800 to 2,500 square
feet, the salon-style shops are about half the size of
Petco’s Unleashed stores and focused exclusively on
Additional investment in pet care services comes
from another big-box retailer; in acquiring Petsense
in 2016, Tractor Supply Co. welcomed the opportunity for pet market diversification.
Retailers are not the only pet industry players
looking to bulk up on the services side. In September
2017, Mars snapped up approximately 800 animal
hospitals in 43 U.S. states and five Canadian provinces with its $9.1 billion acquisition of VCA. Factoring in its 81 percent ownership of Banfield (PetSmart
owns the rest) brings Mars’ animal hospital total
close to 2,000.
No coincidences here. As e-commerce carves out
an ever-greater share of product sales, brick-and-mortar pays the price. In one especially telling sign
of the times, Walmart recently announced the closing
of 63 Sam’s Clubs, 12 of which are being converted to
e-commerce fulfillment centers. If there’s any area of
pet retail where the internet can’t directly compete,
it’s services, and with oodles of prime real estate,
PetSmart, Petco, Petsense and other pet specialty
chains can be expected to evolve ever further into service-oriented pet health destinations, with veterinary
at the leading edge and additional top-dog product
marketers joining forces.
David Lummis is the lead pet-mar-ket analyst for Packaged Facts, a
division of MarketResearch.com.
The data cited above is drawn
primarily from Packaged Facts’
latest pet market report, U.S.
Pet Market Outlook 2018-2019
Big-Box Pet Retail
Bets Big on Services
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