Report: Mass Merchandisers Are Outperforming Specialty Pet Stores
Michael Gaida from Pixabay
After years of pet specialty superstores outperforming supermarkets and discount stores, mass channels are now taking the lead in pet product sales, according to a new study by market research firm Packaged Facts.
U.S. retail sales of pet products hit about $55 billion in 2019, up 5 percent compared to 2018, according to U.S. Pet Market Focus: Mass Market Channel Shoppers. Unsurprisingly, according to officials, the internet and pet specialty stores helped with this growth. Online purchases accounted for more than 20 percent of all pet product sales.
Chain pet specialty stores were not far behind, but continue to be dominated by pet superstore operators PetSmart and Petco, officials said. However, other chain pet stores, such as Pet Supplies Plus, Pet Valu, Pet Supermarket and Petsense, are increasingly a force, officials added.
Still, when looking at mass market stores, they come out on top, according to the study. The mass market channel includes mass merchandisers and super centers such as Walmart and Target; food stores such as chain supermarkets and natural food supermarkets; and wholesale club stores including Costco and Sam’s Club.
“Today’s pet industry is benefitting from a variety of factors and trends, but most notably this is a market ripe with intriguing paradox and much of that paradox stems from the performance of mass market stores,” said David Sprinkle, research director for Packaged Facts in Rockville, Md.
Two key developments, both intertwined with e-commerce, help explain the switch, officials said. First, mass retailers now feature premium pet foods, including mass-market brands like Rachel Ray Nutrish and Mars’ Crave.
“The shift of pet food purchasing and sales growth to the internet, which is no respecter of the mass-market versus specialty divide, undercut the motivation of formerly specialty channel-only brands to maintain the exclusive pet specialty retailer relationships and brand-positioning cachet of being available only in pet specialty stores,” officials said in a press release.
“Secondly, while e-commerce has clearly grown the overall market and not merely cannibalized sales, there has nonetheless been an element of robbing pet stores to pay Paul,” officials added.
At the brick-and-mortar level, pet superstores have taken the most direct hit from e-commerce, based on the number and percentage of their customer base that also buy pet products online, according to the report.
The share of overall dog- or cat-owning households who shop for pet products both at PetSmart/Petco and online rose from 3.6 percent in 2015 to 13.5 percent as of 2019, thereby growing to account for a third (33 percent) of PetSmart/Petco customers, according to the report.
“The ramifications are evident in channel shares trends, with chain pet specialty stores posting robust growth in 2017 and 2018, but dipping in share in 2019,” officials said.