From weathering the COVID-19 pandemic to economic recession challenges, 2020 was a defining year for Petco, and it’s only the beginning of the company’s continuing success, according to Ron Coughlin, chairman and CEO of the San Diego-based company.
“Petco has become a truly unique company, one that is saving and improving millions of pet lives and tangibly improving the lives of the partners who work at Petco, while at the same time executing our differentiated strategy with excellence,” Coughlin said in the company’s 2020 Annual Report. “This is what we call Purpose-Driven Performance. And our focus on Purpose-Driven Performance has now resulted in nine quarters of consecutive revenue growth.”
Petco, which recently rebranded itself as Petco The Health & Wellness Co., reported net sales of $4.92 billion for its fiscal year ended Jan. 30, an 11 percent increase from $4.43 billion in the year-ago period.
Net sales among all product types and services increased for the year. Supplies and companion animal sales increased 20.1 percent due to increases in pet ownership and shifts in disposable income toward pets, dog and cat food sales increased 3.4 percent, and services and other sales increased 6.1 percent, according to officials.
“With our investments in our business over the past two years, we were, and continue to be, well-positioned to meet the increasing and evolving needs of pets and their parents,” officials said in the report. “Our sales growth period-over-period was a result of these investments, coupled with an increase in pet ownership and a shift in consumer spending toward the pet category as a result of the COVID-19 pandemic.”
Petco’s e-commerce and digital sales increased 103 percent from fiscal 2019 to fiscal 2020, driven by a change in consumer shopping preferences, according to officials. With an integrated offering that includes buy online, pick up in-store (BOPUS), curbside pick-up, ship-from-store and same day delivery, Petco employees were able to quickly get products to customers in a safe manner regardless of their delivery or pick-up preference, officials said.
“These were game changers in the way that we engaged with and served pet parents and are strategic differentiators to drive growth going forward,” Coughlin added.
Coughlin also pointed to the “differentiated ecosystem” that the company has built over the past three years as a contributing factor in growth and attracting new customers.
“With over 20 million active customers—which grew by nearly 1 million customers in each of the third and fourth quarters of 2020—we believe our end-to-end ecosystem presents a unique value proposition with sticky customer relationships,” Coughlin said. “We have developed structural advantages for customer fulfillment, whereby our Pet Care Centers now double as micro-distribution centers, turning our national footprint of physical locations into a significant competitive asset.”
Other highlights from the report:
- Digital revenue more than doubled in 2020. Repeat delivery represented almost 45 percent of digital revenue.
- In 2020, about 83 percent of website orders were fulfilled from Petco’s Pet Care Centers.
- Owned brands drove double-digit growth in 2020 with almost 30 percent penetration. Together with exclusive merchandise they represented about half of Petco’s portfolio.
- Petco opened 20 additional vet hospitals in its fourth quarter, bringing its year-end total to 125 locations. Long term, officials are targeting up to 900 vet care hospitals in its Pet Care Centers.
- Over its 20-plus-year history, Petco Love, formerly Petco Foundation, has invested more than $300 million in animal welfare organizations across the country.
- About 3.6 million pounds of cardboard packaging was saved in 2020 from Petco’s omnichannel fulfillment versus online only.
- Petco has committed to increase its assortment of sustainable products to 50 percent by the end of 2025.
- Petco established a Petco Partner Assistance Fund with $3 million in seed funding that has already provided support to more than 1,300 partners and their families who have experienced pandemic-related and other hardships.
“We are confident that the continued execution of our strategy will sustain momentum across our business throughout 2021 and enable us to continue to create value for all of our stakeholders for a long time to come,” Coughlin said.
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