Wal-Mart opens online pet store

Wal-Mart launched a new online pet store today. Who didn't see this coming?

With products for dogs, cats, fish and small animals, Wal-Mart not only appeals to the convenient one-stop shopper, but according to the press release, "offers even more opportunities for customers to pamper their pets."

Source: walmart.com

Rayovac adds global pet products

Rayovac, soon to be called Spectrum Brands, is at it again, recently announcing a $600 million acquisition of pet food and supplies company Tetra Holding GmbH.

Tetra is active in 90 countries, especially Germany, the U.S., Japan, and the U.K. where it sells fish and reptile products.

Source: "Rayovac Expands Into Pet Business," Reuters, Mar 15, 2005

A new pet business idea

From Animal Planet tv, this looks fun: Dragons are Coming on March 20, at least on my cable network.

I want one.

However, I am seeking funding and partners to pursue pet business ideas that are more down to earth. Interested parties please email mikedillon@gmail.com.

PETCO conference call

How strong is the pet industry? It's so strong, that when a PETCO store explodes, executives not only mention it in a year end conference call but manage to turn it into an example of the success of the company.

In its 4Q and Full Year 2004 conference call on March 10, PETCO Animal Supplies, Inc. said services represent the fastest growing segment of its business, growing at a rate of 21% in the fourth quarter. This is similar to PETsMARTs recent comments about the growth of the pet services segment.

But the language and points of emphasis by PETCO differed significantly from PETsMART. Words like "community involvement," "social responsibility," and sentences about the health and emotional development of children, families and companion animals represent the value the company places on understanding the mind of the customer.

PETCOs overall business focuses products and services on the trend of pets being one of the family, illustrating a "powerful evolution of the pet industry," according to Brian Devine, Chairman of the Board.

The dual demographic of young professionals and baby boomers was directly addressed in the conference call, as was the continued expansion of the pet pampering trend. Data on the industry, customers, stores and vendors seem to be well collected and parsed by the company.

In 2005, PETCO's services offerings will continue to grow. Grooming is already available in almost 90% of stores, the dog day camp will expand from 3 current test locations to 10 in 2005, and "education" services (training) will continue to grow, with the company hiring a huge number of trainers and groomers each year.

Educating the employees is also a high priority at PETCO. Combining companion animal training with a shifting management development strategy (one that de-emphasizes traditional skills to focus on the big picture: how the animals, the customers, the employees and the business vision interact) illustrates the importance the company places on defining the corporate culture.

This tight focus on synergizing the customer's psychology with the business seemed to pay off in 2004, with the company reporting net sales up 12.5% in 2004 to $1.8 billion, and comparable year store sales up 6.2% from 2003.

In 2003 the company opened 3 new stores. In 2004, 17 stores were opened, and in 2005 the company plans to open 90 stores, evenly spread over the first three quarters. This is a very different pace from PETsMART, which said it will open the majority of its new stores in the fourth quarter of 2005. Next year's conference calls may show some interesting data resulting from this mismatch, as all new stores would follow the new Pisces design model.

Make that 91 stores this year, including a replacement for the store in Eatontown, New Jersey that blew up due to a gas leak last Friday, March 04. According to the company, the concerted effort to rescue the animals spoke highly of the community and employees.

Not mentioned in the call, but perhaps even more emblematic of some of its points, is the PETCO employee trapped in the rubble of the collapsed building, talking to 911 on her cell phone and wondering who will take care of her dog if she dies.

We wish her and everyone else affected a speedy recovery. And we know her dog will help.

Source: www.petco.com

PETsMART conference call

Listening to the 4th Quarter and Full Year 2004 conference call of PETsMART, Inc. on March 2, it seemed at first blush that nothing new was reported; key initiatives discussed for 2005 had all been previously announced or rolled out in 2004, management was predictably upbeat, and the analysts' questions focused primarily on how to make the numbers add up (or not) to their expectations.

What I took away, however, was a sense of complete confidence in the next two years of growth for the industry and the company, as well as hints at a longer term strategy targeting the leading edge of the baby boomer retirement in 2008.

2005 and 2006 are all about services, primarily boarding, but also grooming, training, and salon-type treatments. Phil Francis, chairman and chief executive officer, sees services growing at a rate of 20% for the next two years. Key initiatives in 2005 are to grow the services segment, starting with PETsHOTEL. With sixteen hotels already open, the company plans to open 12 more in 2005 and an additional 20 in 2006 (a 67% increase over 2005).

Doggie Daycamp, a standalone day camp within a store, will expand from its single test location to 4-5 new daycamps this year.

In 2005, the company plans to open 100 new stores, 35 in the Northeast and California, the nations two largest markets, in which PETsMART is "significantly understored," according to Bob Moran, president and chief operating officer. Almost half of new stores will open in the 3rd Quarter of 2005.

So confident are they in the success of the new stores that refreshing old stores has been delayed to 2006, which is also when they expect the "fruition" of the data mining program, started last year, that uses customer loyalty cards and pricing optimization software.

So 2007 will see a convergence of geographic positioning, new store remodels, high earnings, pricing controls and most importantly maturation of data collection, coupled with a strong understanding of today's emerging demographic and tomorrow's. Services like grooming, boarding and training are making money today due in part to current lifestyle trends, but are also a perfect match for an aging population that will begin to retire in 2008, providing a nice strategic position for the company.

PETsMART reported $3.36 billion in net sales in 2004, up 12.4% from $2.99 billion in 2003. Not bad for being significantly understored in the nations largest markets.

Source: www.petsmart.com