Pet Industry 2013 Strategic Outlook

See U.S. market sizes of pet food, veterinary services, supplies and pet services, sliced by demographic group. Includes pet owner spending demographics, core trends and analysis on fragmentation, the retail landscape, changes in the food and vet industries, and opportunities moving forward.

This report provides key spending trends by age, income and household composition that are driving the pet industry. It contains actionable intelligence to help your business, marketing or product development initiatives. Learn more or buy securely here



For instance, the above table shows both overall ($2.4 billion) and segment market sizes for pet owners who have a child younger than six years old. These new families used to be part of a core demographic group with children in the 'pet acquisition years' that can engender loyalty to a brand. These customers continue to increase spending, particularly on food and at the vet.

 

PetSmart Q3 2012

PetSmart, Inc. (NASDAQ:PETM) last week reported strong 3rd quarter results for 2012, booking $82 million in net income on $1.6 billion in sales, up 9%. Comparable store sales grew 6.5%. Services sales grew 8% to $175 million.

The company credits its hard goods resets over the past two years for continued differentiation in a competitive industry, supplying a mix of exclusive brands - including GNC, KONG and Martha Stewart - and private labels like Top Paw that align with consumer demand. Hard goods made up for 33.1% of sales.

In consumables, which accounted for 53.9% of sales, super-premium continues to be the largest and fastest growing category.

Services accounted for 10.7% of sales. Pet services like grooming, boarding and veterinary care are an "integral part" of PetSmart's strategy to further differentiate it from the competition, drive traffic and repeat visits to the stores, and provide cross-selling opportunities.

PetSmart adapts well to fast-changing consumer trends and loyalties, which can't be easy with 1,269 stores. Illustrating the humanization trend, the company has increased television advertising spending for the holiday season, jumping on the Black Friday shopping spree with specific ads, and soon to launch a 12 Days of Christmas ad campaign.

Feeling good in the U.S., the company is "dipping a toe in the water" in Asia with a "low-risk learning exercise" in South Korea with Emart.

Source: PetSmart Investor Relations

Pet Business Opportunities

Emerging Market Segments in the Pet Industry

Kudos to BusinessWeek for staying ahead of the curve by reporting on one of the emerging market segments in the pet industry (There's Never Been A Better Time to Be a Dead Pet by Eric Spitznagel, Sep 07 2012). Sometimes it's hard for businesses to get behind an idea that's hard to quantify; the article points out that it is "a growing if untracked segment of the pet care industry."

In fact, the pet death segment is on our list of best pet business opportunities for the second year straight. The aging of America, and of our pets, and increased spending, are only three of the reasons.

Cultural changes and pet owner expenditures that span multiple demographic groups have proactively created opportunities for new business ideas, and perhaps more importantly for existing businesses to tap into a multi-billion spending spree.

Check out our market research for more opportunities moving forward. Buy any report now and we'll include a confidential half-hour phone consultation.
 

Hurtta dog wear finally available in the U.S.

Popular outdoor dog apparel from the Finnish company Hurtta is now available in the U.S.

Pennsylvania-based Abel Pet Supply has a selection of these popular and functional raincoats, jackets and fleece available online, and just in time for winter.
 

PetSmart Q3 2011

PetSmart, Inc. (NASDAQ:PETM) reported strong quarterly earnings yesterday, highlighting increasing store traffic, organic and natural dog food sales, and services revenue.

Total sales in the third quarter increased 8% to $1.5 billion, of which services accounted for $161 million, up 9%. Comparable same-store sales grew 6.1%, based in part on a 2.2% increase in traffic.

High-end dog food brands like Innova, Wellness and Blue Buffalo were key differentiators, bringing in customers and driving sales.

(This is in contrast to Wal-Mart's recent strength in value brand sales. Why? Because about half the dog food market is bought by households making less than $70,000 in annual income, and that half is also growing year-over-year. In fact, strong increases in pet food spending were recently made by households making only $15,000 - $39,000 per year. So it seems there's plenty of room for both value and premium brands to thrive. Check out our pet market research to learn more.)

"Sustained momentum" on exclusive partnerships with Martha Stewart and GNC helped "moved the bar" on proprietary brands from 18 to 22%. In 2012 the company will launch exclusive Toys R' Us pet toys.

The first national television ad campaign for services in a decade was cited as responsible for increases in customer growth, retention and satsifaction for the grooming business.

Pets and Wal-Mart's Growth Strategy

It seems as though Wal-Mart Stores, Inc (NYSE:WMT) will continue to leverage the pet industry in its own expansion plans. Besides selling Ol' Roy dog food for years, the company has particularly benefitted since a 2005 expansion of pet products online, and a 2006 launch of its own private label organic dog food.

According to Q3 2012 results, the pet supply business was "strong," showing high single-digit comps, in stark contrast to categories like home care and baby care, which had negative comparable store sales. The company states that "assortment initiatives" in the consumables pet category are making a large impact. The dog food category improved 300 basis points in part due to their value brands.

So its no surprise the company is folding pet supplies into its Neighborhood Markets concept now being rolled out across the country. These smaller stores resemble grocery stores, carrying produce, meat and dairy, dry goods, pharmaceuticals, health and beauty products, and pet supplies.