Indulgent pet parents will drive up demand for premium pet food and services like grooming
Los Angeles, CA (PRWEB) February 28, 2012
The Pet Stores industry is ahead of the pack when it comes to sales. Even during the Great Recession, which slowed most of the retail sector, the industry continued to yield positive revenue growth. “This trend was mainly driven by an increasing number of ‘pet parents,’ pet owners who treat their four-legged friends as family members,” said Caitlin Moldvay, an IBISWorld industry analyst. During the economic downturn when consumers of all income levels tightened their belts, pet parents cut back on their personal discretionary spending first before scaling down on their spending for their pets. Consequently, revenue growth slowed during the recession but maintained its overall positive trend. Revenue is expected to increase at an average annual rate of 2.8% to $14.7 billion in the five years to 2012.
The emerging trend of pet parents has also brought about high demand for premium pet products and services, Moldvay noted. Since pets are often considered family members, pet owners frequently indulge them with all-natural and organic pet foods and treats, in addition to services such as grooming and day care. Over the five years to 2017, revenue in the Pet Stores industry is projected to maintain strong growth. As the economic recovery gains traction and consumers are equipped with heavier wallets, revenue from premium products and services is projected to increase.
More than half of the Pet Stores industry's revenue comes from two specialty supply retailers: PetSmart Inc. and PETCO Animal Supplies Inc. The other portion of the industry consists of family-owned stores, small franchises and small chains of pet stores. The industry has a high level of concentration with the top four companies generating most of its revenue. Although there is a high level of concentration, small operators are still able to find niche markets in their geographical locations and rarely expand beyond those areas. In the five years to 2017, major players PetSmart and PETCO are expected to grow their share of the industry, with a steady stream of customers patronizing their stores. This is because these big-box retailers are able to offer customers a "best of both worlds" scenario, where they provide broad and industry-specific product selections, while operating on a scale such that they can purchase in bulk and pass on savings to the consumers. Consequently, these stores are expected to grow at the expense of small stores in the industry. For more information, visit IBISWorld’s Pet Stores report in the US industry page.
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IBISWorld industry Report Key Topics
Pet stores sell a variety of pets, including dogs, cats, fish and birds. Stores also sell pet foods and pet supplies, such as collars, leashes, health and beauty aids, shampoos, medication, toys, pet containers, dog kennels and cat furniture. Some stores offer pet services, such as grooming and training.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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