Rising pet ownership and higher disposable income levels are driving industry growth
Los Angeles, CA (PRWEB) June 10, 2013
Despite some headwinds along the way, the Pet Stores industry has performed fairly well over the five years to 2013. Industry growth has been fuelled by high pet ownership rates, with an increasing number of "pet parents" (i.e. those who treat their four-legged companions as family members) bolstering demand. Nevertheless, says IBISWorld industry analyst Anna Son, “the recession took a toll on a number of industry operators as cash-strapped consumers turned to cheaper pet products supplied by supermarkets and mass merchandisers.” As a result, industry revenue contracted 2.1% in 2009. Revenue growth has picked up since then, though, driven by higher household income levels and rising consumer confidence that encouraged consumers to loosen up their purse strings and spend on pet products. During the past five years, IBISWorld estimates that industry revenue will grow at an average annual rate of 1.7% to $1.7 billion, including a projected 2.3% jump in 2013.
Pet stores, which are traditionally small and independently owned operations, are facing mounting competition from grocery retailers, supermarkets and mass merchandisers. In addition to luring consumers with competitive prices, these retailers offer the convenience of one-stop shopping. As a result, time-poor consumers have turned to this type of store to streamline and simplify errands. In response to heightened competition, pet stores are placing greater emphasis on providing specialty services, such as one-to-one consultation with pet nutritionists and veterinarians. “In addition, pet stores are actively engaged in community initiatives and partnerships with animal shelters, charities and adoption services,” Son says. “Such involvement helps raise consumer awareness and drives foot traffic to pet stores.”
The overall outlook for the Pet Stores industry is positive. Rising pet ownership, especially of smaller pets, will catalyze industry growth in the next five years. In addition, the rebounding economy and rising disposable income will likely boost total retail spending, allowing pet owners to pamper their pets and splurge on pet products. Healthcare products and dietary supplements will further underpin industry growth as consumers search for ways to avoid expensive medical treatments. With rising sales volume, especially for premium products that typically have higher markups, industry profitability is expected to improve.
In the next five years, Son says major players, such as PetSmart and Pet Valu, will likely grow their share of the industry, with a steady stream of customers patronizing their stores. This growth is possible because these big-box retailers provide broad and industry-specific product selections, while operating on a scale that allows them to 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 in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry sells 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 also 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.