Pricing Parity Revisited
Wow, the topic of online pet food pricing certainly strikes a nerve with pet specialty retailers.
It should not come as much of a surprise. When Pet Business decided to tackle what many brick-and-mortar retailers describe as the predatory pricing practices of some Internet-based pet food outlets in our March cover story, we did so at the request of a number of our readers in the independent channel.
It is, they said, the biggest challenge facing their businesses today.
Still, I was rather taken aback by the volume of feedback that we received on the topic. Thankfully, many of the responses were quite positive and indicated that we had hit the nail on the head in our description of the dynamics at play in the heated competition between traditional and digital pet stores. Of course, most of these came from retail professionals in the brick-and-mortar world.
Interestingly, though, some of the feedback that we received may seem somewhat counterintuitive. For example, one online retailer—Sarah F. Melcher, owner of Cat Supplies and More based in Torrington, Conn.—wrote in to say “thank you so much” for the story. According to Melcher, many small, independent online-only stores like hers have been “cut off at the knees” because they choose to honor MSRPs.
On the other hand, not every brick-and-mortar retailer who wrote in agreed that manufacturers should play an active role in setting pricing standards. Frank Frattini, CEO of The Hungry Puppy, a single-store operation in central New Jersey, said that the story left him with the feeling that independent pet retailers have “a false sense of entitlement to make a profit they think is fair for doing little more than opening their door in the morning.”
“Manufacturers who pander to these weak retailers are doing a disservice to their companies, the industry and most important to their customers,” he said.
Both opinions illustrate that you never can tell on which side of an issue someone might fall. And that is one of the great things about this industry; it is full of passionate people who are not afraid to offer their two cents on any given subject, regardless of how expected or unexpected their opinion might be. What’s your opinion? We would love to hear it.
One final note about the feedback that we received about last month’s article on pricing parity: I would be remiss if I didn’t mention one aspect of the MAP and MRP issue that I failed to cover in the story. As Michael Levy, president of Pet Food Express, a 56-store chain in California, pointed out to me after reading the article, it is important that retailers understand that simply having an MAP or MRP policy is no assurance that a manufacturer is doing enough to keep the playing field level for brick-and-mortar retailers in their competition with online pet food outlets. After all, if a company’s MAP or MRP is so low that it would be impossible for traditional retailers to make a reasonable margin, what’s the point?