Holiday Cheer or Hangover?
Will pet specialty retailers still be cheerful when the calendar flips to 2015, or will they be suffering from a holiday hangover?
The way that the last few weeks of 2014 play out will undoubtedly be an important factor in determining whether or not pet stores have a happy and healthy new year. Unfortunately, when it comes to predicting what the holidays will bring, the picture is far from certain; and an observer’s point of view will ultimately depend on whose metrics they are looking at.
On the positive side, the National Retail Federation (NRF) expects consumers’ holiday spending to increase by more than four percent for the first time since 2011, significantly outpacing the average 2.9-percent growth that the retail industry has experienced over the past decade. NRF’s prediction is based, in part, on a relatively strong Conference Board Consumer Confidence Index, which stood at 94.5 at the end of October. To put this in context, the index stood at just 72.4 during the same period in 2013, a year in which holiday sales increased by 3.8 percent.
More specific to the pet industry, according to the American Express Spending & Saving Tracker consumer survey, American shoppers are expected to spend an average of $100 this holiday season on gifts for each pet that they own. The survey reports that among the most popular gifts are treats (66 percent); toys (59 percent); holiday stockings (34 percent); accessories, including leashes and collars (27 percent); and apparel (18 percent).
Of course, success is far from guaranteed for pet specialty stores. In fact, the pet-spending figures put out by the American Express Spending & Saving Tracker are significantly more conservative than they were in 2013, when U.S. consumers were expected to spend $178 per pet. Consider this alongside the fact that Shop.org (NRF’s digital retail division) expects online sales to take a bigger piece of the holiday pie, increasing by a healthy eight to 11 percent during the fourth quarter of 2014. It looks like brick-and-mortar pet stores may be facing stiffer competition for a smaller prize.
Regardless of which forecast retailers choose to focus on as the holiday season shifts into high gear, the success of a pet store is ultimately in the hands of the operator. Those armed with a well-devised marketing and merchandising plan that includes stocking the right products at the right prices to attract a wide range of yuletide shoppers are sure to end up at the top of the holiday heap. And for those retailers that can successfully convert fourth-quarter sales into steady repeat customer traffic, the cheer should extend throughout the coming year.