How Are Pet Stores Doing During the Coronavirus Lockdown?
It has been a few weeks since pet stores across the country saw a spike in business (in some cases, up as much as 30%) as consumers loaded up on supplies in preparation for self-isolation in mid to late March—a trend that one could have reasonably expected to result in a corresponding downturn right about now. Yet, such a downturn is not being reported by many of the retailers Pet Business has spoken with over the past week. In fact, most retailers are saying that their business has returned to near-normal levels, with some reporting single-digit declines versus the same period last year.
Of course, not every retailer has had the same experience over the past several weeks, with variables such as how quickly stay-at-home orders were issued in different parts of the country playing a major role in the impact that panic buying has had on the consistency of any given pet store's business. Still, there are some generalities that seem to be playing out across the channel...
Unsurprisingly, pet stores that already offered delivery and/or in-store pickup services were uniquely prepared to adapt to the selling environment in which we now find ourselves. In most cases, these services were relatively easy to scale up to acccomodate an increase in demand. Luckily, even many retailers that did not previously offer delivery or in-store pickup were able to quickly get up to speed fairly quickly, which has been essential to the survival of their businesses. As a result, the majority of pet stores are either limiting the number of customers allowed in their stores at one time, or not allowing them in at all. I've even spoken with one retailer who outfitted their store with a drive-through.
Hard Goods Hit Hardest
While pet food sales continue to be strong, many stores are having a much tougher time selling non-consumable products such as beds, collars and toys. Even treat sales have dropped off, to some extent. This makes a lot of sense, given that there is far less urgency among pet owners to purchase these items under the present circumstances, and the aforementioned lack of in-store shopping has made impulse purchases all but obsolete for the time being. This is particularly problematic when you consider that these categories are typically offer pet stores the best margins, which are depended on to make up for the relatively low margins that come from food sales. With this in mind, many retailers are thinking outside the box—in some cases, literally—by displaying impulse-type items outside for curbside pick-up customers, or actively suggesting products such as treats to home-delivery customers.
The Supply Chain is Strong
So far, the supply chain of brick-and-mortar pet stores seems to be avoiding the major disruptions that have been experienced in other retail channels. Most of the retailers we spoke with reported fill rates that are consistent with—or even better than—what they experienced before the lockdown. That's because the industry's distributors and manufacturers have really stepped up to support their retail partners during this unprecedented time, in many cases adjusting delivery schedules and order requirements as needed. Of course, there have been variations in what retailers have experienced, depending on how much inventory they can carry and the specific category in question. For example, there were some reports of disruptions related to fresh and frozen raw foods, but those were mostly logistical, rather than supply issues. Overall, however, a strong supply chain has been instrumental in helping pet stores navigate through this crisis.