How Pet Specialty is Performing Against Other Retail Channels
Successfully navigate the blurred lines of today’s omnichannel pet market requires a broad view.
The speed of change within the pet food industry has been a wind force, with both manufacturers and retailers creating seismic waves and crossing once very defined lanes to accommodate the evolving needs and preferences of today’s pets and their owners. Over the past few quarters we have witnessed an immense expansion of shelf space for pet food within traditional grocery stores, welcoming new premium and natural food offerings that were previously only available at pet specialty. And brands that were previously dedicated to neighborhood pet shops are now gaining visibility and moving into larger pet specialty stores, too. What has emerged is a pet retail landscape who’s lines have been blurred across the spectrum, making pet food—especially healthier, premium pet food offerings—more accessible and convenient for consumers.
Across Nielsen’s omnichannel universe, Americans spent $33 billion on pet food and treats in 2018. This represents an increase of 9 percent, or $2.8 billion in sales, compared with a year ago. And while volume growth has been slow for the pet sector, pet consumables (food and treats) are still driving much-needed growth to the overall FMCG space, particularly in the online retail landscape.
NIELSEN’S VIEW INTO OMNICHANNEL PERFORMANCE: PET CONSUMABLES†
|Farm & Feed*||$3.5B|
|Pet Superstores and Neighborhood Pet Stores||$8.1B|
*estimated total based on projected data
GROWTH OF PET CONSUMABLES BY CHANNEL‡
|CHANNEL||$ % GROWTH|
|Total Pet Consumables*||+9%|
|Pet Superstores and Neighborhood Pet Stores||+0.6%|
*Growth figures are based upon total pet consumables excluding the farm & feed channel
E-commerce Emerges with Big Bark and Bite
For today’s busy pet-owning consumers, convenience continues to be key. And for many, e-commerce is quickly becoming the king of convenient shopping. While online pet food sales only account for $4.3 billion in sales, it has brought 45 percent growth to the industry, marking the top area of opportunity for all retailers in this space. In fact, more and more consumers are taking advantage of the convenience of online services, such as subscription-based delivery for pet treats and supplies.
That said, with the industry shifting, it is becoming more important to focus on the in-store experience. E-tail will likely win when it comes to convenience (autoship, ship to door-step) and price, but something that e-commerce will never be able to compete with is the in-store experience, or services such as grooming, daycare, etc.
Neighborhood pet shops are differentiated in their ability to offer personalized services and access to communities of interest to their shopper bases. These factors are appealing to consumers, and a closer look at past performance indicates that small regional chains and independent storefronts have driven the most growth among pet “specialist” retailers. With unmatched assortment available online, as well as the convenience of pet food availability in mainstream retail, pet superstores have struggled to compete.
As change continues to unfold, industry lines will remain blurred. A pet retail revolution is underway, led by today’s consumers, who continue to fluidly toggle between shopping in-store within a mainstream pet shop, a neighborhood retailer or online.
As pet product companies continue to hone their omnichannel strategy, it is imperative that they operate with a broad lens on today’s pet landscape, or else they run the risk of navigating blindly.
Maria Lange is a Pet Specialty Client Director at Nielsen, the purveyor of the industry’s most holistic view of pet retail across both specialty and non-specialty channels inclusive of pet specialty stores, grocery stores and mass merchandisers.
† Source: Nielsen retail measurement services, Pet food and treats, Total U.S., 12 months ended December 2018,T Mainstream retail measured via Nielsen’s All Outlets Combined (xAOC) universe, includes pet superstores, neighborhood pet retailers and estimates of the farm and feed channel, Nielsen e-commerce measures powered via Rakuten Intelligence. Note: For a subset of retailers, some duplication of click and collect volume exists in the total omnichannel FMCG market valuation. Although vet clinics, pet superstores and neighborhood pet stores are seeing reduced sales overall, mainstream and neighborhood pet retailers continue to find ways to resonate with pet owners and post modest growth alongside the rapid growth of online sales.
‡Source: Nielsen retail measurement services, pet food and treats, Total U.S., 12 months ended December 2018 vs. year-ago, Mainstream retail measured via Nielsen’s All Outlets Combined (xAOC) universe includes pet superstores and neighborhood pet retailers, Nielsen e-commerce measures powered via Rakuten Intelligence. Note: For a subset of retailers, some duplication of click and collect volume exists in the total omnichannel FMCG market valuation.