All in the Family
Over the past 30 years, Concord Pet Foods and Supplies—the 2011 Pet Business Retailer of the Year—has grown into a successful 21-store retail chain by combining the owner’s hands-on approach with empowered store managers.
In an age in which retailing has largely become dominated by big corporate chains, Concord Pet Foods and Supplies is proving that there is still a place in the pet care market for good ol’ family-run pet shops. The Mutschler family, led by patriarch Larry Sr. has spent the last three decades building Concord Pet up from a small side business run out of a “shed” to a 21-store chain that has successfully weathered the rise of the big-box pet chains, as well as increased competition from the mass and grocery channels. This was accomplished by balancing a decidedly hands-on approach with a philosophy that empowers store managers to make and execute important decisions.
With stores in four Mid-Atlantic states–Delaware, Pennsylvania, Maryland and (most recently) New Jersey–maintaining a hands-on approach is no easy feat. Concord Pet does not use a team of regional managers. Instead, owner Larry Mutschler Sr. visits approximately half of Concord’s 21 stores each day to interact with managers and often act as a courier between the stores and home office.
“I’ve tried [a regional management structure], “ says Mutschler. “For example, I tried taking a senior manager from among our five southernmost stores and put her in charge of all of those locations.”
Mutschler says that he tried four such regional management setups, but only two of the four ended up working well. As a result, he scrapped the idea all together.
“What happened was [the regional managers’] heads got so big, it started interfering with store operations,” says Mutschler.
While he concedes that he will likely have to revisit the regional manager concept eventually, Mutschler says that when that day comes, he will bear in mind the lessons he learned from his previous experience.
“I would probably bring someone in from the outside [to fill the role of regional manager],” he says, noting that it will also be important to make sure that any regional management setup will not take away from the unique local flavor that has been created in each of his individual locations–a direct result of the high level of autonomy that Concord Pet gives to its store managers, particularly in regards to buying decisions.
“Our stores are not all cookie cutter,” says Mutschler, noting that the flexibility that Concord gives its managers in crafting their stores’ selection is key to the chain’s success.
“We pretty much have full reign to bring in items that we think will sell in our stores, and that gives us a lot of control over our own success,” says Kristen Stone, manager of Concord Pet’s Graylyn (Wilmington, Del.) store. “For example, I choose to carry more of the raw, as well as organic and natural foods, because they do well in my store.”
In addition to ensuring that each location’s product mix is tailored for its unique customer base, giving managers this level of control goes a long way in motivating them to do their very best in making their stores successful.
“I treat it as if it were my store, with the same respect and effort put forth that I would if it were my own business,” says Stone.
Whatever the future may hold, right now, Concord Pet is doing quite well with its current management structure. Mutschler says that his hands-on approach (which he has passed on to his children, Lindsay and Larry, Jr.) has created a business environment in which every member of the staff feels like part of a big extended family.
“They’re not afraid to call us or email us,” he says. “My door never shuts, so if they have a problem, they’re welcome to walk right in. And if I have a problem, I address it right away. We don’t let things dwell very long.”
Mutschler goes even further in fostering a family-type atmosphere by inviting store managers to trade shows and vendor-sponsored events, as well as hosting Concord Pet’s own events, such as the company’s annual Christmas and Fourth of July parties.
“We really do get the family feeling,” says Stone. “There are different events that we all go to, like the Fourth of July party. At that party, every employee is welcome to bring their extended family if they want to.”
Largely because of this atmosphere, store managers spend an average of10 to 15 years working for Concord Pet. And when a management position does open up, it is typically filled from within the ranks. “I found that what works best is to have all of the store managers grooming people [for future management positions] all the time,” says Mutschler.
Facing Stiff Competition
Like every other independent pet specialty store today, Concord Pet Foods & Supplies faces unprecendented competition from other retailers. Grocery stores, mass merchandisers and especially the big-box pet chains are all trying to take a bite out of Concord’s bottom line–a fact that hasn’t been lost on Mutschler.
“We were the only game in town for a long time,” he says. “Now we have about a half-dozen Petcos and PetSmarts around us.
“And yeah, we’ve taken a hit. For example, [the Concord Pike location] probably took a 20 to 30 percent hit when a PetSmart opened up the road from it, but we’re close to being back up to the volume we were doing before.”
Concord has largely been able to rise to the occasion when squaring off against larger competitors; and unlike many other independents, Mutschler has even been willing to go head to head with the big guys on their own turf.
“We support the major [pet food] brands,” he says. “I’ve always been one of the rare creatures who doesn’t throw any product lines out [because they’re available through my competitors]. I’ve been in business for 30 years now, and if one of my customers has been using Iams for 30 years and they’re happy with it, I’m not going to try to change their minds.”
Of course, competing with grocery stores, mass merchandisers and big-box pet chains in the arena of major pet food brands can be a tall order when it comes to pricing. However, Mutschler says that this is an area in which the Concord Pet chain’s size has proven to be a big benefit. “Luckily, we have a huge buying power,” he says. “So we’re able to stay right with Petco, PetSmart and Wal-Mart most of the time [in terms of pricing], and still make money.”
Although Concord Pet has had success in selling major pet food brands, Mutschler points out that, aside from Purina products, his stores do not typically devote extensive space to these widely distributed products and balances their presence by spotlighting higher-end “house brands,” like Grandma Mae’s Country Naturals, Professional Pet Foods and VéRUS Pet Foods, which are unique to the pet specialty channel.
While Concord Pet has held its own against the rising tide of competition, there has been some long-term effects on the business. “We used to make 40 to 50 percent on a bag of dog food; now it’s down to 20 to 40 percent, depending on the brand.”
Ultimately, says Mutschler, Concord Pet’s ability to compete effectively is largely due to the chain’s loyal customer base. “Delaware is a pretty tight-knit, old-fashioned type state, where people still support locally owned and operated businesses,” he says. “They would rather come to Concord Pet because of the things we do for the community and to see a friendly, familiar face.”
Responding to New Realities
Over the past 30 years that he’s been in the business of retailing pet products, Mutschler has witnessed a lot of other changes beyond the growth in competition. “Even over the last five years, the pet business has really changed,” he says. “It used to be that our business was about 50 percent dog, 30 percent cat and 20 percent everything else. Now it’s almost 80 percent dog, maybe 15 percent cat and about five percent everything else.”
As a result, Concord Pet has had to evolve its stores in kind. For example, the stores’ aquatics sections, which once took up as much as 60 feet of space, have been cut down significantly. Mutschler reports a similar trend in the small animal arena.
The shift in Concord Pet’s focus was illustrated in the recent renovation of the company’s Graylyn store, says Stone. “We lessened the small animal, bird, fish and reptile sections down to just the basic necessities,” she explains. “We went from about six to eight feet down to about four feet of space to accommodate the best selling stuff, which is the dog and cat products. We were able to bring in more toys for dogs and cats, and it’s fun for our customers to see the new products.”
Of course, the current state of the economy has also had a significant impact on pet-related spending trends. “With the economy being the way it is, the customer is still spending the same money, but it’s almost all going to food,” says Mutschler. “It’s getting tougher to maintain our bottom line. It used to be they spent $30 for food, and $10 on goodies–and I could make $5 off of that $10. Now I’m making $5 off of $40. Customers haven’t really moved away from the premium foods, but they’re cutting back in other areas.”
A Community Focus
While Mutschler credits the loyal nature of his customer base for the continued success of the Concord Pet chain, the company has worked hard to earn that loyalty over the past three decades. One of the cornerstones of Mutschler’s approach to retailing has been to enmesh his stores in the very fabric of the local communities they serve.
Concord Pet offers customers access to a frequent-buyer program and two different sale events that feature steep discounts and a festival-type atmosphere–the Anniversary Sale and the Moonlight Madness Sale. The chain also regularly works with local animal shelters and rescue organizations to find loving homes for unwanted pets, whether it’s through coordinated adoption events or by housing adoptable cats right at the front of the stores.
Concord Pet raises it profile in the local community by sponsoring a racecar in the NASCAR “minor leagues” and working with the Wilmington Blue Rocks, a farm team for the Kansas City Royals, when they host their annual “Dog Days of Summer” event. The company also hosts an annual golf tournament, the proceeds from which go to local animal charities.
But Mutschler is not content with just these company-wide efforts. He also encourages his store managers to get involved in their individual communities. “We push hard to get our managers to participate in their areas,” say Mutschler. “For example, our Smyrna store participates in a local Fourth of July parade with a big trailer that they decorate and that has the Concord Pet name on it. Out in Hockessin, one of our managers does an afternoon happy hour, where customers can bring their dogs in for cookies and other treats.”
The Future of Concord Pet
When he looks in his crystal ball, Mutschler sees the chain continuing to grow at a steady, yet measured rate. “I feel that I’m probably going to keep opening one or two stores a year–nothing huge,” he says. “It has to be the right spot, the right deal, at this point.”
As for the stores already in operation, Concord Pet has begun an aggressive renovation program that will update all of the chains’ first nine locations with fresh paint, revised layouts and new fixtures. So far, six of the nine renovation projects have been completed.
In addition to the continued growth and refinement of Concord Pet’s brick-and-mortar operations, Mutschler is also considering moving into the online sales arena. “I’ve been thinking about warehousing, and if I got into a warehouse, I would probably get into online retailing,” he says. “I may even try to get started through a distributor, through drop-shipping.”
Whatever path Concord Pet takes in its growth, one thing is certain: When the time comes for Mutschler to ride off into the sunset, the business will continue to be a family affair. His children, Lindsay and Larry Jr. are committed to taking on their father’s mantle when he is ready lay it down for some well-deserved rest. And that is something that Concord Pet’s customers and employees can feel good about.
“Their style is very similar to Larry’s, so we can be confident that things are going to be the same when Larry eventually passes the company down,” says Stone. “If anything, the business may get even better, because they learned from the best.”