Why You Should Expand Before It's Too Late
In today’s hyper-competitive retail environment, expanding a single-store pet retail operation into a chain just might be critical to the longevity of a business.
As you will read in this month’s cover story, which is full of insights from successful pet store chain operators, there are a number of challenges and risks that come with becoming a multi-unit retailer. However, when done correctly, this type of expansion can also make it much easier to compete—particularly if one of pet specialty’s established powerhouse chains decides to move into your neighborhood.
Unfortunately, past experience has shown us just how vulnerable single-store operators can be when bigger, more polished competitors move into their market. For example, Deb Wilson, director of business development for the 12-store All the Best Pet Care chain in Seattle and one of the contributors to this month’s cover story, says she still remembers how the arrival of PetSmart impacted single-store retailers in the late 1980s. Back then, Wilson was working for one of the industry’s distributors, which saw more than 70 of its single-store customers quickly go out of business.
While the pet retail landscape has changed significantly over the past 30 years or so, this does not mean a similar scenario can’t play out today. In fact, I would contend that the number of pet specialty chains quickly expanding across the country—in some cases, fueled by the considerable resources of outside investors—may make it more likely that you will soon be facing a larger competitor down the street. And unlike big-boxes like Petco and PetSmart, these chains have the look and feel of a locally owned retailer, complete with the high level of service that customers have come to expect from a neighborhood pet store.
Of course, expansion won’t be easy, and it is not for everyone—in fact, adding new stores before you are ready has the potential to sink your business completely. However, if you are confident that your business model is unique and scalable, and you have the ability to invest the necessary time, effort and capital to pull off a successful expansion, now may be the right time to pull the trigger.
Because if you wait until another chain decides to target your market, it just might be too late.