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As retailers fight like cats and dogs over pet category market share, grocers can regain lost ground if they pick their battles more wisely.
The pet category is more robust than ever, but grocers are losing their status in the retail pack. Competition from mass merchandisers and category-killer pet superstores has eroded the supermarket channel's share of dollars spent, from what had been nearly 80 percent down to around 30 percent.
"It's true," says Jon Hauptman, v.p. for the Barrington, Ill.-based retail consultant firm Willard Bishop Consulting (WBC). "Supermarkets are losing share, primarily to pet superstores and mass merchandisers, which have dramatically increased their share over the past 10 years."
The reason is simple economics. "For mass merchandisers the shift has been price-based," says Hauptman. "They're offering everyday low prices. Across the store, mass merchandiser prices are approximately 13 percent to 18 percent lower than the prices in traditional supermarkets for the same goods. I would expect to see a similarly strong price advantage for mass merchandisers in pet products."
Because of their singular focus, specialty pet stores also have a huge advantage in creating an exciting environment for their shoppers.
"PetSmart's model and advertising to bring your pets to the store are hard to beat," admits Bill Carlson, senior category manager, grocery for Richmond, Va.-based Ukrop's Super Markets, Inc. "However, there should be real opportunities [for supermarkets] to include pet products in marketing to consumers about 'providing the best' for their family, be it comfort food, healthy options and nutrition, preparing for celebrations, or convenience."
These days Fido and Whiskers are definitely part of the family-indeed, in a growing number of cases, they're all that's left of it once the human children move on and leave the nest empty. That opens a huge opportunity for sales in the grocery channel, where the traditional family for the most part still makes the weekly stock-up trip.
"Supermarkets offer convenience, because the shoppers are in the store already," says Jolanda Stewart, spokeswoman for Wal-Mart, which has staked a big claim in the pet business with lowpriced assortments and private label. "Consumers are willing to spend more today, especially if they see value," she adds.
The key for grocers is to rely on their natural instincts...