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WWW.IBISWORLD.

COM Pet Stores in the US December 2012 1
IBISWorld Industry Report 45391
Pet Stores in the US
December 2012 Caitlin Moldvay
¡ucky dog: PeL owners wIII InvesL In µremIum
µroducLs us dIsµosubIe Income rIses
2 About this Industry
2 Industry Definition
2 Main Activities
2 Similar Industries
2 Additional Resources
3 Industry at a Glance
4 Industry Performance
4 Executive Summary
4 Key External Drivers
5 Current Performance
8 Industry Outlook
11 Industry Life Cycle
13 Products & Markets
13 Supply Chain
13 Products & Services
14 Demand Determinants
15 Major Markets
16 International Trade
17 Business Locations
19 Competitive Landscape
19 Market Share Concentration
19 Key Success Factors
20 Cost Structure Benchmarks
21 Basis of Competition
22 Barriers to Entry
23 Industry Globalization
24 Major Companies
24 PetSmart Inc.
25 PETCO Animal Supplies Inc.
28 Operating Conditions
28 Capital Intensity
29 Technology & Systems
29 Revenue Volatility
30 Regulation & Policy
31 Industry Assistance
32 Key Statistics
32 Industry Data
32 Annual Change
32 Key Ratios
33 Jargon & Glossary
www.ibisworld.com | 1-800-330-3772 | info@ibisworld.com
WWW.IBISWORLD.COM Pet Stores in the US December 2012 2
PeL sLores seII u vurIeLy oI µeLs, IncIudIng
dogs, cuLs, hsh und bIrds. SLores uIso seII
µeL Ioods und µeL suµµIIes, such us
coIIurs, Ieushes, heuILh und beuuLy uIds,
shumµoos, medIcuLIon, Loys, µeL
conLuIners, dog kenneIs und cuL IurnILure.
Some sLores uIso oIIer µeL servIces, such
us groomIng und LruInIng.
The primary activities of this industry are
Retailing pets
Retailing pet food and supplies
Providing pet grooming and boarding services
54194 Veterinary Services in the US
Establishments in this industry provide veterinary services.
81291 Pet Grooming & Boarding in the US
Operators in this industry provide pet grooming and boarding services.
45411a E-Commerce & Online Auctions in the US
Businesses in this industry retail pet foods and pet supplies via the internet.
45411b Mail Order in the US
Establishments in this industry retail pet foods and pet supplies via mail order or catalogs.
Industry Definition
Main Activities
Similar Industries
Additional Resources
About this Industry
For additional information on this industry
www.americanpetproducts.org
American Pet Products Association
www.petage.com
Pet Age Magazine
www.petbusiness.com
Pet Business
www.hsus.org
The Humane Society
The major products and services in this industry are
Live animals
Pet food
Pet services
Pet supplies
WWW.IBISWORLD.COM Pet Stores in the US December 2012 3
M
i
l
l
i
o
n
s
200
140
150
160
170
180
190
17 03 05 07 09 11 13 15 Year
Number of pets (cats and dogs)
SOURCE: WWW.IBISWORLD.COM
%

c
h
a
n
g
e
10
−4
−2
0
2
4
6
8
18 04 06 08 10 12 14 16 Year
Revenue Employment
Revenue vs. employment growth
Products and services segmentation (2012)
52.1%
Pet food
31.9%
Pet supplies
10.5%
Pet services
5.5%
Live animals
SOURCE: WWW.IBISWORLD.COM
Key Statistics
Snapshot
Industry at a Glance
Pet Stores in 2012
Industry Structure Life Cycle Stage Growth
Revenue Volatility Low
Capital Intensity Low
Industry Assistance None
Concentration Level Medium
Regulation Level Medium
Technology Change Medium
Barriers to Entry Medium
Industry Globalization Low
Competition Level Medium
Revenue
$14.7bn
Profit
$516.1m
Wages
$2.0bn
Businesses
13,613
Annual Growth 12-17
3.8%
Annual Growth 07-12
2.8%
Key External Drivers
Number of pets
(cats and dogs)
Per capita disposable
income
External competition
Number of households
Market Share
PeLSmurL ¡nc.
q¸.1%
PETCO AnImuI
SuµµIIes ¡nc.
zo.;%
p. 24
p. 4
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 4
Key External Drivers
Number of pets (cats and dogs)
As househoIds udoµL more cuLs und dogs,
demund Ior IndusLry goods such us µeL
Ioods, medIcIne und uccessorIes
Increuses. The uveruge dog or cuL owner
sµends ubouL $z¸o unnuuIIy jusL on Iood,
uccordIng Lo Lhe AmerIcun PeL ProducL
AssocIuLIon`s (APPA) NuLIonuI PeL
Owner`s Survey. ThIs drIver Is exµecLed
Lo Increuse durIng zo1¸, creuLIng u
µoLenLIuI oµµorLunILy Ior Lhe IndusLry.
Per capita disposable income
Consumers IncreusIngIy µerceIve µeLs
us members oI Lhe IumIIy, so µroducLs
Ior µeLs cun be consIdered non-
dIscreLIonury. A decreuse In dIsµosubIe
Income hus IILLIe eIIecL on demund,
sInce househoIds LyµIcuIIy reduce
sµendIng on oLher househoId und
IeIsure µroducLs beIore cuLLIng down on
µeL Iood und Loys. A rIse In µer cuµILu
dIsµosubIe Income, Lhough, Increuses
Lhe µroµensILy Ior househoIds Lo
µurchuse u greuLer quunLILy oI goods
und more µremIum ILems LhuL ure
hIgher In µrIce. ThIs drIver Is exµecLed
Lo Increuse sIowIy durIng zo1¸.
External competition
PeL Iood, Loys und uccessorIes suµµIIed by
LhIs IndusLry comµeLe wILh comµurubIe
µroducLs oIIered by suµermurkeLs und
grocery sLores. SuµermurkeLs und grocery
sLores oILen seII Lhe sume µroducLs or
very sImIIur µroducLs us µeL sLores,
µrovIdIng consumers wILh udded
convenIence. ThIs drIver Is exµecLed Lo
Executive
Summary
The PeL SLores IndusLry Is uheud oI Lhe
µuck when IL comes Lo suIes. Even durIng
Lhe GreuL RecessIon, whIch sIowed
demund LhroughouL mosL oI Lhe reLuII
secLor, Lhe IndusLry conLInued Lo yIeId
revenue growLh. ThIs Lrend wus muInIy
drIven by un IncreusIng number oI ¨µeL
µurenLs¨ - µeL owners who LreuL LheIr
Iour-Iegged IrIends us IumIIy members.
DurIng Lhe economIc downLurn, when
consumers oI uII Income IeveIs LIghLened
LheIr beILs, µeL µurenLs cuL buck on LheIr
µersonuI dIscreLIonury sµendIng hrsL
beIore sµendIng Iess on LheIr µeLs.
ConsequenLIy, revenue growLh sIowed
durIng Lhe recessIon buL muInLuIned ILs
overuII µosILIve Lrend. Revenue Is
exµecLed Lo Increuse uL un uveruge unnuuI
ruLe oI z.8% Lo $1q.; bIIIIon In Lhe hve
yeurs Lo zo1z. ¡rom zo11 Lo zo1z,
revenue Is exµecLed Lo grow q.1%.
The emergIng Lrend oI µeL µurenLs hus
uIso broughL ubouL hIgh demund Ior
µremIum µeL µroducLs und servIces. SInce
µeLs ure oILen consIdered IumIIy
members, µeL owners IrequenLIy InduIge
Lhem wILh uII-nuLuruI und orgunIc µeL
Ioods und LreuLs, In uddILIon Lo servIces
such us groomIng und duy cure. These
µosILIve Lrends, combIned wILh rIsIng
suIes, huve Increused µrohL murgIns Ior
IndusLry µIuyers In Lhe hve yeurs Lo zo1z;
¡B¡SWorId esLImuLes LhuL murgIns huve
Increused Irom ubouL z.¸% oI revenue In
zoo; Lo ubouL ¸.¸% In zo1z.
Over Lhe hve yeurs Lo zo1;, IndusLry
revenue Is µrojecLed Lo muInLuIn sLrong
growLh. As Lhe economIc recovery guIns
LrucLIon und consumers ure equIµµed
wILh heuvIer wuIIeLs, revenue Irom
µremIum µroducLs und servIces Is
µrojecLed Lo Increuse. Moreover, Lhe
number oI µeL-ownIng househoIds Is
exµecLed Lo conLInue IncreusIng, yIeIdIng
greuLer demund Ior IndusLry µroducLs.
¡rom zo1z Lo zo1;, revenue Is IorecusL Lo
rIse uL un uveruge unnuuI ruLe oI ¸.8% Lo
LoLuI $1;.8 bIIIIon.
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
¡nduIgenL µeL µurenLs wIII drIve uµ demund Ior
µremIum µeL Iood und servIces
WWW.IBISWORLD.COM Pet Stores in the US December 2012 5
Industry Performance
Growth during the
recession
¡ndusLry growLh over Lhe µusL hve yeurs
Is IurgeIy uLLrIbuLubIe Lo hIgher µeL
ownershIµ und uccomµunyIng demund
Ior µeL µroducLs. AccordIng Lo Lhe
zo11Jzo1z NuLIonuI PeL Owners Survey
µubIIshed by Lhe AmerIcun PeL ProducLs
AssocIuLIon (APPA), ubouL 6z.o% oI US
househoIds own u µeL, whIch equuLes Lo
;z.q mIIIIon homes. PeL ownershIµ hus
been growIng sIowIy buL sLeudIIy over
Current
Performance
DesµILe Lhe economIc downLurn LhuL
undermIned mosL oI Lhe reLuII secLor,
suIes Ior Lhe PeL SLores IndusLry huve
remuIned µosILIve In Lhe hve yeurs Lo
zo1z. ¡InuncIuI resIIIence In LhIs IndusLry
hus been µowered by owners` LendencIes
Lo LreuL LheIr µeLs IIke IumIIy members;
by oIIerIng more InnovuLIve, sµecIuIIzed
und µremIum µroducLs und servIces, µeL
sLores huve been ubIe Lo cush In on µeL
owners` desIres Lo µumµer LheIr µeLs. ¡n
uddILIon, growLh In µeL ownershIµ In Lhe
UnILed SLuLes hus Ied Lo hIgher demund
Ior µeL Iood und suµµIIes overuII.
ConsequenLIy, revenue Ior Lhe PeL SLores
IndusLry Is esLImuLed Lo Increuse uL un
uveruge unnuuI ruLe oI z.8% Lo $1q.;
bIIIIon over Lhe hve yeurs Lo zo1z.
¡urLhermore, Lhe IndusLry Is exµecLed Lo
µosL q.1% suIes growLh Irom zo11 Lo zo1z
us hIgher dIsµosubIe Income encouruges
greuLer sµendIng on µeLs.
WILh sLrong demund und rIsIng suIes,
µeL sLores huve exµerIenced IncreusIng
µrohL murgIns over Lhe hve-yeur µerIod.
SuIes oI µremIum µeL Iood und
suµµIIes In µurLIcuIur huve drIven uµ
µrohLubIIILy becuuse Lhey LyµIcuIIy huve
hIgher murkuµs. ¡B¡SWorId esLImuLes
LhuL In zo1z, Lhe IndusLry wIII reuch
murgIns oI ¸.¸% oI LoLuI revenue, uµ
Irom z.¸% In zoo;.
Key External Drivers
continued
remuIn consLunL over zo1¸, µosIng u
µoLenLIuI LhreuL Lo Lhe IndusLry.
Number of households
AccordIng Lo Lhe APPA`s mosL recenL
NuLIonuI PeL Owners Survey, 6z.o% oI US
househoIds own u µeL. ConsequenLIy, un
Increuse In Lhe number oI househoIds wIII
IIkeIy Ieud Lo growLh In µeL ownershIµ
IeveIs In Lhe UnILed SLuLes, suµµorLIng
IndusLry demund. ThIs drIver Is exµecLed
Lo Increuse sIowIy durIng zo1¸.
%

c
h
a
n
g
e
4
−4
−2
0
2
18 06 08 10 12 14 16 Year
Per capita disposable income
SOURCE: WWW.IBISWORLD.COM
M
i
l
l
i
o
n
s
200
140
150
160
170
180
190
17 03 05 07 09 11 13 15 Year
Number of pets (cats and dogs)
WWW.IBISWORLD.COM Pet Stores in the US December 2012 6
Industry Performance
Growth during the
recession
continued
Lhe µusL Lwo decudes. The APPA reµorLs
LhuL In 1qq8, ubouL ¸1 mIIIIon homes
owned uL IeusL one µeL; by zoo¸, Lhe
number hud rIsen Lo 6q mIIIIon. Such
growLh ruLes huve LrunsIuLed InLo rIsIng
demund Ior µeL suµµIIes In Lhe hve yeurs
Lo zo1z, even durIng recessIonury
economIc condILIons.
Becuuse suµµIIes such us Iood und
LreuLs ure requIred Ior Lhe weII beIng oI
µeLs regurdIess oI househoId Income,
demund Ior Lhe PeL SLores IndusLry hus
µroved resIIIenL uguInsL Lhe heudwInds oI
Iow consumer conhdence In Lhe economy
und decreused dIsµosubIe Income. To LhIs
end, µeL Iood, whIch uccounLs Ior ubouL
¸z.1% oI IndusLry suIes, hus been Lhe
IeudIng conLrIbuLor Lo µosILIve suIes
durIng Lhe recessIon. AccordIng Lo APPA
duLu, suIes Ior µeL Iood Increused ¸.;% In
zoo8, q.¸% In zooq und 6.8% In zo1o.
NoneLheIess, Lhe recessIon`s
sLubbornness hus udverseIy uIIecLed Lhe
IndusLry Lo some exLenL. BeLween zoo8
und zo1o, revenue growLh sIowed us
consumers were Iorced Lo cuL buck on
sµecIuILy µroducLs. AccordIng Lo u zo1o
survey oI µeL owners conducLed by PeL
BusIness, u µubIIcuLIon dedIcuLed Lo Lhe
µeL suµµIIes reLuIIIng IndusLry, Lhe
mujorILy oI resµondenLs (68.o%)
IndIcuLed LhuL Lhey hud reduced LheIr
sµendIng on µeL suµµIIes comµured wILh
Lhe µrevIous yeur.
WILh such decIInes In overuII
sµendIng, oµeruLors huve been ucLIveIy
uddIng µeL servIces Lo cuµLure more oI
Lhe consumer doIIur. PeL BusIness
reµorLed In unoLher survey LhuL In zo1o,
zz.o% oI reLuIIers udded µeL-reIuLed
servIces, such us groomIng und µeL
bourdIng, Lo Imµrove suIes und murgIns.
¡B¡SWorId exµecLs LhuL In zo1z, Lhe
conLInued emµhusIs on µeL servIces wIII
be u µrImury drIver Ior suIes. As Lhe
unemµIoymenL ruLe sIowIy subsIdes und
househoIds guIn more dIsµosubIe
Income, consumers wIII IIkeIy Increuse
LheIr sµendIng on Lhese dIscreLIonury µeL
servIces. PeL Iood suIes ure exµecLed Lo
Increuse sLeudIIy us weII wILh ¸.1%
growLh durIng zo1z.
Part of the family
¡n Lhe hve yeurs Lo zo1z, Lhe µeL
humunIzuLIon Lrend hus benehLed Lhe
PeL SLores IndusLry. A LIµµIng µoInL wus
reuched In zoo¸ und zoo6 when µeoµIe
begun rewurdIng LheIr µeLs In humun
Lerms, uccordIng Lo Lhe APPA. As such,
Lhe nume ¨µeL µurenLs¨ wus coIned Lo
descrIbe enLhusIusLIc µeL owners
(esµecIuIIy oI dogs und cuLs) who LreuL
LheIr µeLs us members oI Lhe IumIIy.
WILh LhIs Lrend, Lhe InLeresL In µeL
µumµerIng hus guIned µoµuIurILy over
Lhe hve-yeur µerIod, IeudIng Lo LhrIvIng
demund Ior IndusLry µeL servIces. ¡n
IucL, ubouL $q.6 bIIIIon Is exµecLed Lo be
sµenL on nonmedIcuI µeL servIces In
zo1z. ExumµIes oI µeL servIces go
beyond Lhe LrudILIonuI groomIng, dog
wuIkIng und LruInIng; Loduy, µremIum
servIces IIke µeL Lheruµy sessIons und
µeL-onIy ßIghLs ure uvuIIubIe Ior Iour-
Iegged IumIIy members. AddILIonuIIy,
doggy hoLeI servIces huve emerged,
equIµµed wILh heuLed beds und ßuL-
screen TVs LhuL show hIgh-dehnILIon
DVDs In µrIvuLe suILes. The rIse In
demund Ior µeL servIces hus µosILIveIy
uIIecLed Lhe IndusLry over Lhe yeurs.
SInce Lhere ure Iew vurIubIe cosLs
ussocIuLed wILh Lhese servIces, uny
Increuse In revenue dIrecLIy Imµroves
sLores` boLLom IInes.
HIgh-murgIn µumµerIng
servIces und µremIum
µroducLs huve Ied Lo
µrohL growLh
WWW.IBISWORLD.COM Pet Stores in the US December 2012 7
Industry Performance
Product innovation
¡n zoo;, meIumIne-conLumInuLed dog
und cuL Iood reµorLedIy cuused Lhe deuLh
oI more Lhun ¸,¸oo unImuIs, µromµLIng u
nuLIonwIde recuII und hurLIng Lhe
IndusLry`s reµuLuLIon und suIes. ThIs
IncIdenL ucceIeruLed Lhe Lrend Lowurd
µremIum µeL Ioods wILh nuLuruI und
orgunIc IngredIenLs. NuLuruI und hoIIsLIc
µeL Iood suIes reuched $1¸.o bIIIIon In
zoo8 und huve been growIng un uveruge
oI zo.o% unnuuIIy sInce, uccordIng Lo PeL
BusIness. The rIsIng µoµuIurILy oI LhIs
Iood segmenL hus broughL In uddILIonuI
suIes whIIe µrovIdIng µeL sLores wILh un
udvunLuge over exLernuI comµeLILors.
WILh Lhe ongoIng humunIzuLIon oI
µeLs, u sLrong µush Lowurd InnovuLIng
hIgher-quuIILy und µersonuIIzed µeL
µroducLs hus occurred In Lhe IndusLry.
ExumµIes oI such µroducLs IncIude
monogrummed sweuLers, dIgILIzed coIIur
Lugs, hundmude LreuLs und desIgner µeL
cIoLhes und uccessorIes. To IurLher
suµµorL LhIs Lrend, bIg comµunIes such us
PuuI MILcheII, Omuhu SLeuks, HurIey
DuvIdson und OId Nuvy huve uIso
InvesLed In µeL suµµIIes, now oIIerIng
µroducLs such us dog shumµoo, µeL uLLIre
und nume-brund Loys. Over Lhe hve yeurs
Lo zo1z, Lhe Lrend Lowurd µeL InduIgence
hus been u sIgnIhcunL conLrIbuLor Lo Lhe
growLh oI IndusLry revenue.
Competition from
bigger stores
PeL sLores ure LrudILIonuIIy smuII und
IndeµendenLIy owned oµeruLIons; ubouL
¸q.1% oI IndusLry µIuyers ure non-
emµIoyers (sLores wILhouL µuId
emµIoyees). Even umong busInesses LhuL
huve emµIoyees, mosL emµIoy Iewer Lhun
Iour workers. JusL ;.8% oI LoLuI oµeruLors
huve more Lhun zo. Becuuse oI LheIr
µredomInunLIy smuII sIze, IndusLry
enLerµrIses huve Iuced exLernuI
comµeLILIon Irom suµermurkeLs und
muss merchundIsers, whIIe IendIng oII
bIg-box sµecIuILy sLores Irom wILhIn Lhe
IndusLry. ThIs µressure hus conLrIbuLed
Lo overuII consoIIduLIon oI Lhe IndusLry
und hus µIuced IncredIbIe µrIce µressures
on smuII sµecIuILy sLores, some oI whIch
were Iorced Lo exIL or hnd nIche murkeLs
Lo remuIn comµeLILIve. Over Lhe hve
yeurs Lo zo1z, Lhe number oI IndusLry
oµeruLors conLrucLed uL un uveruge
unnuuI ruLe oI 1.;% Lo un esLImuLed
1¸,61¸ comµunIes. ThIs decIIne Is µurLIy
due Lo Increused exLernuI comµeLILIon
couµIed wILh conLInuIng merger und
ucquIsILIon ucLIvILy In Lhe IndusLry.
¡n recenL yeurs, suµermurkeLs huve
Iured cusLomers Irom smuIIer sµecIuILy
sLores by oIIerIng Lhe convenIence oI
one-sLoµ shoµµIng. Grocery sLores uIIow
consumers Lo shoµ Ior u wIde runge oI
househoId µroducLs In one IocuLIon,
IncIudIng µeL suµµIIes. TIme-µoor
consumers huve Lurned Lo LhIs Lyµe oI
sLore Lo sLreumIIne und sImµIIIy errunds.
MeunwhIIe, muss merchundIsers huve
emerged us mujor reLuIIers oI µeL
µroducLs, oIIerIng cheuµer µrIces Ior
IruguI consumers. Due Lo LheIr sIgnIhcunL
sIzes, sLores such us WuImurL und CosLco
exerL hIgher buyIng µower und µurchuse
In buIk Irom whoIesuIers. The cosL
suvIngs uchIeved become burguIn µrIces
Ior consumers und uIIowed Iurger sLores
Lo IncreusIngIy druw In cusLomers durIng
Lhe recessIon. As such, grocery sLores und
muss merchundIsers huve become
IeudIng reLuIIers oI µeL suµµIIes over Lhe
hve yeurs Lo zo1z. These exLernuI
reLuIIers reµresenLed ¸;.o% oI Lhe
µeL-cure murkeL und 61.o% oI Lhe µeL
Iood murkeL In zo1o, whereus
SmuIIer oµeruLors comµeLe
wILh bIg-box reLuIIers
und µeL sLores uIIke, Irom
WuImurL Lo PeLSmurL
WWW.IBISWORLD.COM Pet Stores in the US December 2012 8
Industry Performance
Industry
Outlook
The hve yeurs Lo zo1; Iook µromIsIng
Ior Lhe PeL SLores IndusLry. RIsIng µeL
ownershIµ Is exµecLed Lo serve us u
sLrong drIver Ior IndusLry demund. ¡n
uddILIon, sIowIy ImµrovIng economIc
condILIons wIII IIkeIy boosL consumer
sµendIng, uIIowIng cusLomers Lo sµIurge
even more on µremIum µeL µroducLs
und servIces. As such, revenue Is
µrojecLed Lo Increuse uL un uveruge
unnuuI ruLe oI ¸.8% Lo $1;.8 bIIIIon over
Lhe hve-yeur µerIod, begInnIng wILh
q.6% growLh Irom zo1z Lo zo1¸.
However, Lhe PeL SLores IndusLry wIII
conLInue Lo Iuce sLrong comµeLILIon
Irom grocery sLores und muss
merchundIsers, whIch Lo some exLenL
wIII µIuce u cuµ on Lhe IndusLry`s growLh.
The number oI µeLs owned by
househoIds In Lhe UnILed SLuLes Is Lhe
µrImury drIver Ior µeL sLore demund.
Becuuse Lhe IndusLry seIIs µeLs, IncIudIng
cuLs, dogs, bIrds, humsLers und guIneu
µIgs, un Increuse In ownershIµ generuIIy
LrunsIuLes Lo hIgher revenue. ¡n uddILIon,
u rIse In µeL ownershIµ Ieuds Lo hIgher
demund Ior µroducLs such us Iood, LreuLs
und Loys, sInce Lhese goods ure needed
every duy Ior µeLs` generuI weII-beIng.
To Lhe IndusLry`s benehL, demund
Ior µeLs, esµecIuIIy cuLs und dogs, Is
exµecLed Lo rIse over Lhe hve yeurs Lo
zo1;, µrImurIIy drIven by more
common sIngIe-µerson househoIds
und Lhe ugIng µoµuIuLIon,
demogruµhIc segmenLs seekIng
comµunIonshIµ. ¡B¡SWorId µrojecLs
LhuL Lhe number oI µeLs wIII Increuse uL
un uveruge unnuuI ruLe oI z.z% over
Lhe hve-yeur µerIod, conLrIbuLIng Lo
Lhe IndusLry`s growIng revenue.
WILh rIsIng suIes voIumes, Lhe
IndusLry`s µrohLubIIILy Is exµecLed Lo
grow durIng Lhe hve yeurs Lo zo1;.
¡B¡SWorId IorecusLs µrohL murgIns Lo
Increuse Irom ¸.¸% oI revenue In zo1z Lo
Competition from
bigger stores
continued
sµecIuILy sLores uccounLed Ior 1;.o% und
1q.o% oI Lhe murkeLs, resµecLIveIy,
uccordIng Lo PeL BusIness.
SmuIIer oµeruLors even Iuce
comµeLILIon In seIIIng µremIum
µroducLs, whIch ure oILen u boon Ior
smuII reLuIIers. HIgh-end goods ure
µrImurIIy soId Lhrough sµecIuILy µeL
sLores und oLher nIche reLuIIers,
µrovIdIng u degree oI guurunLeed suIes
Ior oµeruLors und shIeIdIng Lhem Irom
dIrecL comµeLILIon.
YeL bIg-box sµecIuILy sLores such us
PeLSmurL und PETCO oIIer cusLomers
Lhe besL oI boLh worIds by µrovIdIng u
broud seIecLIon oI µeL µroducLs whIIe
oµeruLIng on u scuIe Iurge enough Lo µuss
cosL suvIngs down Lo consumers In Lhe
Iorm oI Iower µrIces. ¡urLhermore, Lhese
Iurge sLores huve uIso µrovIded µremIum
µroducLs, u IucLor LhuL hud µroLecLed
smuII sµecIuILy sLores Irom exLernuI
comµeLILIon. As u resuIL, Lhe bIg-box
sLruLegy hus been u sweeµIng success In
Lhe PeL SLores IndusLry. PeLSmurL, In
µurLIcuIur, hus Increused ILs murkeL shure
Irom ¸q.¸% In zoo; Lo un exµecLed
q¸.1% In zo1z.
%

c
h
a
n
g
e
10
0
2
4
6
8
18 04 06 08 10 12 14 16 Year
Industry revenue
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 9
Industry Performance
Industry Outlook
continued
¸.q% In zo1;. RIsIng µrohLubIIILy wIII uIso
conLInue Lo brIng new enLrunLs InLo Lhe
IndusLry. The number oI enLerµrIses Is
µrojecLed Lo Increuse uL un uveruge
unnuuI ruLe oI z.o% Lo ubouL 1¸,o1q
comµunIes In zo1;.
Changing
competition
Over Lhe hve yeurs Lo zo1;, comµeLILIon
Irom exLernuI oµeruLors such us
suµermurkeLs und muss merchundIsers
Is exµecLed Lo decIIne sIIghLIy buL
remuIn sLrong. As consumers hnd
LhemseIves urmed wILh uddILIonuI
sµendIng cuµILuI, Lhey wIII IIkeIy µursue
hIgher-quuIILy µeL suµµIIes IIke
µremIum Iood.
DurIng Lhe recessIon und ILs
uILermuLh, exLernuI reLuIIers uLLrucLed
muny budgeL-consLruIned consumers by
oIIerIng u IImILed seIecLIon oI Iow- Lo
medIum-quuIILy goods uL dIscounLed
µrIces. However, us dIsµosubIe Income
IeveIs Increuse In IIne wILh Lhe economIc
recovery In comIng yeurs, cusLomers ure
exµecLed Lo Ioosen LheIr budgeLs und
sµIurge on hIgher-quuIILy ILems. As u
resuIL, consumers wIII seek oµLIons
bused on IucLors oLher Lhun Iow µrIces
und Lhereby reLurn Lo µuLronIzIng
smuIIer oµeruLors LhuL oIIer hIgher
quuIILy und servIces uL hIgher µrIces.
DesµILe Lhese IuvorubIe condILIons,
however, comµeLILIon Irom
suµermurkeLs und muss merchundIsers
Is exµecLed Lo remuIn sLrong Ior busIc
µeL suµµIIes IIke dry µeL Iood und cuL
IILLer. Becuuse Lhese µroducLs show IILLIe
µroducL dIIIerenLIuLIon, consumers wIII
IIkeIy conLInue Lo shoµ uL Iurge reLuIIers
Lo Luke udvunLuge oI dIscounLed µrIces
und Lhe convenIence oI one-sLoµ shoµs.
SInce much oI Lhe IndusLry consIsLs oI
u hIgh number oI smuIIer sLores, nIche
µroducL murkeLIng wIII become
IncreusIngIy ImµorLunL us euch oµeruLor
uLLemµLs Lo seL ILseII uµurL Irom oLher
sLores. ¡or exumµIe, µersonuIIzed dIeLs
Ior µeLs ure exµecLed Lo serve us u
µoLenLIuI nIche murkeL Ior IndusLry
Premium products will
remain popular
SInce u devusLuLIng µeL Iood recuII oI
zoo;, whIch Is susµecLed Lo huve cuused
more Lhun ¸,¸oo unImuI deuLhs, µeL
owners huve become IncreusIngIy
conscIous oI Lhe Iood LhuL Lhey gIve
LheIr Iour-Iegged comµunIons. As u
resuIL, muny nuLuruI und orgunIc Ioods
und LreuLs huve guIned µoµuIurILy,
µrovIng Lo be IucruLIve sources oI
revenue over Lhe µusL hve yeurs.
¡B¡SWorId µrojecLs LhuL LhIs Lrend wIII
conLInue over Lhe hve yeurs Lo zo1;. As
househoIds conLInue Lo revIew LheIr
unImuIs` dIeL us u meuns oI ImµrovIng
µeLs` overuII heuILh, demund Ior nuLuruI
µeL Iood wIII IIkeIy remuIn sLrong.
WILh ImµrovIng economIc condILIons,
demund Ior sµecIuIIzed µeL servIces Is
exµecLed Lo conLInue. Over Lhe µusL hve
yeurs, µeL servIces huve served us
µrImury drIvers oI growLh wILhIn Lhe
IndusLry, u Lrend LhuL wIII IIkeIy conLInue
us µer cuµILu dIsµosubIe Income Is
exµecLed Lo grow un uveruge oI z.o%
unnuuIIy Irom zo1z Lo zo1;. As
unemµIoymenL decIInes over Lhe IuLer
µurL oI Lhe hve-yeur µerIod, more
consumers wIII use LheIr exLru Income Lo
µumµer LheIr µeLs wILh servIces such us
groomIng und bourdIng.
The murkeL Ior µremIum
µeL Iood und suµµIIes
wIII grow us economIc
condILIons Imµrove
WWW.IBISWORLD.COM Pet Stores in the US December 2012 10
Industry Performance
Changing
competition
continued
oµeruLors, IncIudIng sµecIuI Iood cuLered
Lo obese unImuIs. AccordIng Lo Lhe
AmerIcun PeL ProducLs AssocIuLIon`s
zo11Jzo1z NuLIonuI PeL Owners Survey,
1z.o% oI dogs und 1q.o% oI cuLs ure
consIdered overweIghL. SInce muny µeL
owners huve become concerned wILh
LheIr µeLs` heuILh, Lhe creuLIon oI oµLIons
Lo Imµrove µeL heuILh µresenLs u
µoLenLIuI oµµorLunILy Ior IndusLry
oµeruLors. SeveruI µeL Iood
munuIucLurers huve IdenLIhed µoLenLIuI
growLh In cusLomIzed Iood oµLIons,
LukIng InLo consIderuLIon µeL breeds, IIIe
sLuges, duIIy ucLIvILIes, umounL oI LIme
Indoors und sµecIhc medIcuI condILIons.
WWW.IBISWORLD.COM Pet Stores in the US December 2012 11
Industry Performance
The IndusLry`s conLrIbuLIon Lo Lhe economy Is
exµecLed Lo grow over Lhe 1o yeurs Lo zo1;
New µroducLs, such us µremIum µeL Iood
und servIces, ure beIng InLroduced
PeL ownershIµ Is conLInuIng Lo rIse sLeudIIy,
exµundIng Lhe IndusLry`s LurgeL murkeL
Life Cycle Stage
SOURCE: WWW.IBISWORLD.COM
20
15
10
5
0
–5
–10
–10 10 15 0 20 –5 5
%

G
r
o
w
t
h

i
n

s
h
a
r
e

o
f

e
c
o
n
o
m
y
% Growth in number of establishments
Quality Growth
High growth in economic
importance; weaker companies
close down; developed
technology and markets
Maturity
Company
consolidation;
level of economic
importance stable
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
technology change
Decline
Shrinking economic
importance
Key Features of a Growth Industry
Revenue grows faster than the economy
Many new companies enter the market
Rapid technology & process change
Growing customer acceptance of product
Rapid introduction of products & brands
E-Commerce & Online Auctions
Animal Food
Production
Mail Order
Toy, Doll & Game Manufacturing
Veterinary Services
ood d oo FFoo FFFoo oo oo ood ood
ry Services Ser ry S ry ry ry ry ry ry vi
Pet Stores
WWW.IBISWORLD.COM Pet Stores in the US December 2012 12
Industry Performance
Industry Life Cycle
The PeL SLores IndusLry Is In u growLh
sLuge oI ILs IIIe cycIe, LyµIhed by new
µroducL InLroducLIons und rIsIng number
oI enLerµrIses. ¡n IucL, IndusLry vuIued
udded, whIch meusures Lhe IndusLry`s
conLrIbuLIon Lo Lhe US economy, Is
exµecLed Lo Increuse ¸.¸% µer yeur In Lhe
1o yeurs Lo zo1;. ¡n comµurIson, US GDP
Is µrojecLed Lo grow by 1.8% unnuuIIy
over Lhe sume µerIod. ThIs IndIcuLes LhuL
Lhe IndusLry Is growIng uL u IusLer ruLe
Lhun Lhe economy, u sIgn LhuL IL Is In Lhe
growLh µhuse oI ILs IIIe cycIe.
Over Lhe hve yeurs Lo zo1z, Lhe
IndusLry hus µosLed sLrong suIes drIven
by µeL owners IncreusIngIy humunIzIng
LheIr µeLs. To LhIs µoInL, AmerIcun PeL
ProducLs AssocIuLIon IndIcuLed LhuL u
LIµµIng µoInL wus reuched In zoo¸ und
zoo6, whereby µeoµIe begun rewurdIng
µeLs In humun Lerms. ConsequenLIy, new
µroducLs und servIces huve emerged In
LhIs IndusLry Lo cuLer Lo LhIs Lrend;
IncreusIng number oI µeL sLores begun Lo
oIIer µremIum µeL Iood und LreuLs, In
uddILIon Lo servIces such us groomIng,
LruInIng, wuIkIng und IuII-servIce
bourdIng. ThIs Lrend oI ruµId µroducL
InLroducLIons IndIcuLes LhuL Lhe PeL
SLores IndusLry Is In Lhe deveIoµIng
sLuge. However, new µroducL
InLroducLIons ure exµecLed Lo sIow down
In Lhe hve yeurs Lo zo1; us µroducL
suLuruLIon Is reuched.
This industry
is Growing
WWW.IBISWORLD.COM Pet Stores in the US December 2012 13
Products & Services
Pet food
Becuuse Iood Is u necessILy Ior uII µeLs,
IL Is noL surµrIsIng LhuL µeL Ioods muke
uµ Lhe IurgesL µroducL segmenL Ior Lhe
IndusLry. ThIs segmenL covers u wIde
runge oI µroducLs such us dry und weL
Iood Ior dogs und cuLs, bIrd Ieed,
crIckeLs und worms Ior reµLIIes und
oLher LreuLs und suµµIemenLs Ior
househoId µeLs. ¡n zoo;, however, LhIs
segmenL wus hurL by u nuLIonwIde recuII
oI meIumIne-conLumInuLed dog und cuL
Iood, whIch reµorLedIy cuused Lhe deuLh
oI more Lhun ¸,¸oo unImuIs. ThIs
IncIdenL, however, hus conLrIbuLed Lo
Lhe Lrend Lowurd µremIum µeL Ioods
wILh nuLuruI und orgunIc IngredIenLs.
These µremIum µeL Ioods Lend Lo be
hIgher µrIced wILh Iurger murkuµs; us u
resuIL, LhIs segmenL`s shure oI revenue
hus been rIsIng sInce zoo;. Toduy, u
vurIeLy oI µremIum µeL Ioods ure
uvuIIubIe Lo consumers. ExumµIes
IncIude Lhe ruw dIeL Ior dog und cuL
Ioods, weIghL conLroI Iood Ior obese
unImuIs, sµecIuIIzed IormuIus Ior
sensILIve sLomuchs und IreshIy buked
cukes und cookIes us LreuLs. ¡n zo1z,
LhIs segmenL Is exµecLed Lo uccounL Ior
¸z.1% oI IndusLry revenue.
Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
KEY BUYING INDUSTRIES
99 Consumers in the US
The Pet Stores industry relies on consumers to purchase pet products and to utilize industry
services.
KEY SELLING INDUSTRIES
31111 Animal Food Production in the US
This industry supplies pet stores with a vast array of pet food.
33993 Toy, Doll & Game Manufacturing in the US
This industry supplies pet toys and accessories to industry operators.
54194 Veterinary Services in the US
This industry provides veterinary care services such as vaccinations to industry operators.
Supply Chain
Products and services segmentation (2012)
Total $14.7bn
52.1%
Pet food
31.9%
Pet supplies
10.5%
Pet services
5.5%
Live animals
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 14
Products & Markets
Demand
Determinants
Demunds Ior µeLs und µeL suµµIIes
ure uIIecLed by Lhe ruLe oI µeL
ownershIµ, Iood und suµµIy µrIces,
househoId Income, demogruµhIcs,
und heuILh uwureness.
Pet ownership
PeL ownershIµ Is u muIn drIver Ior
IndusLry demund by dehnILIon, us
IndusLry oµeruLors ure µrImury reLuIIers
oI µeLs. Thus, us µeL ownershIµ Increuses,
Lhe number oI µeLs µurchused uIso rIses,
IeudIng Lo hIgher demund und suIes Ior
Lhe IndusLry. ¡n uddILIon, u rIse LhIs
number uIso Ieuds Lo hIgher demund Ior
µroducLs such us Iood, LreuLs und Loys,
sInce Lhese goods ure needed every duy
Ior Lhe weII-beIng oI µeLs. PeL ownershIµ
Products & Services
continued
Pet supplies
ProducLs In LhIs segmenL IncIude Iood
bowIs, coIIurs und Ieushes, µeL cIoLhIng,
brushes und combs, shoveIs und
scooµers, cuL IILLer, cuges bIrds und
reµLIIes, LruveI currIers und uny oLher
vurIous uccessorIes Ior µeLs. AILhough
LhIs segmenL mukes uµ Lhe second-IurgesL
µroducL murkeL Ior Lhe PeL SLores
IndusLry, LhIs segmenL`s shure oI revenue
hus been decIInIng In Lhe hve yeurs Lo
zo1z µrImurIIy due Lo comµeLILIon;
becuuse LhIs segmenL encomµusses u
wIde vurIeLy oI goods und Lhere ure no
reguIuLIons LhuL IImIL LheIr suIe,
comµeLILIon Is quILe hIgh. To LhIs µoInL,
µeL suµµIIes ure beIng IncreusIngIy soId uL
u vurIeLy oI reLuII ouLIeLs (e.g. home
ImµrovemenL sLores now reLuII doggIe
doors und yeIIow Iuwn sµoL removers). ¡n
zo1z, µeL suµµIIes ure esLImuLed Lo
uccounL Ior ¸1.q%oI LoLuI suIes
Services
PeL servIces huve been Lhe IusLesL-
growIng µroducL segmenL Ior Lhe
IndusLry. ¡L IncIudes IuII servIce
groomIng, huIrcuLs, buLhs, LoenuII
LrImmIng und LooLh brushIng, buL
excIudes veLerInury servIces. OLher
servIces muy IncIude such ucLIvILIes
us LruInIng, bourdIng und duy cumµ.
Much oI Lhe rIse oI LhIs segmenL hus
been drIven by u greuLer InLeresL In
µeL µumµerIng. As more µeL owners
udoµLed Lhem us members oI LheIr
IumIIy, demund Ior InduIgIng unImuIs
uIso Increused. ¡n zo1z, LhIs segmenL
Is exµecLed Lo uccounL Ior ubouL
1o.¸% oI revenue.
Live animal purchases
The IIve unImuI segmenL oI Lhe IndusLry
Is exµecLed Lo reµresenL ¸.¸% oI LoLuI
IndusLry suIes, und LhIs shure hus
remuIned sLubIe over Lhe µusL hve yeurs.
ThIs µroducL segmenL Is smuII becuuse u
µeL Is normuIIy u one-oII µurchuse, whIIe
µroducLs In oLher segmenLs, such us µeL
suµµIIes und µeL Ioods, need Lo be
µurchused LhroughouL Lhe IIIe oI Lhe µeL
Lhus requIrIng reµeLILIve sµendIng.
¡urLhermore, mujor µIuyers In Lhe
IndusLry onIy seII smuII unImuIs und hsh,
und µurLner wILh IocuI µeL µrogrums Ior
cuL und dog udoµLIons. On Lhe oLher
hund, smuIIer oµeruLIons oILen seII uII
Lyµes oI unImuIs: cuLs, dogs, hsh, rubbILs,
bIrds, smuII unImuIs und even reµLIIes.
Pet ownership segmentation in the US
(2012)
Animal Share of total pets (%)
Birds 4.3
Cats 22.9
Dogs 20.7
Horse 2.1
Freshwater Fish 40.0
Saltwater Fish 2.3
Reptiles 3.4
Small Animals 4.2
SOURCE: AMERICAN PET PRODUCTS ASSOCIATION
WWW.IBISWORLD.COM Pet Stores in the US December 2012 15
Products & Markets
Major Markets
The IurgesL murkeL Ior Lhe PeL SLores
IndusLry Is consumers beLween Lhe uges
oI q¸ Lo ¸q, who uccounL Ior z8.o% oI
LoLuI revenue. Muny members oI LhIs uge
grouµ Iook Ior µeL comµunIons Lo hII Lhe
emµLy sµuce In LheIr househoIds uILer
LheIr chIIdren Ieuve home. As such, u
Iurge µroµorLIon oI LhIs segmenL cun be
consIdered µeL enLhusIusLs, who consIder
µeLs IumIIy members, uccordIng Lo
PeLSmurL, u mujor µIuyer In LhIs
IndusLry. ¡urLhermore, consumers In
LhIs µroducL murkeL ure LyµIcuIIy
emµIoyed und huve sLeudy Income
sLreums, uIIowIng Lhem Lo sµend IreeIy
on µeL suµµIIes.
The second-IurgesL murkeL consIsLs oI
consumers beLween Lhe uges oI ¸¸ Lo qq,
Demand
Determinants
continued
hus been on Lhe rIse over Lhe IusL IourLeen
yeurs. ¡n 1qq8, ¸6.o% oI US househoIds
owned u µeL. ComµuruLIveIy, In zo1z,
ubouL 6z.o% oI househoIds ure esLImuLed
Lo own u µeL uccordIng Lo Lhe AmerIcun
PeL ProducLs AssocIuLIon.
Income
HousehoIds wILh hIgher Incomes ure
ubIe Lo sµend more on dIscreLIonury
ILems und servIces soId uL µeL sLores,
IeudIng Lo hIgher demund. As such, µeL
ownIng househoIds wILh hIgh dIsµosubIe
Income huve been Lhe muIn cusLomers
Ior Iuxury und Lrendy µeL µroducLs,
IncIudIng µremIum µeL Iood und
desIgner µeL Loys, In Lhe hve yeurs Lo
zo1z. ¡n uddILIon, Lhose wILh u hIgher
Income Lend Lo LruveI more. ¡n Lurn, Lhey
ure more IIkeIy Lo uLIIIze µeL bourdIng
servIces or µurchuse µroducLs LhuL uIIow
more comIorL Ior boLh Lhem und LheIr
µeL Lo LruveI LogeLher.
Demographics and lifestyle
The chunge In demogruµhIcs und
IIIesLyIe oI househoIds Is uIso un
ImµorLunL deLermInunL oI demund. ¡I
househoIds ure IrequenLIy reIocuLIng or
workIng Ionger hours, Lhen Lhese IucLors
muy reduce u househoId`s wIIIIngness Lo
µurchuse u µeL. ¡n uddILIon, househoIds
IIvIng In uµurLmenLs ure Iess IIkeIy Lo
huve µeLs sInce muny uµurLmenLs do noL
uIIow µeLs. On u µosILIve noLe, ugIng
µoµuIuLIon muy Increuse demund Ior
µeLs, sInce oIder demogruµhIcs oILen
µurchuse µeLs Ior comµunIonshIµ
uILer LheIr chIIdren und grundchIIdren
Ieuve home.
Major market segmentation (2012)
Total $14.7bn
28%
Consumers aged
45 to 54
7%
Consumers aged
65 and older
24%
Consumers aged
35 to 44
18%
Consumers aged
25 to 34
13%
Consumers aged
55 to 64
10%
Consumers aged
25 and younger
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 16
Products & Markets
International Trade
¡nLernuLIonuI Lrude ucLIvILy Is uccounLed
uL Lhe munuIucLurIng IeveI by
convenLIon; us such, LhIs reLuII IndusLry
does noL LechnIcuIIy huve ImµorLs or
exµorLs. However, µroducLs und suµµIIes
In Lhe PeL SLores IndusLry ure ImµorLed
und exµorLed uL Lhe munuIucLurIng IeveI
und Lhen soId In Lhe domesLIc murkeL.
PrecIse exµorL und ImµorL duLu on µeL
µroducLs und suµµIIes Is noL reudIIy
uvuIIubIe us Lhey ure cuLegorIzed InLo
broud segmenLs LhuL conLuIn u Iurge
number oI oLher non-µeL reIuLed
µroducLs. However, Lrends In µeL Iood
Lrude µrovIde some InsIghL InLo Lrends
regurdIng overuII µeL-µroducL Lrude
IeveIs; Lhese ure IncIuded In Lhe AnImuI
¡ood ProducLIon IndusLry reµorL
(¡B¡SWorId reµorL ¸1111). AccordIng Lo
Lhe IuLesL oIhcIuI duLu µrovIded by Lhe
¡nLernuLIonuI Trude CommIssIon,
ImµorLs Ior uII kInds oI µeL Iood ure
esLImuLed uL $1.z bIIIIon In zo1z, whIIe
exµorLs ure esLImuLed uL $z.6 bIIIIon.
Cunudu Is Lhe IeudIng Lrude µurLner Ior
boLh ImµorLs und exµorLs.
Major Markets
continued
who reµresenL ubouL zq.o% oI revenue.
Consumers In LhIs murkeL LyµIcuIIy huve
chIIdren, und Lhey consIder Lhe heuILh
und behuvIoruI benehLs u µeL cun huve on
LheIr kIds. AccordIng Lo Lhe AmerIcun PeL
ProducLs AssocIuLIon, ubouL ¸8.o% oI
househoIds wILh chIIdren under 18 yeurs
oId own uL IeusL one µeL.
Consumers beLween Lhe uges oI z¸
und ¸q ure esLImuLed Lo uccounL Ior
18.o% oI Lhe murkeL. ThIs demogruµhIc
grouµ uccounLs Ior u Iower shure us
Lhey ure oILen subjecL Lo busy
scheduIes, mukIng IL dIIhcuIL Ior Lhem
Lo own µeLs. Consumers beLween Lhe
uges oI ¸¸ und 6q ure exµecLed Lo
reµresenL 1¸.o% oI Lhe murkeL In zo1z.
However, LhIs hgure Is IorecusL Lo
Increuse over Lhe nexL hve yeurs us
consumers uged q¸ Lo ¸q grow oIder
und IncreusIngIy enLer LhIs cuLegory.
The Lwo smuIIesL murkeLs ure mude oI
consumers under Lhe uge oI z¸
(uccounLIng Ior 1o.o% oI Lhe murkeL)
und consumers over Lhe uge oI 6¸
(;.o%). Consumers In Lhese cuLegorIes
huve IImILed Income, Lhus decreusIng
LheIr ubIIILy Lo own or sµend on µeLs. ¡n
uddILIon, Lhese Lwo demogruµhIcs oILen
do noL IIve In houses; ruLher, Lhey renL
uµurLmenLs or IIve In reLIremenL homes.
Muny such dweIIIngs do noL uIIow µeLs,
IurLher hInderIng LhIs segmenL`s ubIIILy
Lo own µeLs.
WWW.IBISWORLD.COM Pet Stores in the US December 2012 17
Products & Markets
Business Locations 2012
MO
1.9
West West West West West
West
West
Rocky
Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains Mountains
Plains Plains Plains Plains Plains Plains Plains
Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest
Southeast SSoutheast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast
New
England g England
VT
0.3
MA
2.0
RI
0.5
NJ
3.3
DE
0.5
NH
0.7
CT
1.5
MD
1.9
DC
0.1
1
5
3
7
2
6
4
8 9
Additional States (as marked on map)
AZ
2.2
CA
13.2
NV
0.9
OR
2.0
WA
3.1
MT
0.3
NE
0.5
MN
1.7
IA
0.9
OH
3.9
VA
2.7
FL
7.7
KS
0.9
CO
2.6
UT
0.7
ID
0.5
TX
5.6
OK
0.9
NC
2.5
AK
0.2
WY
0.3
TN
1.5
KY
0.7
GA
2.2
IL
4.1
ME
0.6
ND
0.2
WI
1.9 MI
3.5
PA
4.4
WV
0.3
SD
0.2
NM
0.6
AR
0.5
MS
0.4
AL
1.0
SC
1.3
LA
1.0
HI
0.4
IN
2.0
NY
7.4
5
6
7
8
3
2
1
4
7
9
SOURCE: WWW.IBISWORLD.COM
t
Mid-
Atlantic Atlantic Atlantic Atlantic
Establishments (%)
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
Great
Lakes
WWW.IBISWORLD.COM Pet Stores in the US December 2012 18
Products & Markets
Business Locations
PeL SLores ure µrImurIIy IocuLed In Lhe
SouLheusL, Lhe WesL, Lhe MId-ALIunLIc
und Lhe GreuL ¡ukes regIons oI Lhe
UnILed SLuLes. ¡ndusLry IocuLIons ure
bused µrImurIIy on Lhe number oI
househoIds In euch regIon, us weII us Lhe
medIun Income IeveI oI househoIds.
Southeast
The SouLheusL hoIds Lhe hIghesL
number oI IndusLry esLubIIshmenLs; In
zo1z, z1.8% oI IndusLry esLubIIshmenLs
were IocuLed In Lhe regIon. The
SouLheusL Is Lhe mosL µoµuIuLed regIon
oI Lhe UnILed SLuLes wILh u quurLer oI
Lhe nuLIon`s µoµuIuLIon. ThereIore gIven
Lhe hIgher µroµorLIon oI househoIds
Lhere Is u greuLer demund Ior IndusLry
reLuIIers. WILhIn Lhe SouLheusL, ¡IorIdu
hus Lhe hIghesL µroµorLIon oI IndusLry
esLubIIshmenLs, esLImuLed uL ;.;% oI Lhe
nuLIon`s LoLuI.
West
The WesL hus Lhe second-hIghesL
µroµorLIon oI IndusLry esLubIIshmenLs; In
zo1z, Lhe regIon hud 1q.8% oI µeL sLores.
CuIIIornIu hus Lhe hIghesL number oI µeL
sLores In Lhe counLry uL 1¸.z%. The
µrImury reusons Ior Lhe hIgher-Lhun-
uveruge number oI µeL sLores In Lhe WesL
regIon ure µoµuIuLIon densILy und
Income IeveIs. The WesL hus 1;.o% oI Lhe
nuLIon`s LoLuI µoµuIuLIon. ¡urLhermore,
boLh CuIIIornIu und Nevudu huve u
hIgher-Lhun-uveruge medIun Income by
sLuLe. AddILIonuIIy, wILhIn CuIIIornIu
more Lhun z6% oI househoIds huve
Incomes wILhIn Lhe Loµ Lhree quudrunLs.
Mid-Atlantic
The MId-ALIunLIc regIon hus 1;.6% oI
IndusLry esLubIIshmenLs. The mosL
µoµuIur sLuLes IncIude: New York und
PennsyIvunIu whIch uccounL Ior u
resµecLIve ;.q% und q.q% oI Lhe
IndusLry`s IocuLIons. These sLuLes huve
some oI Lhe hIghesL µoµuIuLIons In Lhe
UnILed SLuLes due Lo LheIr Iurge
meLroµoIILun cenLers. The regIon uIso
hus hIgher-Lhun-uveruge Income IeveIs.
GIven LhuL househoIds wILhIn Lhe
regIon huve u Iurger umounL oI
dIsµosubIe Income, Lhey ure more ubIe
Lo uIIord Lo own u µeL.
Great Lakes
The GreuL ¡ukes regIon Is Lhe IourLh-
mosL µoµuIur IocuLIon Ior IndusLry
esLubIIshmenLs. ¡n zo1z, 1¸.q% oI µeL
sLores were IocuLed In Lhe GreuL ¡ukes
regIon. ¡IIInoIs Is Lhe hILh-hIghesL
µoµuIuLed sLuLe In Lhe nuLIon und
LhereIore u µoµuIur cenLer Ior IndusLry
oµeruLors. The sLuLe hoIds un esLImuLed
q.1% oI µeL sLores.
OLher smuII µurLIcIµuLIng regIons In
Lhe IndusLry IncIude: Lhe SouLhwesL, New
EngIund, Lhe PIuIns und Lhe Rocky
MounLuIns. Among Lhe uIoremenLIoned
regIons, Lhe SouLhwesL communds Lhe
IurgesL shure oI IndusLry esLubIIshmenLs
uL q.¸% oI Lhe LoLuI. These regIons huve
smuIIer consumer murkeLs, whIch
reduces demund Ior µeL sLores.
%
30
0
10
20
S
o
u
t
h
w
e
s
t
W
e
s
t
G
r
e
a
t

L
a
k
e
s
M
i
d
-
A
t
l
a
n
t
i
c
N
e
w

E
n
g
l
a
n
d
P
l
a
i
n
s
R
o
c
k
y

M
o
u
n
t
a
i
n
s
S
o
u
t
h
e
a
s
t
Establishments
Population
Establishments vs. population
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 19
Key Success Factors
Attractive product presentation
¡n order Lo druw cusLomers und
encouruge µurchuses, eye-cuLchIng
µromoLIons und dIsµIuys ure essenLIuI
Ior µeL sLores.
Experienced work force
¡L Is ImµorLunL Lo emµIoy u hIghIy
cuµubIe sLuII wILh cIeur knowIedge oI
Lhe µeL IndusLry Lo beLLer ussIsL
cusLomers und boosL suIes.
Proximity to key markets
OµeruLors need Lo be IocuLed In hIgh-
LruIhc und hIgh-vIsIbIIILy IocuLIons,
such us mujor shoµµIng µrecIncLs,
In order Lo muxImIze sLore LruIhc
und suIes.
Economies of scope
SuccessIuI oµeruLors need u runge oI
Lhe mosL µoµuIur µeLs und µeL suµµIIes
uL dIIIerenL IeveIs oI µrIce und quuIILy.
OIIerIng u wIder vurIeLy oI µroducLs wIII
uLLrucL u Iurger cusLomer buse.
Effective quality control
OµeruLors musL ensure LhuL µeL servIces
ure uµ Lo sLundurd Ior Lhe sµecIhc Lyµe
oI unImuI und breed.
Market Share
Concentration
More Lhun huII (6¸.8%) oI Lhe PeL SLores
IndusLry`s revenue comes Irom Lwo
sµecIuILy suµµIy reLuIIers: PeLSmurL und
PETCO. The oLher µorLIon oI Lhe IndusLry
consIsLs oI IumIIy-owned sLores, smuII
IrunchIses und smuII chuIns oI µeL sLores.
The IndusLry hus u moderuLe IeveI oI
concenLruLIon wILh Lhe Loµ Iour
comµunIes generuLIng un esLImuLed
68.8% oI Lhe IndusLry`s revenue.
AILhough Lhere Is u moderuLe degree oI
murkeL shure concenLruLIon, smuII
oµeruLors ure sLIII ubIe Lo hnd nIche
murkeLs In LheIr geogruµhIcuI IocuLIons,
und rureIy exµund beyond Lhose ureus.
¡B¡SWorId esLImuLes LhuL by Lhe end oI
zo1z, Lhe IndusLry wIII huve ubouL 1¸,61¸
hrms, oI whIch ubouL ¸q.1% wIII be
oµeruLed by u smuII busIness wILh no
emµIoyees. AbouL 8¸.o% enLerµrIses
huve Iewer Lhun hve emµIoyees, whIIe
onIy ;.8% huve more Lhun 1o workers.
¡n Lhe hve yeurs Lo zo1;, mujor µIuyers
PeLSmurL und PETCO ure exµecLed Lo
grow LheIr shure oI Lhe IndusLry, wILh u
sLeudy sLreum oI cusLomers µuLronIzIng
LheIr sLores. ThIs Is becuuse Lhese bIg-box
reLuIIers ure ubIe Lo oIIer cusLomers u
¨besL oI boLh worIds¨ scenurIo, where
Lhey µrovIde broud und IndusLry-sµecIhc
µroducL seIecLIons, whIIe oµeruLIng on u
scuIe such LhuL Lhey cun µurchuse In buIk
und µuss on suvIngs Lo Lhe consumers.
ConsequenLIy, Lhese sLores ure
exµecLed Lo grow uL Lhe exµense oI
smuII sLores In Lhe IndusLry.
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Companies by employment size
Number of employees Share (%)
0-4 83.0
5-9 9.3
10-19 5.3
20-99 2.1
100-499 0.3
500+ 0.1
SOURCE: US CENSUS BUREAU
Level
Concentration in this
industry is Medium
IBISWorld identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
WWW.IBISWORLD.COM Pet Stores in the US December 2012 20
Competitive Landscape
Cost Structure
Benchmarks
Profit
The PeL SLores IndusLry Is exµecLed Lo
obLuIn uveruge µrohL murgIns equIvuIenL
Lo ¸.¸% oI revenue In zo1z, uµ Irom z.¸%
In zoo;. ThIs Increuse In µrohLubIIILy hus
been drIven by u growIng µeL µoµuIuLIon
und un IncreusIng wIIIIngness oI µeL
owners Lo sµend on LheIr µeLs, µurLIcuIurIy
on µremIum or hIgh-murgIn µroducLs.
However, IL Is ImµorLunL Lo noLe LhuL Lhe
ucLuuI IeveI oI murgIns muy vury
consIderubIy beLween IndusLry
µurLIcIµunLs. ¡or InsLunce, Iurger µIuyers
such us PETCO und PeLSmurL LyµIcuIIy
µurchuse In Iurge quunLILIes, whIch enubIe
Lhem Lo sµend Iess µer ILem und Imµrove
murgIns. ¡n uddILIon, LheIr Iurge scuIe
uIIows mujor µIuyers Lo seII In hIgh voIume
uL dIscounLed µrIces, whIch enubIes Lhem
Lo uIIord Iower murkuµs buL Lo µrohL Irom
Iurger suIes voIumes. On Lhe conLrury,
smuIIer µIuyers In LhIs IndusLry do noL
huve such µurchusIng µower. ThereIore,
cosL oI goods µer unIL Lends Lo be hIgher
Ior Lhese µIuyers, cuusIng murgIns Lo be
Iower Ior smuIIer hrms.
Purchases
Purchuse cosLs wIII remuIn Lhe sIngIe
IurgesL exµense Ior Lhe IndusLry In zo1z,
uccounLIng Ior un esLImuLed ;o.¸% oI
LoLuI revenue. Purchuses IncIude u wIde
runge oI µeL Iood und µeL suµµIIes such
us coIIurs, Ieushes, medIcuLIon,
shumµoos, dog kenneIs und µeL Loys,
und u runge oI µeLs IncIudIng dogs, cuLs,
bIrds, hsh, smuII unImuIs und reµLIIes.
Purchuse exµenses huve Increused
sIIghLIy over Lhe hve yeurs Lo zo1z.
AccordIng Lo PeL BusIness, u µubIIcuLIon
Ior Lhe µeL und µeL suµµIIes reLuIIIng
IndusLry, much oI LhIs growLh hus been
due Lo hIgher µrIces Irom uµsLreum
IndusLrIes (I.e. munuIucLurIng und
whoIesuIIng IndusLrIes) µussed down
Lhe suµµIy chuIn.
Sector vs. Industry Costs
Q Profit
Q Wages
Q Purchases
Q Depreciation
Q Marketing
Q Rent & Utilities
Q Other
Average Costs of
all Industries in
sector (2012)
Industry Costs
(2012)
0
20
40
60
P
e
r
c
e
n
t
a
g
e

o
f

r
e
v
e
n
u
e
80
100
3.5
7.0
3.5
3.0
1.5
72.0
9.5
3.5
3.2
6.0
2.0
1.6
70.3
13.4
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 21
Competitive Landscape
Basis of Competition
Due Lo medIum burrIers Lo enLry und
growIng µrohLubIIILy Irom µremIum
µroducLs und servIces, Lhere ure u Iurge
number oI µeL sLore oµeruLIons, gIvIng
Lhe IndusLry u medIum IeveI oI
comµeLILIon. ThIs IndusLry hus been
growIng sLrongIy over Lhe µusL decude us
u resuIL oI IuvorubIe demogruµhIc Lrends
und Lhe growIng Lendency oI µeL owners
Lo LreuL LheIr µeLs us members oI Lhe
IumIIy. ¡n recenL yeurs, IndusLry
µurLIcIµunLs huve Luken udvunLuge oI
Lhese Lrends und cushed In on hIgher
murgIn µroducLs und servIces, such us
µremIum µeL Iood und hIgh-quuIILy
groomIng servIces.
The µIuyers In LhIs IndusLry ure
µroLecLed Irom exLernuI comµeLILIon In
Lhe µremIum µeL Iood µroducL segmenL,
becuuse Lhere ure oILen munuIucLurer`s
resLrIcLIons on Lhe dIsLrIbuLIon oI
µremIum µroducLs Lo suµermurkeLs.
¡ndusLry µurLIcIµunLs ure uIso µroLecLed
Irom exLernuI comµeLILIon Irom
suµermurkeLs, grocery sLores und
dIscounL reLuIIers In Lhe growIng ureu oI
vuIue udded µeL servIces such us
groomIng und obedIence LruInIng.
Internal
PeL sLores comµeLe wILh euch oLher
bused on µrIce, µroducL vurIeLy,
cusLomer servIce, brund uwureness,
vurIeLy oI µeL servIces und sLore IocuLIon.
SInce µroducL µurchuses muke uµ Lhe
mujorILy oI suIes Ior µeL sLores, LheIr
muIn busIs oI comµeLILIon Is µroducL
runge und quuIILy, us weII us µrIce. ¡urge
µIuyers IIke PETCO und PeLSmurL
benehL Irom economIes oI scoµe und ure
ubIe Lo µrovIde broud runges oI µeLs, µeL
Ioods, µeL suµµIIes und µeL servIces wILh
dIIIerenL IeveIs oI quuIILy ucross u runge
oI µrIces Lo uµµeuI Lo IndIvIduuI
consumer µreIerences. ¡n uddILIon, Lhey
ure cuµubIe oI oIIerIng µroducLs Lhrough
LheIr µrIvuLe IubeI brunds uL u Iower
µrIce. BoLh oI Lhese µIuyers benehL Irom
beIng ubIe Lo buy µroducLs In buIk und
µroducIng LheIr own µroducLs uL Iower
Cost Structure
Benchmarks
continued
Wages
Due Lo Lhe Iubor-InLensIve nuLure oI Lhe
reLuII secLor, wuges ure esLImuLed Lo muke
uµ Lhe second-hIghesL exµense ILem Ior
µeL sLore oµeruLors, uccounLIng Ior 1¸.q%
oI Lhe revenue In zo1z. ¡n µeL sLores,
Iubor Is needed Lo µrovIde cure Ior µeLs,
muInLuIn sLock IeveIs und µrovIde
cusLomer servIce. ¡urLhermore, udded
Iocus hus been µIuced on Iubor over Lhe
hve yeurs Lo zo1z, us µeL servIces huve
become one oI Lhe IusLesL-growIng
sources oI revenue Ior Lhe IndusLry.
NoneLheIess, IndusLry revenue hus been
growIng uL u IusLer ruLe Lhun Lhe number
oI emµIoyees or wuges; us such, wuges us
u shure oI revenue huve sIIghLIy decIIned.
Depreciation
DeµrecIuLIon exµenses ure exµecLed Lo
uccounL Ior ubouL 1.6% oI IndusLry
revenue In zo1z. ThIs Iow IeveI oI
deµrecIuLIon Is LyµIcuI Ior reLuIIIng
IndusLrIes, whIch ure very Iubor InLensIve
und requIre mInImuI cuµILuI cosLs In
oµeruLIons. However, LhIs hgure Is hIgh
comµured wILh oLher reLuIIIng IndusLrIes
becuuse µeL sLores musL ucquIre sµecIuI
cuges und Lunks Ior unImuIs, In uddILIon
Lo sheIvIng und cush regIsLers Ior sLores.
RenLuI cosLs und uLIIILIes cosLs ure
exµecLed Lo reµresenL ¸.o% und 1.o% oI
LoLuI revenue, resµecLIveIy, In zo1z.
Other costs
OµeruLors In LhIs IndusLry uIso Incur u
vurIeLy oI oLher exµenses, IncIudIng
udmInIsLruLIve, Insurunce, securILy und
udverLIsIng cosLs. ¡n µurLIcuIur, boLh
Iurge und smuII oµeruLors InvesL much oI
LheIr Income In udverLIsIng Lo generuLe
sLore LruIhc und boosL suIes.
Level & Trend
Competition in
this industry is
Medium and the
trend is Increasing
WWW.IBISWORLD.COM Pet Stores in the US December 2012 22
Competitive Landscape
Barriers to Entry
HIgh IeveIs oI comµeLILIon und sLrIngenL
reguIuLIons ussocIuLed wILh enLerIng LhIs
IndusLry muy deLer some Irom enLerIng
Lhe IndusLry. NeverLheIess, Lhere ure
vurIous nIche murkeLs uvuIIubIe Ior new
µIuyers Lo occuµy, sµecIhcuIIy Lhose LhuL
sµecIuIIze In µremIum und InnovuLIve
Iood, µroducLs und servIces.
A sIgnIhcunL IucLor LhuL cun hInder un
oµeruLor Irom enLerIng LhIs IndusLry Is
governmenL reguIuLIons. There ure
IederuI und sLuLe Iuws reguIuLIng µeL
shoµs und Lhe suIe oI unImuIs. ¡or
exumµIe, Lhe PeL AnImuIs AcL 1q¸1
requIres µeL shoµs Lo geL u IIcense In
uccordunce wILh Lhe AcL beIore Lhey cun
oµen. ¡n uddILIon, Lhe AnImuI WeIIure
AcL oI 1q66 dIcLuLes how µeLs soId In µeL
sLores musL be muInLuIned. PeL shoµs
need Lo uddress u runge oI Issues und
receIve IIcenses bused on IederuI und
sLuLe requIremenLs beIore µermIssIon Lo
oµeruLe Is grunLed.
The IndusLry`s concenLruLIon cun be
unoLher burrIer Lo µoLenLIuI enLrunLs.
There ure onIy Lwo nuLIonuI reLuII chuIns
In LhIs IndusLry und LogeLher Lhey
uccounL Ior over huII oI IndusLry
revenue; smuIIer sLores und IrunchIses
uccounL Ior Lhe remuInIng µorLIon.
AILhough LhIs IndusLry Is hIghIy
IrugmenLed, Lhere Is uIso InLense µrIce
comµeLILIon Irom muss merchundIsers,
onIIne oµeruLors und cuLuIog reLuIIers,
whIch muy µrovIde u burrIer Ior new,
IndeµendenL reLuIIers.
Basis of Competition
continued
cosL, whIch uIIows Lhem Lo oIIer
µroducLs uL u Iow µrIce und sLIII uLLuIn u
µrohL. As u resuIL, smuIIer sLores IeeI Lhe
µressure Lo µrovIde more µroducLs uL u
Iower µrIce, whIch resuILs In Iower
murk-uµs by Lhese sLores und uILImuLeIy
Iower µrohL murgIns. However, smuIIer
sLores benehL Irom LheIr ubIIILy Lo oIIer
µersonuIIzed cusLomer servIces und
moId Lo Lhe sµecIhc needs oI Lhe nIche
murkeL In LheIr IocuI ureu.
The Lwo mujor µIuyers In LhIs IndusLry
uIso InvesL consIderubIe resources Lowurd
brund uwureness und IoyuILy. ¡or
exumµIe, PETCO Is now Lhe mujor
sµonsor oI PETCO Purk, Lhe new home oI
Lhe Sun DIego Pudres. ¡n uddILIon, boLh
PETCO und PeLSmurL ure heuvIIy
InvoIved In µeL churILIes und unImuI
weIIure orgunIzuLIons. ¡n zooq, PeLSmurL
InLroduced u new cusLomer IoyuILy
µrogrum In order Lo Imµrove reµeuL
cusLomer LruIhc.
External
HIsLorIcuIIy, Lhe suIe oI µeL Iood
µroducLs hus been µrImurIIy Lhrough
Lhe suµermurkeL chunneI. ¡urge
suµermurkeLs sLock u wIde vurIeLy oI
µeL Iood und suµµIIes. BuIk µurchuses
by suµermurkeLs generuIIy enubIe
Lhem Lo oIIer Iower µrIces Lhun
sµecIuILy reLuIIers. ¡n recenL yeurs,
uddILIonuI comµeLILIon hus come Irom
muss merchundIsers und dIscounL
reLuIIers such us WuImurL und CosLco
LhuL sLock u wIde vurIeLy oI µroducLs uL
comµeLILIve µrIces. However, muss
merchundIsers und dIscounL reLuIIers
do noL seII uILru-µremIum µeL
µroducLs us Lhey ure IImILed by
munuIucLurers` resLrIcLIons.
¡urLher comµeLILIon comes Irom Lhe
E-commerce und OnIIne AucLIons
IndusLry (¡B¡SWorId reµorL q¸q11u) und
Lhe MuII-Order IndusLry (¡B¡SWorId
reµorL q¸q11b). These comµeLIng
IndusLrIes IncIude comµunIes such us
PeLsLore.com Lhrough whIch consumers
cun µurchuse µroducLs wILhouL
µhysIcuIIy huvIng Lo vIsIL u sLore;
however, Lhese oµeruLors ure noL
cIussIhed us µurL oI LhIs IndusLry. ¡n
uddILIon, some comµeLILIon comes Irom
veLerInury servIces us Lhey uIso seII
cusLomIzed µeL Iood und some µroducLs.
Level & Trend
Barriers to Entry
in this industry are
Medium and Steady
WWW.IBISWORLD.COM Pet Stores in the US December 2012 23
Competitive Landscape
Industry
Globalization
ThIs IndusLry Is churucLerIzed by u Iurge
number oI smuII µIuyers. Muny oI Lhe
smuIIer, IndeµendenL µeL suµµIy reLuIIers
ure IumIIy-owned busInesses LhuL oµeruLe
wILhIn u IocuI or regIonuI scoµe. ¡n
uddILIon, Lhe IndusLry`s mujor comµunIes
ure domesLIcuIIy owned. ThereIore, LhIs
IndusLry hus u Iow IeveI oI gIobuIIzuLIon.
Barriers to Entry
continued
OµenIng u new µeL sLore und meeLIng
IIcensIng sLundurds Is exµensIve. ¡n
uddILIon, u sIgnIhcunL shure oI IundIng
muy be dIrecLed Lowurd murkeLIng Lo
buIId consumer InLeresL und
recognILIon. The InILIuI cosL oI
esLubIIshIng or µurchusIng u reLuII
ouLIeL, In uddILIon Lo µurchusIng und
muInLuInIng InvenLory IeveIs, muy be u
burrIer Ior new enLrunLs. BurrIers ure
greuLer Ior new smuIIer reLuIIers becuuse
IormIng reIIubIe suµµIy reIuLIonshIµs
wILh whoIesuIers und munuIucLurers
muy µrove Lo be dIIhcuIL. ExIsLIng und
weII esLubIIshed dIsLrIbuLIon
reIuLIonshIµs muy deLer µoLenLIuI
oµeruLors Irom enLerIng LhIs IndusLry, us
IL µrovIdes un udvunLuge Lo exIsLIng
reLuIIers by gIvIng uccess Lo Iow µrIced
hIgh quuIILy goods.
Barriers to Entry checklist Level
Competition Medium
Concentration Medium
Life Cycle Stage Growth
Capital Intensity Low
Technology Change Medium
Regulation & Policy Medium
Industry Assistance None
SOURCE: WWW.IBISWORLD.COM
Level & Trend
Globalization in this
industry is Low and
the trend is Steady
WWW.IBISWORLD.COM Pet Stores in the US December 2012 24
Player Performance
SInce ILs esLubIIshmenL In 1q8;, PhoenIx-
bused PeLSmurL hus become Lhe Loµ
sµecIuILy reLuIIer oI µeL Iood und suµµIIes.
PeLSmurL oµeruLes 1,z6q sLores, LyµIcuIIy
IocuLed In regIonuI shoµµIng cenLers neur
oLher suµersLores und wurehouse sLores,
und emµIoys ubouL ¸o,ooo µeoµIe In Lhe
UnILed SLuLes und Cunudu. By oIIerIng
more Lhun 1o,ooo µeL µroducLs und
µrovIdIng vurIous µeL servIces, Lhe
reLuIIer uIms Lo µrovIde u one-sLoµ
shoµµIng exµerIence wILh Iow µrIces.
PeLSmurL cuLegorIzes ILs µroducLs InLo
Lhree muIn cuLegorIes: consumubIes, hurd
goods und µeLs. ConsumubIes IncIude µeL
Ioods, LreuLs und IILLer, In uddILIon Lo
µremIum µroducLs, muny oI whIch ure
noL Iound In suµermurkeLs or muss
merchundIsers. PeL suµµIIes such us
coIIurs, Ieushes, heuILh und beuuLy uIds,
shumµoos, medIcuLIon, Loys, µeL currIers,
dog kenneIs, cuL IurnILure, equesLrIun
suµµIIes, bIrdcuges, uquurIums und hILers
muke uµ Lhe hurd goods cuLegory. PeLs
soId by Lhe comµuny IncIude hsh, bIrds,
reµLIIes und smuII µeLs. ¡urger unImuIs
such us cuLs und dogs ure noL soId In
PeLSmurL; however, Lhey ure uvuIIubIe Ior
udoµLIon Lhrough Lhe PeLSmurL ChurILIes`
AdoµLIon Progrum deveIoµed wILh
humune orgunIzuLIons.
¡n uddILIon Lo seIIIng µroducLs,
PeLSmurL hus exµunded ILs servIce
oIIerIng Lo IncIude In-sLore bourdIng
IucIIILIes, groomIng servIces, obedIence
LruInIng und IuII-servIce veLerInury
servIces. ¡n zooz, PeLSmurL Iuunched u
comµIeLe µeL bourdIng und duy-cure
servIce cuIIed PeLsHoLeI wILh zq-hour
suµervIsIon, un on-sILe veLerInurIun,
uIr-condILIoned rooms und duIIy sµecIuILy
LreuLs. AbouL 1q¸ PeLSmurL sLores IncIude
PeLsHoLeI bourdIng IucIIILIes und DoggIe
Duy Cumµs. PeL servIces currenLIy
uccounL Ior 11.z% oI revenue Ior Lhe
comµuny, uµ Irom q.8% In zoo;.
PeLSmurL hus conLInued Lo exµund ILs
nuLIonwIde µresence Lhrough ucquIsILIons
und sLore exµunsIons, growIng by z61
sLores over Lhe µusL hve yeurs. DurIng Lhe
hrsL nIne monLhs oI zo1z, Lhe comµuny
exµunded ILs sLore IocuLIons by ¸; new
sLores. ¡n zo11, Lhe comµuny oµened q¸
more sLores. However, Lwo evenLs huve
dumuged Lhe comµuny`s reµuLuLIon durIng
Lhe µusL hve yeurs. ¡n zoo8, PeLSmurL
susµended Lhe suIe oI bIrds In ILs sLores
nuLIonwIde uILer dIscoverIng LhuL u hIgh
number oI bIrds currIed u bucLerIuI
InIecLIon LhuL hud Lhe µoLenLIuI Lo sµreud
Lo humuns. ¡n uddILIon, Lhe comµuny wus
Major Companies
PetSmart Inc. | PETCO Animal Supplies Inc. | Other Companies
36.2%
Other
PetSmart Inc. 43.1%
PETCO Animal Supplies Inc. 20.7%
SOURCE: WWW.IBISWORLD.COM
Major players
(Market share)
PetSmart Inc.
Market share: 43.1%
PetSmart Inc. (US operations) –
financial performance
Year
Revenue
($ million) (% change)
2007 4,500 N/C
2008 4,900 8.9
2009 5,100 4.1
2010 5,400 5.9
2011 5,800 7.4
2012* 6,350 9.5
*Estimate
SOURCE: ANNUAL REPORT
WWW.IBISWORLD.COM Pet Stores in the US December 2012 25
Major Companies
Player Performance
EsLubIIshed In 1q6¸, PETCO AnImuI
SuµµIIes Is Lhe second-IurgesL µeL suµµIy
sµecIuILy reLuIIer In Lhe UnILed SLuLes.
The comµuny Is heudquurLered In Sun
DIego, CA, und bousLs ubouL 1,1¸o sLores
ucross Lhe counLry wILh IocuLIons In uII ¸o
sLuLes, mukIng IL Lhe onIy µeL sLore Lo
serve Lhe enLIre nuLIon. ¡Ls sLores curry uµ
Lo 1o,ooo dIIIerenL µeL-reIuLed ILems uL
uny LIme, IncIudIng µeL Iood, coIIurs,
Ieushes, groomIng µroducLs, Loys, heuILh
und beuuLy uIds, kenneIs und µeL houses.
¡Ike oLher IndusLry µurLIcIµunLs, PETCO
oIIers u vurIeLy oI veLerInury und
obedIence servIces Ior unImuIs, buL does
noL seII cuLs or dogs. RuLher, un udoµLIon
µrogrum (Lhe ThInk AdoµLIon ¡IrsL
µrogrum) Is used In µurLnershIµ wILh
IocuI unImuI weIIure orgunIzuLIons.
Over Lhe µusL decude, PETCO hus been
subjecL Lo severuI mujor chunges In ILs
busIness. ¡n zo11, PETCO ucquIred
Player Performance
continued
dumuged by u Iurge recuII oI µeL Ioods
(munuIucLured by Menu ¡oods) LhuL wus
conLumInuLed by meIumIne und
meIumIne-reIuLed comµounds.
Financial performance
Over Lhe hve yeurs Lo zo1z, PeLSmurL`s
revenue Irom ILs US oµeruLIons Is
exµecLed Lo Increuse uL un uveruge unnuuI
ruLe oI ;.1% Lo $6.q bIIIIon. As Lhe
economy guIns LrucLIon und consumers
guIn uddILIonuI dIsµosubIe Income Lo
sµend on LheIr µeLs, ¡B¡SWorId
unLIcIµuLes LhuL comµuny suIes wIII grow
q.¸% In zo1z, IoIIowIng u ;.q% Increuse
In zo11 und sLrong growLh In zo1o. ¡n
hscuI zooq und zoo8, PeLSmurL µosLed
sLrong suIes, wILh revenue rIsIng q.1%
und ¸.q%, resµecLIveIy. Such growLh ruLes
durIng Lhe recessIon were uIded by
resIIIenL IndusLry demund; consumers
bureIy scuIed buck sµendIng on LheIr
Iour-Iegged comµunIons even when
Incomes IeII. To LhIs end, uveruge sume-
sLore suIes Increused 1.q% und ¸.8% In
zooq und zoo8, resµecLIveIy, whIIe
servIce suIes Increused q.z% und 1¸.8% In
zooq und zoo8, resµecLIveIy.
BeIore Lhe recessIon, Lhe comµuny
µerIormunce wus even sLronger, wILh
1o.q% revenue growLh In zoo;. Some oI
Lhe growLh wus drIven by 11z new sLore
oµenIngs, us weII us u z.q% Increuse In
comµurubIe sLore suIes. ¡n uddILIon,
hIgher demund Ior µeL servIces becume
un IncreusIngIy ImµorLunL suIes uvenue.
AILer PeLSmurL udded ¸¸ new PeLsHoLeIs
LhuL oIIered groomIng, LruInIng, bourdIng
und duy cumµ, servIce suIes rose zz.o%
durIng Lhe yeur.
PetSmart Inc. – financial performance
Year
Revenue
($ million) (% change)
Operating Income
($ million) (% change)
2007 4,672.7 10.4 351.5 39.8
2008 5,065.3 8.4 369.9 5.2
2009 5,336.4 5.4 369.1 -0.2
2010 5,693.8 6.7 428.7 16.1
2011 6,113.3 7.4 503.1 17.4
2012* 6,706.3 9.7 553.4 10.0
*Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD
PETCO Animal
Supplies Inc.
Market share: 20.7%
WWW.IBISWORLD.COM Pet Stores in the US December 2012 26
Major Companies
Other Companies
PeLSmurL und PETCO ure Lhe Loµ dogs
In Lhe PeL SLores IndusLry, uccounLIng
Ior more Lhun huII oI LoLuI IndusLry
revenue In zo1z. WhIIe Lhe IndusLry Is
concenLruLed uL Lhe Loµ, Lhe resL oI Lhe
IndusLry Is churucLerIzed by u Iurge
number oI smuII und µrIvuLeIy owned
µeL sLores. ¡n IucL, ubouL ¸q.1% oI
comµunIes ure nonemµIoyers.
¡urLhermore, ubouL 8¸.o% oI comµunIes
emµIoy Iewer Lhun hve workers, whIIe
onIy ;.8% huve more Lhun 1o workers.
Due Lo LhIs IrugmenLed nuLure, Lhe vusL
mujorILy oI IndusLry µIuyers do noL
IndIvIduuIIy conLrIbuLe u consIderubIe
shure oI Lhe IndusLry`s revenue.
Pet Supplies Plus
Estimated market share: 3.6%
PeL SuµµIIes PIus Is u IrunchIse busIness
oµeruLIng z¸q sLores ucross z¸ sLuLes. PeL
SuµµIIes PIus oIIers IrunchIses In seIecLed
sLuLes Lo sIngIe sLore owner-oµeruLors
und uIso Lo ureu deveIoµers who own uII
sLores In u desIgnuLed murkeL regIon.
AccordIng Lo comµuny InIormuLIon, Lhe
Player Performance
continued
ComµIeLe PeLmurL, un OhIo-bused µeL
sµecIuILy chuIn. The ucquIsILIon,
consIsLIng oI zq sLores, exµunded Lhe
comµuny`s reuch InLo OhIo und Lhe
SouLheusL regIon. ¡n zoo6, Texus PucIhc
Grouµ und ¡eonurd Green & PurLners
Look Lhe comµuny µrIvuLe Ior Lhe second
LIme; Lhe deuI wus vuIued uL $1.8 bIIIIon,
IncIudIng ussumed debL. The sume grouµ
Look PETCO µrIvuLe Ior $6oo.o mIIIIon In
zooo, buL PETCO reLurned Lo Lhe µubIIc
domuIn In zooz.
Financial performance
Becuuse Lhe comµuny wenL µrIvuLe In
zoo6, PETCO`s hnuncIuIs ure no Ionger
uvuIIubIe Lo Lhe µubIIc, IImILIng Lhe ubIIILy
Lo µrovIde yeur-by-yeur unuIysIs oI
hnuncIuI µerIormunce. However,
¡B¡SWorId µrojecLs LhuL, IIke Lhe IndusLry
us u whoIe, Lhe hrm hus exµerIenced
µosILIve growLh In Lhe hve yeurs Lo zo1z.
¡B¡SWorId esLImuLes LhuL PETCO`s
revenue wIII LoLuI $¸.1 bIIIIon In zo1z,
murkIng un uveruge q.q% unnuuI Increuse
over Lhe hve-yeur µerIod.
SLrong suIes oI µremIum µroducLs ure
exµecLed Lo be Lhe muIn drIver Ior Lhe
growLh. The comµuny InvesLed heuvIIy In
LhIs µroducL segmenL In zooq by
IuunchIng UnIeushed, u sµecIuILy sLore Ior
onIy µremIum, nuLuruI, orgunIc und ruw
µeL Ioods. PETCO oµeruLes ¸; UnIeushed
sLores In CuIIIornIu, MuryIund,
MussuchuseLLs, New York, VIrgInIu und
Lhe DIsLrIcL oI CoIumbIu.
Petco Animal Supplies Inc. – financial performance*
Year
Revenue
($ million) (% change) Employees (% change)
2007 2,400 9.1 20,100 2.7
2008 2,550 6.3 22,000 9.5
2009 2,700 5.9 23,200 5.5
2010 2,800 3.7 23,500 1.3
2011 2,855 2.0 24,400 3.8
2012 3,050 6.8 25,500 4.5
*Estimates
SOURCE: FORBES.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 27
Major Companies
Other Companies
continued
µurchuse oI u PeL SuµµIIes PIus IrunchIse
cosLs beLween $6z¸,¸oo und $1.q mIIIIon.
PeL SuµµIIes PIus sLores ure generuIIy
IocuLed In hIgh-LruIhc ureus und ure
IImILed Lo ubouL ¸,ooo Lo 6,ooo squure
IeeL In sIze Ior smuIIer murkeLs und ;,ooo
Lo q,ooo squure IeeL In Iurger
meLroµoIILun ureus. The smuIIer sLore
conceµL wus desIgned Lo keeµ oµeruLIng
cosLs Lo u mInImum In u bId Lo oIIer µeL
Iood und suµµIIes uL comµeLILIve µrIces.
The comµuny uIso uses u jusL-In-LIme
deIIvery sysLem Lo oIIer u wIde vurIeLy oI
µroducLs wILhouL exLensIve sLore sµuce Lo
sLock InvenLory. ¡B¡SWorId esLImuLes
LhuL PeL SuµµIIes PIus wIII generuLe ubouL
$¸qo.o mIIIIon In zo1z, uccounLIng Ior
ubouL ¸.6% oI Lhe murkeL.
Pet Supermarket Inc.
Estimated market share: 1.4%
WILh u murkeL shure oI Iess Lhun z.o%,
PeL SuµermurkeL ¡nc. Is u smuII, IumIIy-
owned reLuIIer oI µeL suµµIIes und
medIcInes. PeL SuµermurkeL oµeruLes
ubouL 1z; sLores µrImurIIy In ¡IorIdu
buL uIso In AIubumu, CuIIIornIu,
GeorgIu, KenLucky, Nevudu und NorLh
CuroIInu. The comµuny emµIoys ubouL
1,qoo ussocIuLes. PeL SuµermurkeL seIIs
more Lhun 8,ooo µeL cure µroducLs,
IncIudIng Iood, Loys, medIcIne und
cIoLhIng, us weII us smuII unImuIs such
us humsLers, guIneu µIgs, rubbILs und
LroµIcuI hsh. ¡B¡SWorId esLImuLes LhuL
PeL SuµermurkeL wIII generuLe ubouL
$z1¸.o mIIIIon In zo1z.
WWW.IBISWORLD.COM Pet Stores in the US December 2012 28
Capital Intensity
The PeL SLores IndusLry, sImIIur Lo mosL
oLher reLuII IndusLrIes, hus u Iow IeveI oI
cuµILuI InLensILy. ¡or every doIIur sµenL
on wuges, ubouL $o.1z Is InvesLed In Lhe
sLore und equIµmenL. MosL cuµILuI cosLs
ure reIuLed Lo sheIvIng, sLore, comµuLers,
cushIer equIµmenL und oLher equIµmenL
such us cugIng Ior unImuIs, whIch do noL
need Lo be consLunLIy reµIuced. On Lhe
oLher hund, LhIs IndusLry Is Iubor
InLensIve becuuse emµIoyees ure needed
Lo oµeruLe und munuge Lhe sLores,
µrovIde cusLomer servIce und suµµorL,
resLock Lhe merchundIse und Lo µrovIde
cure Ior µeLs.
The IeveI oI cuµILuI InLensILy hus
remuIned sLeudy In Lhe IusL hve yeurs,
reßecLIng Lhe Iubor-InLensIve nuLure oI
Lhe reLuII IndusLry. To LhIs µoInL, Lhe
cosL oI Iubor wILhIn LhIs IndusLry Is
reIuLIveIy hIgh comµured Lo LhuL
exµerIenced by comµeLILors such us
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Tools of the Trade: Growth Strategies for Success
SOURCE: WWW.IBISWORLD.COM
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Change in Share of the Economy
New Age Economy
Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Traditional Service Economy
Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
Investment Economy
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
E-Commerce & Online Auctions
Animal Food Production
Mail Order
Toy, Doll & Game Manufacturing
Veterinary
Services
Mail Mail Mail Ma Mail Mail il Mail Mail Ma Ma Ma Ma Mail Mail Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Mail Mail Mail Mail Mail il O Mail il Mail il Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma OOO il O O il O il il O il O il O il OOO Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma O il OOO il O OOOO il O OOOOOO
Pet Stores
Capital intensity
0.5
0.0
0.1
0.2
0.3
0.4
SOURCE: WWW.IBISWORLD.COM
Dotted line shows a high level of capital intensity
Capital units per labor unit
Pet Stores Retail Trade Economy
Level
The level of capital
intensity is Low
WWW.IBISWORLD.COM Pet Stores in the US December 2012 29
Operating Conditions
Revenue Volatility
PeL sLores seII dIscreLIonury (e.g. µeLs und
Loys) und nondIscreLIonury µroducLs (e.g.
µeL Iood). WhIIe µurchusIng u µeL Is
generuIIy dIscreLIonury, u Iurge
µroµorLIon oI exµendILure on u µeL Is
nondIscreLIonury; Lhese IncIude Iood und
medIcIne. To µrovIde u breukdown, µeL
Iood mukes uµ ubouL ¸8.o% oI IndusLry
revenue, µeL suµµIIes und medIcIne
uccounL Ior z;.¸%, whIIe new µeL
µurchuses reµresenL Ior onIy q.¸%. As
such, Lhe nondIscreLIonury comµonenL oI
Technology
& Systems
TechnoIogIcuI udvunces In LhIs IndusLry
huve IncIuded comµuLer scunnIng cush
regIsLers und uuLomuLed InvenLory
equIµmenL. The InLroducLIon oI LhIs
LechnoIogy hus enubIed reLuIIers Lo
beLLer munuge eIhcIency oI oµeruLIons
und InvenLory. TechnoIogy uL checkouL
hus Ied Lo comµuLerIzed µoInL-oI-suIe
equIµmenL, whIch conLroIs und records
merchundIsIng, dIsLrIbuLIon, suIes und
sLock murkdowns. ¡urLhermore, bur
code scunnIng hus oIIered Lhe
udvunLuges oI hIgher Iubor µroducLIvILy
LhuL Increuses Lhe sµeed uL whIch
InIormuLIon Is µussed, greuLer conLroI
over Lhe dIsLrIbuLIon oI goods und
reduced errors uIong Lhe suµµIy chuIn.
New ImµrovemenLs wIII boosL revenue
Ior Lhe Iurger sLores who cun uIIord Lo
InvesL In Lhe LechnoIogIes. ¡or
exumµIe, Iurger reLuIIers wIII benehL
Irom RudIo ¡requency ¡denLIhcuLIon
(R¡¡D), whIch µrovIdes reuI LIme
InIormuLIon on InvenLory und heIµ Lo
reduce shrInkuge µrobIems us weII us
Imµrove eIhcIency.
Capital Intensity
continued
suµermurkeLs, muss merchundIsers und
onIIne µeL suµµIy reLuIIers. ThIs Is
becuuse Lhe oLher sLores do noL reLuII
µeLs dIrecLIy whIch InherenLIy requIres u
smuIIer sLuII. ¡n uddILIon, Lhese sLores
do noL Incur cosLs ussocIuLed wILh
emµIoyee LruInIng, sInce workers uL
Lhese reLuIIers do noL requIre IndusLry-
sµecIhc knowIedge. ¡or onIIne reLuIIers,
Iubor cosLs ure exceµLIonuIIy Iow us Lhey
ure noL requIred Lo ouLIuy exµendILure
on cusLomer servIce, nor ure Lhey
requIred Lo huve sheIvIng, dIsµIuys or
cush regIsLers.
Level
The level of
Technology Change
is Medium
SOURCE: WWW.IBISWORLD.COM
Volatility vs Growth
R
e
v
e
n
u
e

v
o
l
a
t
i
l
i
t
y
*

(
%
)
1000
100
10
1
0.1
Five year annualized revenue growth (%)
–30 –10 10 30 50 70
Hazardous
Stagnant
Rollercoaster
Blue Chip
* Axis is in logarithmic scale
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Pet Stores
Level
The level of
Volatility is Low
WWW.IBISWORLD.COM Pet Stores in the US December 2012 30
Operating Conditions
Regulation & Policy
There ure IndusLry sµecIhc und generuI
comµeLILIve reguIuLIons LhuL uµµIy Lo LhIs
IndusLry. The LrunsµorLuLIon, hundIIng
und suIe oI smuII µeLs ure governed by
vurIous IederuI, sLuLe und IocuI
reguIuLIons. ¡n uddILIon, IndusLry
µurLIcIµunLs ure subjecL Lo
envIronmenLuI reguIuLIons Imµosed by
IederuI, sLuLe und IocuI uuLhorILIes In
reIuLIon Lo Lhe generuLIon, hundIIng,
sLoruge, LrunsµorLuLIon und dIsµosuI oI
wusLe und bIohuzurdous muLerIuIs, und
Lhe suIe und dIsLrIbuLIon oI µroducLs.
The PeL AnImuIs AcL 1q¸1 deems IL un
oIIense Lo oµen u µeL shoµ unIess IL Is
grunLed u IIcense In uccordunce wILh Lhe
AcL. When decIdIng Lo grunL u IIcense,
dIsLrIcL councIIs need Lo consIder
wheLher Lhere Is suILubIe
uccommoduLIon und enough Iood und
wuLer, wheLher Lhe unImuIs ure soId uL
Loo young un uge und wheLher
reusonubIe µrecuuLIons huve been Luken
Lo curb Lhe sµreud oI dIseuse. The
AnImuI WeIIure AcL (AWA) µroLecLs
cerLuIn unImuIs Irom Inhumune
LreuLmenL und negIecL. The AWA
requIres LhuL mInImum sLundurds oI cure
und LreuLmenL be µrovIded Ior cerLuIn
unImuIs LhuL ure bred Ior commercIuI
suIe, used In reseurch, LrunsµorLed
commercIuIIy or exhIbILed Lo Lhe µubIIc.
ReLuII µeL shoµs ure noL covered under
Lhe AcL unIess Lhe shoµ seIIs exoLIc or
zoo unImuIs or seIIs unImuIs Lo reguIuLed
busInesses. PeLs owned by µrIvuLe
cILIzens ure noL reguIuLed. ReguIuLed
busInesses ure requIred Lo keeµ uccuruLe
records oI ucquIsILIon und dIsµosILIon
und u descrIµLIon oI unImuIs LhuL come
InLo LheIr µossessIon.
Muny sLuLe und IocuI governmenLs
huve µussed uddILIonuI unImuI weIIure
IegIsIuLIon. AbouL 1; sLuLes huve
reguIuLIons governIng Lhe suIe oI dogs
und 1q sLuLes govern Lhe suIe oI cuLs.
These reguIuLIons sLIµuIuLe Lhe
InIormuLIon LhuL seIIers musL µrovIde uL
Lhe LIme oI µurchuse und vurIous oµLIons
buyers huve II Lhe µurchused µeL Is sIck.
These sLuLes huve reguIuLIons LhuL uIIow
consumers Lo obLuIn u reImbursemenL
when u sIck unImuI Is µurchused Irom u
µeL sLore. ThIs Is known us u ¨Iemon Iuw¨
whIch Is desIgned Lo µroLecL consumers
LhuL buy unImuIs Irom µeL shoµs.
Revenue Volatility
continued
IndusLry merchundIse uccounLs Ior Lhe
mujorILy oI IndusLry revenue. ThIs hIgh
IeveI oI nondIscreLIonury demund keeµs
Lhe voIuLIIILy oI LhIs IndusLry Iow. To LhIs
µoInL, yeur-on-yeur revenue ßucLuuLIons
uveruged z.1% over Lhe hve yeurs Lo zo1z.
Level & Trend
The level of
Regulation is
Medium and the
trend is Steady
WWW.IBISWORLD.COM Pet Stores in the US December 2012 31
Operating Conditions
Industry Assistance
The PeL SLores IndusLry does noL receIve
uny sµecIhc governmenL suµµorL, In Lhe
Iorm oI subsIdIes or oLherwIse.
However, Lhere ure severuI Lrude
ussocIuLIons whIch reµresenL Lhe
IndusLry. MosL noLubIe umong Lhem Is
Lhe AmerIcun PeL AssocIuLIon whIch
µromoLes µeL ownershIµ und
dIssemInuLes IndusLry-reIuLed
InIormuLIon Lo members.
Key tariffs
Goods Low rate High rate
Saddlery and harness for any animal (excluding dogs) 2.8 2.8
Dog leashes, collars, muzzles, harnesses and similar 2.4 2.4
Pet food 0.0 0.0
SOURCE: USITC
Level & Trend
The level of
Industry Assistance
is None and the
trend is Steady
WWW.IBISWORLD.COM Pet Stores in the US December 2012 32
Key Statistics
Revenue
($m)
Industry
Value Added
($m)
Establish-
ments Enterprises Employment Exports Imports
Wages
($m)
Domestic
Demand
Number of Pets
- Cats and Dogs
(Million)
2003 10,234.7 1,987.3 15,835 13,790 88,620 -- -- 1,441.3 N/A 143
2004 11,064.5 2,102.1 16,541 14,213 90,933 -- -- 1,512.5 N/A 153
2005 11,486.7 2,078.9 16,813 14,483 98,384 -- -- 1,469.9 N/A 163
2006 11,925.2 2,330.0 17,130 14,558 101,237 -- -- 1,690.0 N/A 154
2007 12,872.9 2,400.4 17,638 14,804 109,870 -- -- 1,813.8 N/A 163
2008 13,246.2 2,442.9 17,110 14,115 106,460 -- -- 1,818.9 N/A 165
2009 13,338.9 2,516.9 16,650 13,632 109,167 -- -- 1,816.3 N/A 171
2010 13,712.4 2,604.2 16,502 13,305 105,327 -- -- 1,865.3 N/A 165
2011 14,164.9 2,701.9 16,651 13,411 107,749 -- -- 1,915.7 N/A 169
2012 14,745.7 2,803.5 16,867 13,613 110,443 -- -- 1,975.9 N/A 173
2013 15,424.0 2,920.2 17,137 13,817 113,867 -- -- 2,049.0 N/A 177
2014 16,102.7 3,040.9 17,480 14,093 118,991 -- -- 2,140.4 N/A 181
2015 16,730.7 3,137.3 17,847 14,347 123,379 -- -- 2,225.2 N/A 185
2016 17,098.7 3,252.0 18,257 14,662 126,957 -- -- 2,283.5 N/A 189
2017 17,799.8 3,319.5 18,750 15,014 131,522 -- -- 2,370.2 N/A 193
Sector Rank 46/119 42/119 46/119 41/119 44/119 N/A N/A 47/119 N/A N/A
Economy Rank 441/1149 571/1149 247/1148 239/1148 302/1149 N/A N/A 503/1149 N/A N/A
IVA/Revenue
(%)
Imports/
Demand
(%)
Exports/Revenue
(%)
Revenue per
Employee
($’000)
Wages/Revenue
(%)
Employees
per Est.
Average Wage
($)
Share of the
Economy
(%)
2003 19.42 N/A N/A 115.49 14.08 5.60 16,263.82 0.02
2004 19.00 N/A N/A 121.68 13.67 5.50 16,633.13 0.02
2005 18.10 N/A N/A 116.75 12.80 5.85 14,940.44 0.02
2006 19.54 N/A N/A 117.79 14.17 5.91 16,693.50 0.02
2007 18.65 N/A N/A 117.16 14.09 6.23 16,508.60 0.02
2008 18.44 N/A N/A 124.42 13.73 6.22 17,085.29 0.02
2009 18.87 N/A N/A 122.19 13.62 6.56 16,637.81 0.02
2010 18.99 N/A N/A 130.19 13.60 6.38 17,709.61 0.02
2011 19.07 N/A N/A 131.46 13.52 6.47 17,779.28 0.02
2012 19.01 N/A N/A 133.51 13.40 6.55 17,890.68 0.02
2013 18.93 N/A N/A 135.46 13.28 6.64 17,994.68 0.02
2014 18.88 N/A N/A 135.33 13.29 6.81 17,987.92 0.02
2015 18.75 N/A N/A 135.60 13.30 6.91 18,035.48 0.02
2016 19.02 N/A N/A 134.68 13.35 6.95 17,986.40 0.02
2017 18.65 N/A N/A 135.34 13.32 7.01 18,021.32 0.02
Sector Rank 49/119 N/A N/A 86/119 49/119 45/119 90/119 42/119
Economy Rank 937/1149 N/A N/A 845/1149 746/1149 802/1148 1043/1149 571/1149
Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.
Revenue
(%)
Industry
Value Added
(%)
Establish-
ments
(%)
Enterprises
(%)
Employment
(%)
Exports
(%)
Imports
(%)
Wages
(%)
Domestic
Demand
(%)
Number of Pets
- Cats and Dogs
(%)
2004 8.1 5.8 4.5 3.1 2.6 N/A N/A 4.9 N/A 7.0
2005 3.8 -1.1 1.6 1.9 8.2 N/A N/A -2.8 N/A 6.5
2006 3.8 12.1 1.9 0.5 2.9 N/A N/A 15.0 N/A -5.5
2007 7.9 3.0 3.0 1.7 8.5 N/A N/A 7.3 N/A 5.8
2008 2.9 1.8 -3.0 -4.7 -3.1 N/A N/A 0.3 N/A 1.2
2009 0.7 3.0 -2.7 -3.4 2.5 N/A N/A -0.1 N/A 3.6
2010 2.8 3.5 -0.9 -2.4 -3.5 N/A N/A 2.7 N/A -3.5
2011 3.3 3.8 0.9 0.8 2.3 N/A N/A 2.7 N/A 2.4
2012 4.1 3.8 1.3 1.5 2.5 N/A N/A 3.1 N/A 2.4
2013 4.6 4.2 1.6 1.5 3.1 N/A N/A 3.7 N/A 2.3
2014 4.4 4.1 2.0 2.0 4.5 N/A N/A 4.5 N/A 2.3
2015 3.9 3.2 2.1 1.8 3.7 N/A N/A 4.0 N/A 2.2
2016 2.2 3.7 2.3 2.2 2.9 N/A N/A 2.6 N/A 2.2
2017 4.1 2.1 2.7 2.4 3.6 N/A N/A 3.8 N/A 2.1
Sector Rank 44/119 58/119 64/119 52/119 40/119 N/A N/A 42/119 N/A N/A
Economy Rank 370/1149 481/1149 548/1148 425/1148 365/1149 N/A N/A 392/1149 N/A N/A
Annual Change
Key Ratios
Industry Data
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM Pet Stores in the US December 2012 33
Jargon & Glossary
BARRIERS TO ENTRY High barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITY Compares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICES The dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
“real” growth or decline in industry metrics. The inflation
adjustments in IBISWorld’s reports are made using the
US Bureau of Economic Analysis’ implicit GDP price
deflator.
DOMESTIC DEMAND Spending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENT The number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISE A division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENT The smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTS Total value of industry goods and services sold
by US companies to customers abroad.
IMPORTS Total value of industry goods and services
brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATION An indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE The total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA) The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industry’s contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADE The level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLE All industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT Businesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFIT IBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITY The level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.
WAGES The gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
Industry Jargon
IBISWorld Glossary
HUMANIZATION A trend where pet owners treat pets
as humans, providing them with services such as pet
hotels and grief counseling.
JUST-IN-TIME (JIT) A strategy implemented to
improve profitability by reducing inventory and
purchasing the raw materials that are needed for the
immediate term only.
PET BOARDING AND DAY-CARE Long- and short-term
options for owners who need assistance looking after
their pets. Services include feeding, walking, grooming
and lodging.
PET PARENTS Pet owners who are enthusiastic about
their pets and treat them as members of their family.
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