As a savvy pet parent, you want to give your furry friend the very best while stretching your budget. PetSmart has long been a leader in the pet retail space, but it‘s far from the only store competing for your dollars. From specialty pet stores to e-commerce upstarts to mass merchants, the battle for pet retail supremacy is fiercer than ever. In this comprehensive guide, we‘ll take a deep dive into PetSmart‘s competitive landscape to help you make informed decisions as a shopper.
Petco: The Arch-Rival
When it comes to head-to-head competition, Petco is PetSmart‘s biggest rival. With over 1,500 locations and nearly $5 billion in 2021 revenue, Petco mirrors many of PetSmart‘s offerings across food, supplies, and services[^1]. Petco‘s points of differentiation include:
- Wellness focus: Petco has positioned itself as a health and wellness company, as evidenced by its "Whole Health Philosophy" of only selling foods that meet certain nutrition standards[^2]. It‘s also investing heavily in veterinary services with its growing network of in-store Vetco Total Care hospitals and clinics.
- E-commerce prowess: Petco has invested heavily in its digital capabilities, with a revamped website, app, and loyalty program. Digital sales surged 90% in Q2 2022 and now account for almost a third of Petco‘s total revenue[^3].
- Premium private labels: Petco has launched several premium private brands in recent years, such as Reddy (outdoor gear), Youly (fashionable accessories), and Whole Hearted (natural food), to capture higher margins and compete with specialty retailers.
Pet Supplies Plus: The Friendly Neighborhood Store
Pet Supplies Plus has been expanding rapidly, with over 600 stores across 39 states[^4]. While smaller than PetSmart and Petco, it differentiates itself as "America‘s Favorite Neighborhood Pet Store" with a focus on customer service, convenience, and community engagement. Key aspects of Pet Supplies Plus‘s strategy include:
- Carefully curated selection: Pet Supplies Plus stores are smaller than PetSmart and Petco, typically 6,000-8,000 square feet. But they offer a locally tailored assortment of natural foods and quality supplies at competitive prices.
- Omnichannel convenience: Almost all Pet Supplies Plus stores offer free curbside pickup, same-day delivery, online ordering, and auto-ship options. This seamless omnichannel experience helped drive 35% revenue growth to $1.4 billion in 2021[^4].
- Franchise focus: The vast majority of Pet Supplies Plus locations are franchised, which allows for local ownership, community involvement, and rapid expansion. The company aims to have 1,000 stores by 2025[^4].
Online Upstarts: Chewy, Petflow, and More
E-commerce has been the fastest-growing channel in pet retail, and several online specialists are giving PetSmart a run for its money. Chewy.com, which was acquired by PetSmart in 2017 and then spun off in 2020, is the 800-pound gorilla with over $2 billion in quarterly sales[^5]. Other notable online players include:
- Petflow: This e-tailer focuses on natural and organic foods with a subscription-based model. It offers a curated selection of over 10,000 products and partners with pet shelters and rescue organizations to drive brand purpose.
- PetMeds: As the leading online pet pharmacy, PetMeds offers a wide selection of prescription and over-the-counter medications, as well as health supplies and supplements. It serves over 10 million customers and did $300 million in sales in 2022[^6].
- Amazon: While not a pet specialist, Amazon is estimated to capture nearly a third of online pet product sales with its vast selection, competitive prices, and Prime shipping[^7]. Amazon‘s growing pet private label brands like Wag and Kitzy are also a threat.
The table below shows the estimated market share of the top pet e-commerce players:
| Company | U.S. online market share |
|---|---|
| Chewy | 41% |
| Amazon | 32% |
| PetMeds | 5% |
| Petco | 4% |
| PetSmart | 3% |
| Walmart | 2% |
| Petflow | 1% |
| Others | 12% |
Source: Edge by Ascential, 2022 [^7]
Mass Merchants: The Mighty Generalists
While PetSmart is a category killer, it also faces competition from big-box retailers and supermarkets that sell pet products alongside human goods. The top players include:
- Walmart: The retail giant carries over 1,800 pet brands and 30,000 pet products, both in-store and online[^8]. Walmart also uses pets as a traffic driver, with many stores featuring vet clinics, grooming salons, and adoption events.
- Target: The bullseye brand has been investing in its pet assortment, with private label brands like Boots & Barkley and Kindfull, as well as premium products and in-store displays. Target‘s 2022 sales in pet supplies and food rose 13% to over $2 billion[^9].
- Costco: The warehouse club is known for its Kirkland Signature pet foods, which offer quality at a value price. Costco also carries many branded pet products in bulk sizes, appealing to its affluent, high-spending members.
While these generalists don‘t specialize in pets, they benefit from their wide reach, one-stop shopping convenience, and ability to cross-sell pet products alongside human essentials.
Specialty and Regional Players
Rounding out the competitive set are specialty chains that focus on certain categories or geographies:
- Petland: This franchisor is known for selling live animals (primarily puppies) as well as supplies. It has over 130 stores and did $100 million in revenue in 2022[^10].
- Pet Supplies "R" Us: This Canadian chain has over 340 stores and $400 million in sales. It was acquired by Pet Valu in 2021[^11].
- Global Pet Foods: Another Canadian player with over 160 stores, Global focuses on holistic and natural foods with knowledgeable staff.
- Pet Supermarket: Operating in the Southeast, this chain combines neighborhood service with a wide selection across its 200 stores[^12].
While these players are smaller than PetSmart and Petco, they often have loyal customer bases and deep roots in their local markets.
The Competitive Outlook
The pet retail industry was a rare bright spot during the pandemic, as pet adoption surged and owners splurged on their furry friends. The U.S. pet industry grew 14% to $123 billion in 2021 and is forecast to reach $200 billion by 2025[^13]. But with growth comes competition, and PetSmart faces challenges on several fronts:
- E-commerce surge: Online pet product sales grew 35% in 2020 alone and now account for nearly a third of the market[^14]. This rapid shift has pressured PetSmart to invest in its digital capabilities to avoid losing share to the likes of Chewy and Amazon.
- Retail Darwinism: The retail sector has been reshaped by the pandemic, with many weaker players going extinct. This has benefited stronger competitors like PetSmart in the short term, but also raised the bar on omnichannel execution, differentiation, and efficiency.
- Veterinary consolidation: The growth of corporate vet practices and consolidators like Mars and JAB has made it harder for PetSmart‘s in-store Banfield clinics to gain share. This could hamper PetSmart‘s ability to offer an integrated health and wellness solution.
- Premium private label: Many of PetSmart‘s competitors are investing in premium private brands that compete directly with national brands on quality but at a lower price. As these brands gain traction, they could pressure PetSmart‘s margins and market share.
To stay top dog, PetSmart will need to continue innovating and differentiating itself while also executing at scale. This could include doubling down on services (vet care, grooming, training), expanding its premium private brands, and reimagining the store experience.
As for the competitive landscape, expect continued consolidation as the industry matures. "The pet retail pie is getting bigger, but the slices are getting thinner as more players enter the market and fight for share," said David Sprinkle, pet market research publisher at Packaged Facts[^15]. "Scale, omnichannel capabilities, and a strong value proposition will be key to survival and success."
What It Means for Pet Parents
For pet owners, the increasingly competitive landscape is a mixed blessing. On one hand, you have more choices than ever in where and how to shop for your pet‘s needs. Whether you prioritize price, selection, service, or convenience, there‘s a retailer out there for you. The growing onslaught of e-commerce options also makes it easier than ever to get your pet supplies delivered straight to your door.
On the flip side, the dizzying array of choices can be overwhelming, and not all products are created equal. As a pet parent, it‘s important to do your research, read labels carefully, and consult with your vet to ensure you‘re making the best choices for your pet‘s health and well-being. Beware of cheap, low-quality products that may be harmful or unsatisfying to your pet.
At the end of the day, the right retailer for you depends on your unique needs, preferences, and values. Whether you stick with PetSmart for its breadth of services or branch out to an e-commerce upstart like Chewy for its convenience and value, what matters most is keeping your pet happy, healthy, and loved.
"The pet retail landscape is more dynamic and competitive than ever," said Steve King, president of the American Pet Products Association[^16]. "But one thing all pet parents have in common is a desire to give their pets the best life possible. The retailers that keep this at the heart of their strategy will be the ones that win in the long run."
[^1]: Petco. (2023). https://investors.petco.com/news/news-details/2023/Petco-Reports-Strong-Fourth-Quarter-and-Fiscal-Year-2022-Results/default.aspx[^2]: Petco. (n.d.). Petco‘s Whole Health Philosophy. Retrieved June 2, 2023, from https://www.petco.com/whole-health
[^3]: Petco. (2023). https://investors.petco.com/news/news-details/2023/Petco-Reports-Strong-Fourth-Quarter-and-Fiscal-Year-2022-Results/default.aspx
[^4]: Pet Supplies Plus. (2023). Pet Supplies Plus Accelerates Growth to 800 Locations. https://www.petsuppliesplus.com/newsroom/pet-supplies-plus-accelerates-growth-to-800-locations
[^5]: Chewy. (2022). Chewy Announces First Quarter 2022 Financial Results. https://investor.chewy.com/news-and-events/news/news-details/2022/Chewy-Announces-First-Quarter-2022-Financial-Results/default.aspx
[^6]: PetMed Express. (2022). Annual Report 2022. https://www.1800petmeds.com/images/aboutus/PetMedExpressAnnualReport2022.pdf
[^7]: Edge by Ascential. (2022). Pet Retail Disruptors Report.
[^8]: Walmart. (n.d.). Pet Supplies. Retrieved June 2, 2023, from https://www.walmart.com/cp/pet-supplies/5440
[^9]: Target. (2023). Target Reports Fourth Quarter and Full-Year 2022 Results. https://investors.target.com/news-events-presentations/press-releases/Press-Release-Details/2023/Target-Reports-Fourth-Quarter-and-Full-Year-2022-Results/default.aspx
[^10]: Petland. (n.d.). About Petland. Retrieved June 2, 2023, from https://petland.com/about-petland/
[^11]: Pet Valu. (2021). Pet Valu Completes Acquisition of Pet Supplies Plus. https://www.newswire.ca/news-releases/pet-valu-completes-acquisition-of-pet-supplies-plus-896704116.html
[^12]: Pet Supermarket. (n.d.). About Us. Retrieved June 2, 2023, from https://www.petsupermarket.com/about-us/
[^13]: American Pet Products Association. (2023). Pet Industry Market Size, Trends & Ownership Statistics. https://www.americanpetproducts.org/press_industrytrends.asp
[^14]: Packaged Facts. (2021). U.S. Pet Market Focus: Pet Product Retail and Internet Shopping Trends. https://www.packagedfacts.com/Pet-Product-Retail-Internet-Shopping-Trends-14281252/
[^15]: Sprinkle, D. (2022). U.S. Pet Market Outlook, 2022-2023. Packaged Facts.
[^16]: American Pet Products Association. (2023). $136.8 Billion Total U.S. Pet Expenditures for 2022, APPA Estimates. https://www.americanpetproducts.org/press_releasedetail.asp?id=1217
