PetSmart Competition
Now Viewing PetSmart's competition in: Pet Stores (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company’s customers? - The typical pet store customer is a family with children.
What types of marketing and promotion has the company found most effective? - Most companies use TV, print and radio advertising, direct mail, and newspaper inserts.
What does the company do to drive store traffic? - Pet stores will hold events like pet adoption drives to generate store traffic.
What problems does the company face regarding pet food pricing? - Mass merchandisers and warehouse clubs deeply discount pet food.
How does the company increase the average amount a customer spends? - Strong sales of products other than pet food are key to profitability.
Who are the company’s major competitors? - Pet stores compete with other pet stores, grocery stores, mass merchandisers, warehouse clubs, and Internet retailers.
What issues does Internet retailing present the company? - Large pet stores struggle to maintain profitable Internet operations, while small specialty stores may depend on the Internet.
Competitive Landscape
Pet ownership drives demand, and spending generally resists economic cycles. Profitability for individual companies depends on the ability to generate store traffic and effective merchandising. Large companies offer low prices and wide selections of both products and services. Small companies compete effectively by serving a local market, selling unique products, offering specialized services, or providing pet expertise. The industry is labor-intensive, with annual revenue per employee of about $100,000. Revenue per employee for small, independent pet stores is significantly lower than for major chains. Competitors include grocery stores, warehouse clubs, mass merchandisers, Internet retailers, and some veterinary clinics.
Business Challenges
CRITICAL ISSUES
Low Growth in Key Segments of Pet Ownership - Lack of growth in dog ownership will affect overall demand for pet supplies. Dogs drive pet food consumption, and dog owners spend more on supplies than any other pet owners. Increasing urbanization, while conducive to owning cats and fish, makes dog ownership difficult, and the number of households with children, the demographic most likely to own dogs, is expected to decline through 2010.
Slow Growth in Retail Prices - Industrywide discounting and growth of private-label products for dog and cat food have suppressed retail prices. Low-priced imports have driven overall retail prices down for pet accessories. Declining pet ownership and slow growth in retail pricing will eventually affect profitability.
Industries Where PetSmart Competes
- Consumer Products Manufacturers
- Pet Products(primary)
- Consumer Services
- Veterinary Care
- Retail
- Nonstore Retail
