Packaged Facts estimates that retail sales of pet food/treats increased 8% to US$50 billion in 2021, on top of a COVID-19 pandemic-fueled increase of 15% in 2020. Price increases due to supply chain shortages factor into these gains.
With tech-, convenience- and safety-prioritizing shoppers shifting online, pet food sales through the internet are estimated at 36% of the total in 2021, factoring in pureplay online retailers (such as Amazon and Chewy) as well as the digital storefronts of traditionally brick-and-mortar-based retailers (such as Walmart.com or Petsmart.com).
Given the e-commerce juggernaut, “the digital storefronts of traditionally brick-and-mortar-based retailers” is morphing in the direction of “the digital operations of retailers formerly known as brick-and-mortar based.” In “U.S. Pet Market Focus: Pet Product Retail and Internet Shopping Trends (December 2021),” Packaged Facts projects that by 2025 e-commerce sales of pet food/treats will account for 54% of the total, with brick-and-mortar mass-market revenues at a 29% share and the brick-and-mortar pet specialty share at 11% (see Table 1).
Although e-commerce has fueled overall sales growth in pet food, internet gains by Chewy, Amazon, et al. have cannibalized brick-and-mortar sales to a degree. What remains to be seen: The degree to which the online operations of Petco, PetSmart, Walmart et al. can turn the tables on their pure play internet competitors, such that Peter can claim back some of the pet food sales volume robbed by Paul.
Although brick-and-mortar Walmart remains the kingpin by share of draw among pet food shoppers, the rise of online shopping for pet products has generally flattened customer base growth for all other retail players, as shown by MRI-Simmons data for the pre-COVID fall 2019 to after-COVID fall 2021 period. These data show the share of pet-owning households who at least partially bought pet food online nearly doubling from 16% as of fall 2019 to 29% as of fall 2021, with the largest gains posted in the initial COVID-19 impact period.
In aggregate, the percentage of pet food shoppers buying in supercenters/mass merchandisers notched down somewhat between fall 2019 and fall 2021. Even so, warehouse clubs — whose pet food market share is smaller but sturdier — bucked this larger mass-market trend.
In turn, the percentage of pet food shoppers buying in the pet specialty sector — at PetSmart, Petco, other pet chain stores or independents — generally remained flat as online pet food shopping increased in draw.
The rise of online shopping for pet products has not only tended to flatten customer base growth for other retail sectors, but also accounts for the most significant shifts in cross-channel shopping patterns for pet food. For example, the percent of pet specialty sector customers for pet food who also bought pet food online jumped from 18% to 30% over this period.
Cross-channel shopping trends favoring the internet also apply to mass-market pet food shoppers and to veterinary channel pet food customers. In contrast, the share of pet food shoppers buying both in the mass market and in the pet specialty sectors held steady.
Customer base gains for online pet food shopping between the fall 2019 and fall 2021 period are estimated at 9 million, with these gains coming primarily at the expense of the mass market.
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