The "State of the Industry" report is part of Pet Product News International's annual Pet Industry Directory & Buying Guide, available to subscribers or for purchase. Some directory listings are available for free .
Though the economy was starting to show signs of softening a year ago, hardly anyone foresaw the huge crash coming in the fall. Now everyone is wondering if we're starting to recover from what we now know is a recession that began even earlier. More importantly for our industry: Will the pet market be able to stay above the fray?
Signs from the pet retail channel say yes. Though not quite as many US pet specialty retailers enjoyed increases in sales volume in 2008 vs. 2007, 42% of respondents to Pet Product News International's annual "State of the Industry" survey said their stores had increased sales last year, while 19% said their volume remained the same and 28% saw decreases.
Food gains US retail share
Even more encouraging for petfood, the survey showed dog food accounted for 29.7% of the 2008 average US store sales in dog products of US$183,000, an increase of 3.7% over 2007. (Dog products overall comprised 52.2% of the total US pet retail market in 2008.) Snacks and treats' share of the dog product total was 8.4%, a slight decrease (-1.4%) from 2007.
Cat food jumped to 43.8% of the cat product category, which averaged US$34,700 per US retailer in 2008; food's share of cat products in 2007 was 35%. Snacks/treats accounted for 5.5% of the category, up slightly from 5% in 2007.
Superstores up, too
The survey's 380 respondents represent the 6,100 independent
pet store owners and managers in the US who read Pet Product
News. What about the pet superstore chains?
PetSmart reported a net sales increase of 9.5%, to US$1.3 billion, in the first quarter of this year vs. the same period last year. Store sales grew 3.9% in the first quarter, and the company's stock was up 21%, according to BusinessWeek.
In a May article, the magazine quoted Deutsche Bank analyst Mike Baker, who cited one of PetSmart's advantages during a tough economy: the "need-based nature of petfood," which comprises more than half of the chain's business.
Current sales figures for Petco were not available at press time, but during Petfood Forum 2009, Rick Rockhill, VP of dog consumables, said the chain would have more than 1,000 stores open this year.
Europe also rises
Success in rising above the recession has not been limited to US pet retailers. The Germany-based Fressnapf chain, with more than 900 stores throughout Western Europe, increased sales 11.3% in the first quarter of 2009, with same-store sales growing 3.6%, according to www.pet-global.com .
In the United Kingdom, pet supplies chain Pets at Home reported a 14% sales increase for fiscal year 2008-2009 (ending March 26), to Â£404 million (US$669 million). Same-store sales rose 7.5% from the previous year, according to www.pet-global.com . The company attributed its gains partially to success with its private label products, including petfood lines Complete, Purely and Wainwrights. In all, Pets at Home introduced 208 new products in the past year and opened 19 new stores, for a total of 232 outlets.
Less developed markets for petfood, such as Eastern Europe, Asia-Pacific and Latin America, are also enjoying some success despite the economy. For example, www.pet-global.com reports that Avex Baumarkt, a German "do-it-yourself" and gardening retail chain that also stocks pet supplies, recently opened its first Czech store in Valmez, in the southeast part of the country.
All this is only good news for petfood and its continued growth.
In "New weapons against contaminants" in the June issue, the first sentence in the Del Monte case study section (p. 30) should have read: "At its Decatur, Alabama, USA, plant, petfood manufacturer Del Monte is using technology to monitor its manufacturing line for moisture."
The company does not use this or any technology to control bacteria and other contaminants, as the article read, nor was it meant to imply Del Monte has any problems with bacteria or other contaminants. Petfood Industry regrets the error.