The U.S. pet industry reached US$69.5 billion in spending in 2017, with pet food registering sales of US$29.07 billion, according to the American Pet Products Association. The two largest pet store chains, PetSmart and Petco, accounted for US$12.48 billion and are among the 100 largest retailers in the U.S. Which other large retailers contributed to pet product sales, and how much?
John Gibbons recently posted new data from Kantar Research and the National Retail Federation on those top 100 retailers, along with his own analysis, on PetBusinessProfessor.com. Though the data doesn’t break out pet product sales from the retailers’ overall sales, they do illustrate the high level that pets — and spending on them — have permeated just about every area of the economy.
In fact, Gibbons said 67 of those top 100 retailers sell pet products (57 in stores, 10 online), and their total sales exceed US$1,852 billion. “Pet products are an integral part of the strongest retailers and are widespread across the entire U.S. marketplace,” he wrote. “Of the top 100, 142,000 stores carry at least some pet items at retail.” Gibbons added that outside the top 100, more than 200,000 additional outlets sell pet products, including 20,000 grocery stores, 10,000 pet stores, 16,000 vet clinics, 5,000 pet service businesses and more. And that doesn’t even include the internet.
Of course, e-commerce factors significantly into pet food and other pet product sales. Besides their brick-and-mortar stores, PetSmart and Petco both have notable e-commerce components, particularly the former with its Chewy.com division. Thanks to that acquisition last year, PetSmart’s sales reached US$8.31 billion and rose 4.5 percent year over year, placing it at 58 on the top 100 list. Petco, however, barely made the list at number 100, with US$4.17 billion in sales and growth of only 0.9 percent.
Online giant Amazon ranked number three among U.S. retailers, with nearly US$103 billion in sales and 34 percent growth. Reports from One Click Retail showed that U.S. sales of pet consumables on Amazon reached US$1.4 billion in 2017; that includes dog and cat food plus other pet products.
We don’t know how much the other large retailers sell in terms of pet products — but we do know they sell lots of them. For example, Walmart, the largest retailer with US$374.8 billion sales, not only sells its own pet food lines but also many brands of pet food and other pet products. And 52 percent of rural pet owners report buying their pet foods at Walmart, according to Packaged Facts.
Kroger, the No. 2 retailer at US$115.89 billion, is the top supermarket chain of the 15 on the 100 list, representing a total of US$379 billion in sales; and as we know, they all sell pet products, including many pet food brands. The expansion of brands, product features and claims previously exclusive to the pet specialty channel — natural, grain free, holistic, limited ingredient, clean label, for starters — into supermarkets and other mass market retailers has been one of the most significant changes to hit the U.S. market for several years.
While perhaps not as disruptive as e-commerce, the “mass premiumization” of pet food has definitely had an impact on the U.S. market. In 2017, mass market retailers overall accounted for 54 percent of U.S. pet food sales, according to Euromonitor, and growth in that channel outstripped that in pet specialty for the first time in decades.
The pet specialty channel still plays a key role in the U.S. market and is especially very relevant and important to smaller pet food companies and brands. Yet it can’t be denied that in today’s economy, that channel is no longer the only place for pet owners to find premium and similar pet foods.
For example, farm and feed is another channel stepping up as a domain for pet food and other pet products. The lone retailer from that category making the top 100 list was Tractor Supply, checking in at number 63 (up a few places from 2016) with US$7.26 billion in sales and 7.1 percent growth. In addition to carrying a number of other brands, the retailer launched its own superpremium pet food line last year.