Documente Academic
Documente Profesional
Documente Cultură
WWW.IBISWORLD.COM
Britanny Carter
15 International Trade
Industry Definition
16 Business Locations
Main Activities
Similar Industries
18 Competitive Landscape
29 Industry Data
Additional Resources
29 Annual Change
29 Key Ratios
3 Industry at a Glance
28 Industry Assistance
29 Key Statistics
4 Industry Performance
21 Barriers to Entry
Executive Summary
22 Industry Globalization
Current Performance
23 Major Companies
Industry Outlook
23 PetSmart Inc.
26 Operating Conditions
12 Supply Chains
26 Capital Intensity
13 Demand Determinants
27 Revenue Volatility
14 Major Markets
WWW.IBISWORLD.COM
Main Activities
Retailing pets
Retailing pet food and supplies
Providing pet grooming and boarding services
Similar Industries
Additional Resources
WWW.IBISWORLD.COM
Industry at a Glance
Pet Stores in 2016
Key Statistics
Snapshot
Revenue
Profit
Wages
Businesses
$18.5bn
4.3%
$1.4bn
$2.4bn
PetSmart Inc.
37.2%
% change
PETCO Animal
Supplies Inc.
23.3%
210
200
190
Millions
Market Share
2
0
-2
-4
Year 08
3.1%
13,324
180
170
160
10
Revenue
12
14
16
18
20
22
150
Year 06
08
10
12
14
16
18
20
Employment
SOURCE: WWW.IBISWORLD.COM
p. 23
9.0%
Number of pets
(cats and dogs)
4.7%
Live animals
Pet services
45.7%
Number of households
Pet food
40.6%
Pet supplies
p. 4
SOURCE:
WWW.IBISWORLD.COM
SOURCE:
WWW.IBISWORLD.COM
Industry Structure
Growth
Regulation Level
Medium
Low
Technology Change
Medium
Low
Barriers to Entry
Medium
Industry Assistance
None
Concentration Level
Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 29
Industry Globalization
Low
Competition Level
High
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Industry Performance
The
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Industry Performance
200
% change
190
Millions
180
170
-2
160
150
Year 06
08
10
12
14
16
18
20
-4
Year
09
11
13
15
17
19
21
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Performance
Industry revenue
8
6
% change
Current
Performance
4
2
0
Year 08
10
12
14
16
18
20
22
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Performance
Competition from
bigger stores
Supermarkets
have lured
customers away from
smaller specialty stores
bulk from wholesalers. Such cost savings
have lured in price-conscious consumers,
allowing larger stores to capture a higher
share of the market. Moreover, many
consumers have gravitated online to
purchase competitively priced products;
e-commerce stores can sell products at
lower prices while maintaining profit
margins because they do not maintain a
retail storefront and, therefore, avoid the
costly rental rates associated with
high-traffic retail space.
High-end goods are primarily sold
through specialty pet stores and other
niche retailers, providing a degree of
guaranteed sales for operators, shielding
them from direct competition. This is
because manufacturers typically place
restrictions on ultra-premium pet
products, selling them only to specialty
pet stores. Such restrictions have aided
niche retailers targeting the high-end
market over the past five years.
Big-box specialty stores, such as
PetSmart and Petco, combine the best of
both worlds; these stores offer a broad
selection of pet products and operate on a
scale large enough to pass cost savings
down to consumers. Furthermore, many
large stores also provide premium
products, a factor that has augmented
competition for small specialty stores. As
a result, big-box stores have posted
healthy gains over the five-year period,
increasing their share of the market.
WWW.IBISWORLD.COM
Industry Performance
Industry
Outlook
A
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Industry Performance
Changing
competition
Competition
from
supermarkets and mass
merchandisers is expected
to remain strong
product marketing will become
increasingly important as each operator
attempts to set itself apart from other
stores. For example, personalized diets
for pets are expected to serve as a
potential niche market for industry
operators, including special food catered
to obese animals Since many pet owners
have become concerned with their pets
health, the creation of options to improve
pet health presents a potential
opportunity for industry operators.
Several pet food manufacturers have
identified potential growth in customized
food options, taking into consideration
pet breeds, life stages, daily activities,
amount of time indoors and specific
medical conditions.
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Industry Performance
Life Cycle Stage
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
15
10
Quantity Growth
5
Pet Stores
Veterinary Services
Animal Food Production
Mail Order
-10
-10
Decline
-5
-5
10
Shrinking economic
importance
15
20
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Industry Performance
industry
is G
rowing
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Supply Chain
Consumers in the US
The Pet Stores industry relies on consumers to purchase pet products and to use industry
services.
31111
33993
54194
9.0%
Pet services
4.7%
Live animals
45.7%
Pet food
40.6%
Pet supplies
Total $18.5bn
Pet food
Since food is a necessity for all pets, it is
not surprising that pet foods make up the
largest product segment for the industry.
This segment covers a wide range of
products such as dry and wet food for
dogs and cats, bird feed, crickets and
worms for reptiles, and other treats and
supplements for a number of different
household pets. In the past five years,
retailers have increasingly provided
all-natural and organic food products.
These premium pet foods tend to be
higher priced with larger markups, a
factor which has benefited industry
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet supplies
Products in this segment include overthe-counter medicines, food bowls,
collars and leashes, pet clothing, brushes
and combs, shovels and scoopers, cat
litter, cages birds and reptiles, travel
carriers and any other various accessories
for pets. During the past five years, this
segments share of revenue has increased
largely due to rising spending on overthe-counter medicine products, totaling
at 40.6% of industry revenue. Spending
on pet medicine has increased due to the
soaring cost of pharmaceuticals, as well
as higher standards of routine care. Other
pet supplies and accessories sold by
industry retailers also face competition
from supermarkets and grocery stores,
namely because there are no regulations
that limit their sale. To this point, pet
supplies are being increasingly sold at a
variety of retail outlets such as home
improvements stores.
Services
Pet services have been the fastestgrowing product segment for the
industry over the past five years,
reaching an estimated 9.0% of the total
Demand
Determinants
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Demand
Determinants
continued
Major Markets
4.6%
Consumers aged
75 and older
11.4%
5.5%
Consumers
aged under 25
24.6%
Consumers aged 65 to 74
Consumers aged 45 to 54
15.7%
Consumers aged 25 to 34
21.6%
Consumers aged 55 to 64
16.6%
Total $18.5bn
Consumers aged 35 to 44
SOURCE: WWW.IBISWORLD.COM
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Major Markets
continued
International Trade
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West
New
England
AK
0.2
WA
Rocky
Mountains
ID
1.9
West NV
0.7
1.7
SD
0.2
WY
0.5
MN
0.2
0.3
OR
Great
Lakes
ND
MT
3.0
Plains
CO
0.6
KY
1.0
OK
0.8
NC
2.6
TN
AZ
NM
2.3
0.6
Southwest
TX
5.5
HI
0.4
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.3
1.5
0.8
3.5
2.2
0.5
SC
Southeast
0.5
MS
AL
0.9
1.2
GA
2.2
0.4
LA
0.9
FL
8.1
Establishments (%)
0.5
1.9
AR
0.3
1.5
13.0
WV VA
2.7
0.8
1.8
CA
West
3.9
MO
KS
2.5
OH
1.8
4.1
4.5
IN
IL
0.5
UT
PA
3.6
0.8
0.5
1 2
3
NY
7.6
5 4
MI
1.8
IA
NE
0.3
WI
ME
MidAtlantic
9 DC
0.1
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
SOURCE: WWW.IBISWORLD.COM
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20
West
The West has the second-highest
proportion of pet stores in the country;
the region is estimated to have 19.2% of
industry stores. California has the
highest number of pet stores in the
country at 13.0%. The primary reasons
for the higher-than-average number of
pet stores in the West are population
density and income levels. The West has
17.1% of the nations total population;
furthermore, both California and
Nevada have higher-than-average
median incomes by state.
Mid-Atlantic
The Mid-Atlantic region has an estimated
18.1% of pet stores. The most popular
states include New York and
Pennsylvania, which account for a
respective 7.6% and 4.5% of the
industrys locations. These states have
some of the highest populations in the
United States due to their large
10
Southwest
Southeast
Plains
New England
Rocky Mountains
Establishments
Mid-Atlantic
0
Great Lakes
Southeast
The Southeast holds the highest number
of industry establishments; 22.1% of pet
stores are estimated to be in the region.
The Southeast is the most populated
region of the United States with one
quarter of the nations population. Given
the higher proportion of households,
there is a greater demand for industry
retailers. Within the Southeast, Florida
has the highest number of pet stores, at
8.1% of the nations total.
West
Business Locations
Population
SOURCE: WWW.IBISWORLD.COM
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18
Competitive Landscape
industry is M
edium
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks
Profit
Industry profit, as measured by earnings
before interest and taxes, is expected to
grow to 7.7% of revenue in 2016, up from
6.5% in 2011. A growing pet population
and an increasing willingness of pet
owners to spend on their pets, particularly
on premium or high-margin products, has
driven this increase in profitability.
Furthermore, pet stores are increasingly
offering pet services, which typically have
higher margins. It is important to note,
however, that the actual level of margins
may vary considerably between industry
participants. For instance, larger players
such as PETCO and PetSmart typically
purchase in large quantities, which
Economies of scope
Successful operators need a range of the
most popular pets and pet supplies at
different levels of price and quality.
Offering a wider variety of products will
attract a larger customer base.
Effective quality control
Operators must ensure that pet services
are up to standards for each specific
animal and breed.
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19
Competitive Landscape
Industry Costs
(2016)
3.3
9.1
100
n Profit
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
7.7
13.2
80
Percentage of revenue
Cost Structure
Benchmarks
continued
60
71.4
67.9
40
20
0.8
4.6
9.3
1.5
1.1
0.7
7.8
1.6
SOURCE: WWW.IBISWORLD.COM
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20
Competitive Landscape
Cost Structure
Benchmarks
continued
Other costs
Rental and utilities costs are expected to
represent 7.8% of revenue. Operators incur
other expenses including administrative,
Basis of Competition
in
this industry is
Highand the trend
is I ncreasing
Internal
Pet stores compete with each other based
on price, product variety, customer
service, brand awareness, variety of pet
services and store location. Since product
purchases make up the majority of sales
for pet stores, their main basis of
competition is product range, quality and
price. Large players like PETCO and
PetSmart benefit from economies of
scope and are able to provide broad
ranges of pets, pet foods, pet supplies and
External
Historically, supermarkets have been the
primary sellers of pet food products.
Large supermarkets stock a wide variety
of pet food and supplies. Bulk purchases
by supermarkets generally enable them
to offer lower prices than specialty
retailers. In recent years, additional
competition has come from mass
merchandisers and discount retailers
such as Walmart and Costco that stock a
wide variety of products at competitive
prices. However, mass merchandisers
and discount retailers do not sell ultrapremium pet products because they are
limited by manufacturers restrictions.
Further competition comes from the
E-commerce and Online Auctions
industry (IBISWorld report 45411a) and
the Mail-Order industry (IBISWorld
WWW.IBISWORLD.COM
21
Competitive Landscape
Basis of Competition
continued
Barriers to Entry
High
Medium
Growth
Low
Medium
Medium
None
SOURCE: WWW.IBISWORLD.COM
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22
Competitive Landscape
Industry
Globalization
Level & Trend
lobalization
G
in this
industry is L owand
the trend is S
teady
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Major Companies
Major players
(Market share)
39.5%
Other
Player Performance
PetSmart Inc.
Market share: 37.2%
Since its establishment in 1987, Phoenixbased PetSmart Inc. has become the top
specialty retailer of pet food and supplies.
PetSmart operates 1,333 stores, typically
located in regional shopping centers near
other superstores and warehouse stores.
The company employs about 53,000
people in the United States and Canada.
By offering more than 11,000 pet
products and providing various pet
services, PetSmart aims to provide a
one-stop shopping experience. In March
2015, the company went private through
an $8.3 billion buyout by BC Partners.
PetSmart categorizes its merchandise
into three main categories: consumables,
hard goods and pets. Consumables include
pet foods, treats and litter, as well as
premium products, many of which are not
found in supermarkets or mass
merchandisers. Pet supplies, such as
collars, leashes, health and beauty aids,
shampoos, medication, toys, pet carriers,
SOURCE: WWW.IBISWORLD.COM
(% change)
Operating Income
($ million)
(% change)
2011-12
5,800.0
N/C
475.8
N/C
2012-13
6,400.0
10.3
616.7
29.6
2013-14
6,543.1
2.2
655.9
6.4
2014-15
6,653.7
1.7
668.2
1.9
2015-16
6,962.6
4.6
755.5
13.1
2016-17
7,171.7
3.0
749.2
-0.8
Year**
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Major Companies
Player Performance
continued
Player Performance
PETCO Animal
Supplies Inc.
Market share: 23.3%
Revenue
($ million)
(% change)
Operating Income
($ million)
(% change)
2011-12
3,070.8
8.1
223.8
27.7
2012-13
3,457.5
12.6
281.5
25.8
2013-14
3,720.4
7.6
293.2
4.1
2014-15
3,927.1
5.6
275.7
-6.0
2015-16
4,208.3
7.2
306.2
11.1
2016-17
4,494.6
6.8
332.3
8.5
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Major Companies
Player Performance
continued
Financial performance
IBISWorld estimates that over the five
years to fiscal 2017, the companys US
revenue generated from brick-andmortar stores will rise at an annualized
rate of 7.9% to $4.5 billion. Strong sales
of premium products have been one of
the companys main drivers of growth.
PETCO invested heavily in this product
segment amid the recession when it
launched Unleashed, a specialty store
for premium, natural, organic and raw
pet foods.
Other Companies
WWW.IBISWORLD.COM
Operating Conditions
of capital
intensity is L ow
Capital intensity
Economy
Retail Trade
Pet Stores
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Capital Intensive
Labor Intensive
Pet Stores
Veterinary Services
Mail Order
Toy, Doll & Game Manufacturing
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity
continued
Technology & Systems During the past five years, there have
of
Technology Change
is M
edium
Revenue Volatility
Level
The level
of
Volatility is L ow
Volatility vs Growth
1000
Level
The level
Hazardous
Rollercoaster
100
10
Pet Stores
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
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Operating Conditions
Revenue Volatility
continued
Regulation is
Mediumand the
trend is S
teady
Industry Assistance
Level & Trend
he level of
T
Industry Assistance
is N
oneand the
trend is S
teady
WWW.IBISWORLD.COM
29
Key Statistics
Industry Data
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Sector Rank
Economy Rank
Revenue
($m)
13,556.1
14,053.0
14,148.6
14,479.0
14,982.8
15,975.8
16,454.7
17,046.6
17,729.1
18,528.2
19,287.9
19,928.2
20,486.2
21,043.4
21,575.8
39/63
465/1370
Annual Change
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Sector Rank
Economy Rank
Revenue
(%)
3.7
0.7
2.3
3.5
6.6
3.0
3.6
4.0
4.5
4.1
3.3
2.8
2.7
2.5
9/63
324/1370
Key Ratios
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Sector Rank
Economy Rank
IVA/Revenue
(%)
20.14
22.56
19.33
19.21
21.32
22.84
21.63
21.33
21.93
21.97
21.93
21.83
21.74
21.73
21.65
13/63
984/1370
Industry
Value Added
($m)
2,730.1
3,170.2
2,734.5
2,780.7
3,193.6
3,649.0
3,558.5
3,636.6
3,887.2
4,070.5
4,230.8
4,351.0
4,454.5
4,572.0
4,671.1
35/63
553/1370
Establishments
17,644
17,110
16,650
16,502
16,345
16,810
16,715
17,012
17,323
17,872
18,295
18,559
18,846
19,116
19,386
41/63
318/1370
Enterprises Employment
14,804
109,802
14,115
106,912
13,632
109,595
13,305
106,103
13,064
107,454
13,212
110,294
12,938
112,982
13,030
116,867
13,081
117,373
13,324
120,973
13,459
125,241
13,459
127,611
13,497
129,927
13,509
132,745
13,516
135,183
39/63
37/63
331/1370
327/1370
Industry
Value Added
(%)
16.1
-13.7
1.7
14.8
14.3
-2.5
2.2
6.9
4.7
3.9
2.8
2.4
2.6
2.2
5/63
321/1370
Establishments
(%)
-3.0
-2.7
-0.9
-1.0
2.8
-0.6
1.8
1.8
3.2
2.4
1.4
1.5
1.4
1.4
6/63
303/1370
Enterprises Employment
(%)
(%)
-4.7
-2.6
-3.4
2.5
-2.4
-3.2
-1.8
1.3
1.1
2.6
-2.1
2.4
0.7
3.4
0.4
0.4
1.9
3.1
1.0
3.5
0.0
1.9
0.3
1.8
0.1
2.2
0.1
1.8
10/63
11/63
513/1370
374/1370
Imports/
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Exports/
Revenue
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Revenue per
Employee
($000)
123.46
131.44
129.10
136.46
139.43
144.85
145.64
145.86
151.05
153.16
154.01
156.16
157.67
158.52
159.60
45/63
965/1370
Exports
---------------N/A
N/A
Exports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Wages/Revenue
(%)
14.09
14.18
14.04
13.90
13.76
13.79
13.39
13.30
13.33
13.17
13.10
12.96
12.83
12.77
12.66
21/63
908/1370
Imports
---------------N/A
N/A
Wages
($m)
1,910.1
1,992.4
1,985.9
2,012.0
2,061.2
2,203.5
2,203.8
2,267.5
2,363.6
2,440.0
2,526.1
2,582.0
2,627.9
2,687.6
2,730.5
38/63
544/1370
Imports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Employees
per Est.
6.22
6.25
6.58
6.43
6.57
6.56
6.76
6.87
6.78
6.77
6.85
6.88
6.89
6.94
6.97
18/63
879/1370
Wages
(%)
4.3
-0.3
1.3
2.4
6.9
0.0
2.9
4.2
3.2
3.5
2.2
1.8
2.3
1.6
13/63
463/1370
Number of pets
Domestic - cats and dogs
Demand
(Mils)
N/A
163.0
N/A
165.0
N/A
171.0
N/A
164.6
N/A
168.7
N/A
173.1
N/A
177.3
N/A
181.3
N/A
185.1
N/A
188.6
N/A
192.1
N/A
195.8
N/A
199.5
N/A
203.3
N/A
206.4
N/A
N/A
N/A
N/A
Average Wage
($)
17,395.86
18,635.89
18,120.35
18,962.71
19,182.16
19,978.42
19,505.76
19,402.40
20,137.51
20,169.79
20,169.91
20,233.37
20,225.97
20,246.34
20,198.55
38/63
1209/1370
Share of the
Economy
(%)
0.02
0.02
0.02
0.02
0.02
0.02
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SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Industry Jargon
IBISWorld Glossary
WWW.IBISWORLD.COM
IBISWorld Glossary
continued
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