Petco and PetSmart Business Strategies

PetSmart and Petco are very similar to their retail pet store. Petco was first established in San Diego, California in 1965, and PetSmart appeared in Arizona in 1986 after 20 years. More than half of Pet Stores' industry revenue comes from two specialized retailers, PetSmart and Petco. Another part of the industry includes family-owned stores, small franchise stores, and small pet store chains. The pet shop industry continues to grow because discretionary household products and owners tend to treat pets like families.

There is a news that PetSmart is about to purchase Petco recently, so I think that it is interesting to look at these store portfolios and study the location analysis of this merger. According to the latest data of AggData, PetSmart has 1,440 stores and Petco has 1,292 stores (including 127 stores under the Petco brand Unleashed). Using Esri Business Analyst desktop GIS software, 62% of Petco's place was found to be within 10 minutes from PetSmart. In further examination, we found 2 PetSmart locations with 223 Petco locations (17%) within 1 mile of existing PetSmart, and 2 Petcos within 1 mile. Next, I analyzed 223 'overlapping' places in the trading area with a driving time of 10 minutes, examined Esri 's market potential data and looked at some interesting discoveries.

According to Packaged Facts, "Over the past few years PetSmart, Petco, Wal-Mart has caught up with online players through some acquisitions." Last year PetSmart bought Chewy.com as the largest e-commerce acquisition (from Wal-Mart We also earned with much more). Acquired Jet.com for $ 3.3 billion. This pattern may continue as traditional retailers enter the field of online shopping. To capture some e-commerce markets, large pet specialized stores and large merchants also offer online orders in combination with over-the-counter pickups. To make a difference, Petco and PetSmart are expanding their income sources through more pet care services, it is a space that e-commerce sites can not compete at least for now.

The two main advantages of pet shops are convenience and choice. Large-scale retailers such as Petsmart, Petco, Pet Supermarket and others have resources to purchase products collectively, so they can offer pet products and food to customers at various brands and prices. It provides one stop shopping for those who need to equip their new companion animal from scratch. From dog biscuits to seafood, these large retailers not only have more kinds of products but also are competitive prices. The ability to use credit card for shopping is also a great advantage.