Archive for category: Pet Market Distribution Channels

The Retail market hit bottom in April 2020 then began its recovery. The journey has been long and complex and Consumer spending behavior continues to evolve. Amazingly, we have not beaten the virus yet so we will continue to track any impact on the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We begin Final Retail Report for November and then move to the Advance Report for December, giving us a first look at year-end 2021. The retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress of the retail market to a full recovery.

Both reports include the following:

• Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
• Individual Channel Data – This will be more detailed in the “Final” reports, and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the November Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January/February but set a new $ records in March and then again in May. Sales declined through September but turned up again in October & November. Here are the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The final total is $0.6B more than the Advance report projected a month ago. 2 groups were up and 2 were down. The specifics were: Auto: +$0.8B; Gas Stations: +$0.2B; Restaurants: -$0.2B; Relevant Retail: -$0.1B. Sales vs October were down for all groups but Relevant Retail. Total Retail $ales broke $600B for the 1st time in December. November $ales beat that number and in fact, set a new all time record. Auto continues to have the strongest recovery with an annual YTD growth rate since 2019 of +11.4%. A $ dip in November is normal for all but Relevant Retail as we start the holiday season. Importantly, for the 6th consecutive month, all groups were positive in all measurements vs 2020 or 2019.

Now, let’s see how some Key Pet Relevant channels were doing in November.

• Overall – 4 were down vs last month. Drug & Supermarket drops were minor while the Farm dip was normal. Office/Gift/Souvenir $ were down vs October & YTD vs 2019. November set a new $ record for Relevant Retail.
• Building Material Stores – Their amazing lift has slowed as we move into winter. The surge came from pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed in 2021 but Building and Farm stores are still going strong. Sporting Goods stores have a similar pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. $ slowed a little through October but set a new record in November. YTD they are +47.6% vs 2019, a Growth Rate of 21.5%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are down vs October but +7.3% vs November 2020. YTD $ are on par with the 2020 binge and +15.5% vs 2019. Drug Stores were +$17B (+5.7%) for 2020. They had a record March. Sales have been relatively stable since then. Their YTD $ are +7.4%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. Monthly sales by channel have been up or down since then but GM set a new non-December sales record in November. Clubs/SuprCtrs & $ Stores are leading the way with a combined annual growth rate of +8.9%. These channels promote value. Their success reinforces its consumer importance. Disc. Dept. Strs again show all positive numbers, growing at 4.9%.
• Office, Gift & Souvenir Stores– $ are down sharply from October (normal) but were +24.3% vs November 2020. COVID hit them hard. They are still down YTD vs 2019 but getting a little better. Recovery will take more time.
• Internet/Mail Order – Their sales were +19.3% from October as we move into the holidays. Their COVID fueled growth continues. In November 2019, their avg annual growth rate was +12.9%. Now, it is +19.6% – up 51.9%
• A/O Miscellaneous – This is a group of specialty retailers – chains and indies. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 sales were up +12.1%. November 2021 was their 7^th consecutive month over $10B and set a new record, $11.0B. YTD $ are +27.5% vs 2020 and +41.0% vs 2019. Avg Growth: 18.7% – 3rd Best

Relevant Retail began recovery in May and hit record $ in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. November $ set a record and all channels but 1 are ahead of all 2020 & 2019 $. The big drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, the Advance numbers for December.

2020 was a memorable year. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record. April sales were down slightly but they spiked again in May to set yet another spending record. June>Sept $ fell but then came back in October>December. November & December set new records with December reaching $715B. Only Gas Stations were down vs November, but all were positive in all other measurements for the 7th straight month. 2021 is also memorable. All big groups set $ records. Total Retail broke the $7T barrier and Relevant Retail passed $4T. Other areas of the economy are still suffering and inflation has become a bigger factor in increases. However, consumers continue to spend “big bucks”, especially in Relevant Retail, and the overall Retail market continues its strong recovery.

Total Retail – In March and May Total Retail set new sales records. From June>Sept sales dipped slightly. October through year-end saw a resurgence with November & December setting all time records. December $ reached $715B and 2021 numbers totaled $7.4T, both barrier breakers. Sales finished +19.3% vs 2020 with an average annual sales growth rate since 2019 of 9.5%. The previous highest growth rate ever in records going back to 1992 was 8.23% in 1993>1994. More History: Sales fell in both 2008 & 2009. Total drop: -8.4%. Recovery took 2 years. 2010 & 2011. Total increase was +13.1%. Net increase 2007>2011: +3.6%. Avg Growth: +0.9%. Inflation Note: Retail $ were +16.9% vs December 2020. Inflation was +7.0% so up to 41% of the lift came from higher prices. The “Real” increase was +9.9%. In December 2019 (pre-pandemic), Retail $ were +5.5% over 2018. Inflation was 2.3%, 42% of the lift. The “Real” increase was +3.2%. Long term, strong inflation can slow spending but right now, Retail is far outperforming pre-COVID 2019.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 7 straight months. February 2020 YTD sales were up 8.1% vs 2019. In March Restaurants started to close or cease in person dining and sales fell -$33.3B (-52.5%) vs 2019. Sales hit bottom in April at $30.1B, the lowest April $ since 2003. Sales started to slowly increase in May but never reached a level higher than 88% vs the previous year. 2021 started off slowly. Through February, YTD sales were -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and hit a record $76.5B in July. 7 of the last 8 months in 2021 exceeded $70B which produced a record year, $821B. +32.1% vs 2020 and +6.1% vs 2019. Avg Growth since 2019 = +3.0%

Auto (Motor Vehicle & Parts Dealers) – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in a record March and slowed only slightly from April>December as sales exceeded $119.8B in all 10 months – the 10 biggest months in history. Their campaign was amazingly effective in recovering the business in 2020 and generated a record $1.54T in 2021, up 23.6% vs 2020. Their Year-end Avg Annual Growth Since 2019 = +11.4% – the best performance of any big group.

Gas Stations – Gas Station $ales have been mixed. If you drive less, you need less gas. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow to a record level in July. They fell in Aug/Sept but reached a record $55.3B in October. Sales fell in Nov/Dec, but they have been positive in all measurements vs 2019 & 2020 since March. This produced a record $588B for 2021, +36.6%. However, inflation comes to the forefront in this channel. Gas prices can be volatile. They dipped in the first 2 months of the pandemic but returned to more normal levels for the balance of 2020. Strong inflation began in 2021. In fact, December prices were 49.6% above 2020. That means that the 41.4% year over year $ lift in December was actually a decrease in the amount of gas sold. Year-end Growth Rate Since 2019 = +7.1%

Relevant Retail – Less Auto, Gas and Restaurants – This is considered the “core” of U.S. retail and traditionally accounts for about 60+% of Total Retail Spending. In looking at the individual channels in this group, we have seen a variety of results due to many factors, like non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December. They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February 2021 but set monthly records. In March they turned sharply up and then began an up/down $ roller coaster ride. Sales turned up in October and set a record in November which was blown away by $461B in December. March>December are 10 of the 12 highest $ months of all time and helped generate a record $4.47T in 2021, +14.1%. Relevant Retail has exceeded $361B in monthly sales 12 times. 11 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 is +10.5%. The recovery has become widespread as all channels have been positive in all measurements vs both 2020 and 2019 for 5 consecutive months. The primary recovery drivers were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a never ending “spring lift” from Hardware/Farm and Sporting Goods and growing help from Miscellaneous Stores (includes Pet).

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. December $ were up 13.3% from November and an increase occurred in 12 of 13 channels. Remember, the groups in the chart are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in 12 of 13 channels were up vs November but all were up vs December 2020, vs December 2019 and YE (Year-end) vs 2020 and 2019. (Relevant Retail Avg Annual Growth Rate since 2019 = +10.5%)

After hitting bottom in April 2020, Relevant Retail has beat the previous year’s $ for 20 consecutive months. They set an all-time record of $406.8B in December and finished 2020 +$260B vs 2019. 2021 was even stronger with record sales in every month and a new all-time record of $461.0B in December & YE: $4.47T. Essential channels were consistent drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ have come back but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift may be ending but consumers are still focused on their homes.
• SuperCtrs/Club/Value/$ Strs – They kept the GM channel strongly positive. Value is still a big consumer priority.

Regarding the Individual Large Channels (Includes YE Actual increase vs 2020 & Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales increased for all channels vs November and all other numbers were also positive. Even Department Stores $ are growing increasingly positive. After dipping to +7.5% in February, the avg growth rate by Club/SuperCtr/$ stores has stabilized at about 8.9% ever since. These stores are still the key to this channel.

• All GM: +12.1%, Avg = +7.6%; Dept Stores: 21.7%, Avg = +1.5%; Club/SuprCtr/$: +10.2%, Avg = +8.9%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In Jun>Dec they beat 2020 $. Health/Personal Care finished 2020 at +1.8% but 2021 has been better. December was up 15.1% from November and YE $ are +9.5%% vs 2020 and +11.4% vs 2019.

• Food & Bev: +4.2%, Avg = +7.9%; Grocery: +3.7%, Avg = +7.6%; Health/Drug Stores: +9.5%, Avg = +5.6%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > Dec have been spectacular for all these channels. The increase in Clothing vs November was an incredible +41.0%. All were up vs last month, remained positive in all measurements vs 2020 or 2019 for the 10th consecutive month and ended 2021 at least 25% ahead of 2020.

• Clothing: +48.4%, Avg = +6.2%; Electronic/Appliance: +25.2%, Avg = +3.0%; Furniture: +26.4%, Avg = +10.1%

Building Material, Farm & Garden & Hardware – The lift that began in 2020 has slowed but they have benefited from consumers focusing on their home needs. They ended 2020 +53B (+14.3%). Sales took off in March, set a record in April, but have slowed and stabilized around $39B, including the only Nov>Dec channel $ drop. 2021: +13.5%. Avg = +13.9%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +7.0% vs 2019. The growth accelerated in 2021 ending with a huge lift in December, up 30.7% from November to $13.5B, by far their biggest month ever. At year-end they were +28.6%. Avg Annual Growth = +17.3%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 +$1.2B, +0.9%. In March 2021 sales took off and reached the $14+B level in May. They have stayed there and set a record of $15.3B in October. Sales spiked spectacularly in December, setting a new monthly record of $17.1. At  year-end they were +27.3% with an Avg Growth = +13.3% (4^th Best). Their recovery is very real.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance made them the largest channel and every month in 2021 has produced record $. December set a new all-time monthly record of $115.4B and Year-end 2021 $ exceeded $1 Trillion, +13.6%. Avg Annual Growth= +17.4%

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – 2020 was quite a year. April & May had the 2 biggest YOY sales decreases in history while December sales broke $600B for the first time. 2021 may be even more memorable. With a strong December, Total Retail and all major groups had a record year. Total Retail broke $7T for the 1^st time. The Relevant Retail group began their recovery in May 2020 and kept Total Retail positive in 2020. They continued to grow in 2021 to a record $4.47T. The recovery was widespread. A few small channels are still struggling but all groups in the December chart, but Dept & Electronics Stores set sales records in 2021. FYI: Nonstore reached $1 Trillion and is the largest channel for the second consecutive year, with 23.5% of Relevant Retail $. The Holiday season also set records. It likely began early with a record October but Nov/Dec still “rule”. In 2021, Nov/Dec Relevant Retail $ were a record $868B, +14.0% from 2020. Some Services Outlets are still suffering but almost all Retail Channels have recovered. While some Consumer retail spending behaviors may have changed, the U.S. Retail Market is the strongest in history.

The Retail market hit bottom in April 2020 then began its recovery. The journey has been long and complex and Consumer spending behavior continues to evolve. We have not beaten the virus yet so we will continue to track the ongoing recovery of the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We will begin with the Final Retail Report for October and then move to the Advance Report for November. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

• Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
• Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the October Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January/February but set a new $ records in March and then again in May. Sales declined through September but turned up in October. Here are the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The final total is $0.7B less than the Advance report projected a month ago. All groups but Restaurants were down slightly. The specifics were: Relevant Retail: -$0.8B; Gas Stations: -$0.1B; Auto: -$0.3B; Restaurants: +$0.5B. Sales vs September were up in all groups. Total Retail $ales broke $600B for the 1st time in December. October sales beat that number and in fact were the 4^th highest of all time. Auto continues to have the strongest recovery with an annual YTD growth rate since 2019 of +11.6%. While a spending dip in September is the “norm” in U.S. Retail, so is an October rebound. Importantly, for the 5th consecutive month, all groups were positive in all measurements vs 2020 or 2019.

Now, let’s see how some Key Pet Relevant channels were doing in October.

• Overall – No channels were down vs last month, a big change from 10 in September. In fact, the only negative was Office/Gift/Souvenir YTD $ vs 2019. October was the 2nd biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift has slowed a little. The surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed in 2021 but Building and Farm stores are still going strong. Sporting Goods stores have a similar pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. $ slowed but have now stabilized after a big drop in September. YTD they are +47.4% vs 2019, a Growth Rate of 21.4%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are up vs September and +8.3% vs October 2020. YTD $ are on par with the 2020 binge and +15.4% vs 2019. Drug Stores were +$17B (+5.7%) for 2020. They had a record March. Sales have been relatively stable since then. Their YTD $ are +7.2%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. Monthly sales by channel have been up or down since then but all were strong in October, +10.1% vs September. Clubs/SuprCtrs & $ Stores are leading the way with a combined annual growth rate of +8.9%. These channels promote value. Their success reinforces its importance to consumers. Disc. Dept. Strs are now rebounding with all positive numbers.
• Office, Gift & Souvenir Stores– $ are up from September and were +15.1% vs October 2020. The pandemic hit them hard. They are still down YTD vs 2019. Recovery will take more time, but their situation is improving.
• Internet/Mail Order – Their sales rebounded after dipping in September. The pandemic continues to fuel this channel’s growth. In October 2019, their avg annual growth rate was +14.1%. Now, it is +19.4% – up 37.6%
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 sales were up +12.1%. October 2021 was their 6^th consecutive month over $10B and their 2^nd biggest month ever. YTD $ are +27.4% vs 2020 and +40.9% vs 2019.

Relevant Retail began recovery in May and set a $ record in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. October $ were up for all and all but 1 channel are ahead of all 2020 & 2019 $. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, the Advance numbers for November.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $643.1B. June>Sept $ fell but then came back in October & November with November setting a new record of $649.3B. Only Relevant Retail was up vs October, but all were positive in all other measurements for the 6th straight month. Some other areas of the economy are still suffering, some spending behavior has changed, and inflation has become a bigger factor in increases. However, consumers continue to spend “big bucks”, especially in Relevant Retail, and the overall Retail marketplace continues its strong recovery.

Total Retail – In March and then in May Total Retail set new sales records. From June>Sept sales dipped slightly but stayed above $600B. October brought a resurgence and in November sales continued to grow, setting another all time record with monthly sales of $649.3B. Relevant Retail deserves most of the credit for the record as sales for the other groups were down vs October. The current YTD average annual sales growth rate since 2019 for Total Retail is 9.4%, the highest ever in records going back to 1992. Inflation Note: Retail $ were +19.5% vs November 2020. Inflation was +6.8% so up to 35% of the lift came just from higher prices. The “Real” increase was +12.7%. In November 2019 (pre-pandemic) Retail $ were +2.6% over 2018. Inflation was 2.0%, 78% of the lift. The “Real” increase was +0.6%. Long term, strong inflation can slow spending but right now, Retail is far outperforming pre-COVID 2019.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 6 straight months. February 2020 YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1B, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily from April through July. Sales dipped in August/September came back strong in October then fell in November. YTD their $ are +31.7% vs 2020 and +5.2% vs 2019. Their recovery is getting stronger.

Auto (Motor Vehicle & Parts Dealers) – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and has slowed only slightly from April>November as sales exceeded $119.8B in all 9 months – the 9 biggest months in history. To show the effectiveness of their campaign, just look at the data. This group has exceeded $110B in monthly sales only 18 times in history. 15 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +11.3% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow to a record level in July. They fell in Aug/Sept but hit a record $55.3B in October. Sales fell in November, but they have been positive in all measurements vs 2019 & 2020 since March. Their comeback continues but inflation comes to the forefront in this channel. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but returned to more normal levels for the balance of 2020. Strong inflation began in 2021. In fact, November prices were 58.1% above 2020. That means that the 53.0% year over year $ lift in November was actually a decrease in the amount of gas sold. YTD Annual Growth Rate Since 2019 = +6.6%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. In looking at the individual channels in this group, we have seen a variety of results due to many factors, like non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December. They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February 2021 but set monthly records. In March they turned sharply up and then began an up/down $ roller coaster ride. In October they reached the 2^nd highest amount on record but November took over the top spot with $407.1B. March>November are 9 of the 11 highest $ months of all time. Relevant Retail has exceeded $361B in monthly sales 11 times in history. 10 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 is +10.5%. The recovery has become widespread as all channels have been positive in all measurements vs both 2020 and 2019 for 4 consecutive months. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a seemingly never ending  2020 “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. November $ were up 7.4% from October and an increase occurred in 9 of 13 channels. Remember, the groups in the chart are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in 9 of 13 channels were up vs October but all were up vs November 2020, vs November 2019 and YTD vs 2020 and 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.5%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 19 consecutive months. The group set an all-time record of $406.8B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month, including a new all-time record of $407.1B in November. Essential channels are still the big drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift may be ending but consumers are still focused on their homes.
• SuperCtrs/Club/Value/$ Strs – They kept the GM channel strongly positive. Value is still a big consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales increased for all channels vs October and all other numbers were also positive. Even Department Stores $ are growing increasingly positive. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores has stabilized at about 8.8% ever since. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +7.6%; Dept Stores = +1.7%; Club/SuprCtr/$ = +8.9%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In Jun>Nov they beat 2020 $. Health/Personal Care finished 2020 at +1.8% but 2021 has been better. November was down 2.7% from October but YTD $ are +9.4%% vs 2020 and +10.8% vs 2019.

• YTD Avg Annual Growth: Grocery = +7.5%; Health/Drug Stores = +5.3%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > Nov have been spectacular for all these channels. The increase in Clothing vs November 2020 was less than usual but was still +35.3%. All were up vs October and also remained positive in all measurements vs 2020 or 2019 for the 9th consecutive month.

• YTD Avg Annual Growth: Clothing = +5.6%; Electronic/Appliance = +3.6%; Furniture = +10.1%

Building Material, Farm & Garden & Hardware – Their “Spring” lift which began in 2020 has slowed but they have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April, but have since slowed and stabilized. They are still +13.4% YTD. Avg Annual Growth = +13.6%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021 with a strong spike in November, up 15.8% from October to $10.2B, the 2^nd biggest month ever. November YTD they are +29.9% vs 2020. Avg Annual Growth = +17.1%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 -$1.0B, -0.7%. In March 2021 sales took off and reached the $14+B level in May. They have stayed there and set a record of $15.3B in October. Sales fell to $15.0B in November, but it is still #2 of all time. YTD sales are now +27.5% vs 2020 +26.9% vs 2019. Their recovery is very real. YTD Avg Annual Growth = +12.7% (4^th Best)

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance beat the 12.9% increase in 2019 and every month in 2021 has produced record $. November was +19.9% vs October and set a new record of $105.4B. YTD $ are +14.4%. YTD Avg Annual Growth= +18.1%

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. November set a new $ record. Mar>Nov are 9 of the 10 biggest $ months in history with the 9 largest year over year sales increases ever. The total increase was +$1.05T, which is over 6 times the -$174B decrease from March>May 2020 which caused so much concern. At yearend 2020, Restaurants and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but they still led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has been even better. In Jun>Nov all major groups were positive vs both 2020 and 2019. The recovery has also become real for virtually all channels and monthly sales continue to set records. In fact, the current annual growth rates of +9.4% for Total retail and +10.5% for Relevant Retail are the best ever. Retail has recovered and continues to grow but we’ll keep checking.

In May 2020, the Retail market began its recovery after hitting bottom in April. The road back has been long and complex and Consumer spending behavior continues to evolve. We have not beaten the virus yet so we will continue to track the ongoing recovery of the retail marketplace with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – about 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

We will begin with the Final Retail Report for August and then move to the Advance Report for September. Remember, the retail impact of the pandemic began in March 2020, peaked in April, then recovery started in May. We will compare 2021 to both 2020 and 2019 to document the progress that the retail market has made towards a full recovery.

Both reports include the following:

• Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
• Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

• Current Month change – % & $ vs previous month
• Current Month change – % & $ vs same month in 2020 and 2019
• Current YTD change – % & $ vs 2020 and 2019
• Monthly and Year To Date $ will also be shown for each group/channel

First, the August Final. Retail hit bottom in April 2020 but began recovery, hitting record $ in December. $ fell in January & February but set a new all time $ record in March. In April $ fell but they rebounded in May to another record high. Sales have slowly declined through August. Here are the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The final total is $2.0B more than the Advance report projected a month ago. All groups were up slightly. The specifics were: Relevant Retail: +$0.7B; Gas Stations: +$0.6B; Auto: +$0.4B: Restaurants: +$0.3B. Sales vs July were down in all but Relevant Retail. Total Retail $ were the 8th highest month of all time. Total $ales broke $600B for the 1st time in December and has now done it 8 times. Auto still has the strongest recovery and is in fact prospering – annual YTD growth rate since 2019 is +11.9%. There were spending dips vs the previous month but for the third consecutive month, all groups were positive in all other measurements.

Now, let’s see how some Key Pet Relevant channels were doing in August.

• Overall– 5 of 11 channels were down vs July but all were up vs August 2020 and 10 vs August 2019. In YTD $, all were up vs 2020 and 10 vs 2019. August was the 4th biggest month in history for Relevant Retail.
• Building Material Stores – Their amazing lift may finally be slowing. The surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. Their Spring lift has slowed in 2021 but Building and Farm stores are still going strong. Sporting Goods stores have a similar spending pattern. Sales took off in May 2020, hit a record peak in December and continued strong into 2021, peaking in March. After slowing in July, the $ increased in August. YTD they are +47.4% vs 2019, an Annual Growth Rate of 21.4%!
• Food & Drug – Supermarkets were +$77.7B in 2020. $ are down vs July but YTD are on par with the 2020 binge. They are up 14% vs August 2019 and 14.3% vs YTD 2019. Drug Stores were +$17B (+5.7%) for 2020. They had a record March. Sales have been stable since then, but all other measurements are positive and YTD $ are +7.6%.
• General Merchandise Stores – $ in all channels fell in Jan & Feb then spiked in March. Monthly sales by channel have been slightly up or down since then but GM has been strong, +14% YTD. $ Stores & Clubs/SuperCtrs are leading the way with a combined growth rate of +8.5%. These channels promote value. Their success reinforces its importance to consumers. Also, Discount Dept Stores are again back in the game.
• Office, Gift & Souvenir Stores– $ increased slightly from July and were +20.5% vs August 2020. The pandemic hit them hard. They are still down vs 2019 – monthly and YTD. Recovery is a long way off, but things are improving.
• Internet/Mail Order – Their $ were up vs July as the pandemic continues to foster this channel’s growth. In August of 2019, their YTD growth was +13.9%. Now, their avg growth rate is +19.6% – a 41.0% increase.
• A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22>24% of total $). Pet Stores were usually essential, but most stores were not. In May 2020 they began their recovery. Their 2020 total sales were up +11.6%. Their August $ were down slightly from July but still #4 of all time. YTD sales are +27.5% vs 2020 and +39.3% vs 2019. Very strong!

Relevant Retail began recovery in May and reached a record level in December. $ fell in Jan & Feb, turned up again in March and began a monthly up/down rollercoaster. August $ are up and all channels but 1 are ahead of 2019 & 2020. The key drivers are the Internet, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, the Advance numbers for September.

2020 was a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1^st time since February. In December, Total Retail broke the $600B barrier – a historic first. Sales fell from their December peak in both January and February but still set monthly sales records. Then they took off again in March, setting a new monthly sales record of $633B. April sales were down slightly but they took off again in May to set yet another spending record, $643.1B. June>Sept $ fell but September was still the 8th biggest $ month in history. All major groups were down from August, but were positive in all other measurements for the fourth straight month. Some other areas of the economy are still suffering, some spending behavior has changed, and inflation has become a bigger factor in some increases. However, consumers continue to spend “big bucks”, especially in Relevant Retail, and the overall Retail marketplace continues its strong recovery.

Total Retail – In March, Total Retail hit $633.1B, a record for the most spending in any month in any year. In April, $ales dipped to $625.5B but were still $218.3B more than April 2020 – a record increase that was more than double the size of last year’s record drop. In May, sales set another new record, $643.1B. June>Sept sales dipped slightly and September was the 3^rd smallest month this year, which is normal. However, at $606.8B, it was still the 8th biggest month in history. Moreover, the current YTD average annual sales growth rate since 2019 is 9.2%, the highest ever in records going back to 1992. Total Retail has not just recovered. It is stronger than ever.

Restaurants – This group has no negative measurements vs 2020 or 2019 for 4 straight months. Last February YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1B, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 started off slowly. Through February, YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. In March sales took off and grew steadily from April Through July. Sales dipped slightly in August/September but were still strong vs 2019 & 2020. YTD their $ are plus 30.5% vs 2020 and +4.1% vs 2019. Their recovery is getting stronger.

Auto (Motor Vehicle & Parts Dealers) – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March and slowed only slightly in April>September as sales exceeded $122B in all 7 months – the 7 biggest months in history. To show how well consumers responded to their campaign you just need to look at the data. This group has exceeded $110B in monthly sales only 16 times in history. 13 of those occurred after the onset of the pandemic.  YTD Avg Annual Growth Since 2019 = +11.8% – the best performance of any big group.

Gas Stations – Gas Station $ales have been a mixed bag. If you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed and continued to grow to to a record $53.5B in July. They fell in Aug/Sept but are still +38% from 2020. They have been positive in all measurements vs 2019 & 2020 since March. Their comeback continues but there is another factor that must be considered – inflation. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began strongly inflating in 2021. In fact, September 2021 prices were 42.1% above 2020. That means that the 38.3% year over year $ lift in September was actually a decrease in the amount of gas sold. YTD Annual Growth Rate Since 2019 = +5.2%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($407B). They finished 2020 up $260B, +7.1%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.5%. Sales fell in January and February but set monthly records. In March they turned sharply up and then down in April. They bounced back in May then fell in June & July. In August sales rose again but fell in September. However, we should note that while December 2020 is still #1, March > September are 7 of the 9 highest $ months of all time. The Relevant Retail Market has exceeded $361B in monthly sales 9 tImes in history. 7 of those have occurred since the onset of the pandemic. It is also very important that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 now stands at +10.4%. The recovery has become widespread as all channels have been positive in all measurements vs both 2020 and 2019 for 2 consecutive months. However, the primary drivers throughout the pandemic were and continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus an exceptionally long 2020 “spring lift” from Hardware/Farm and Sporting Goods.

Now let’s look at what is happening in the individual retail channels to see where the $ are coming from. September $ were down 3.6% from August and the drop was widespread. However, a dip in September $ is normal and at -3.6% it was less than half of the -8% drop in 2019. The groups in the chart are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

Sales in 12 of 13 channels were down vs August but all were up vs September 2020, vs September 2019 and YTD vs 2020 and 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +10.4%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 17 consecutive months. The group set an all-time record of $407B in December and finished 2020 +$260B vs 2019. 2021 started strong, with record sales in every month. March > Sept. were 7 of the 9 biggest of all time. Essential channels are still the primary drivers:

• Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
• Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
• Bldg Materials/Garden/Farm– Their “Spring” lift may be ending but consumers are still focused on their homes.
• SuperCtrs/Club/Value/$ Strs – They kept the GM channel strongly positive. Value is still a big consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales fell for all channels in September, but all other numbers were positive. Even Department Stores $ are growing increasingly positive. After dipping to +7.5% in February, the growth rate by Club/SuperCtr/$ stores has remained near the current 8.8%. These stores are still the key to this channel.

• YTD Avg Annual Growth: All GM = +7.4%; Dept Stores = +1.2%; Club/SuprCtr/$ = +8.8%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were down in March>May from 2020 – No surprise, as these were 2020 binge months. In June>Sept they beat 2020 $. The Health, Personal Care group finished 2020 at +1.8% but 2021 has been better. September was down from August but YTD they are +10% vs 2020 and 2019.

• YTD Avg Annual Growth: Grocery = +7.2%; Health/Drug Stores = +5.2%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March > Sept have been spectacular for all these channels. The increase in Clothing vs September 2020 was less than usual but was still +22.5%. Only Furniture was up vs August, but all remained positive in all measurements vs 2020 or 2019 for the 7th consecutive month.

• YTD Avg Annual Growth: Clothing = +5.1%; Electronic/Appliance = +3.4%; Furniture = +10.3%

Building Material, Farm & Garden & Hardware – Their “Spring” lift which began in 2020 may be slowing. They have greatly benefited from consumers focusing on their home needs. They finished 2020 +53B (+13.8%). Sales took off in March, set a record in April then trended down May > Sept. They are still +14.4% YTD. Avg Annual Growth = +13.8%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. Even though $ fell 10% in September, it was still good enough for the 9^th consecutive monthly record. September YTD they are +32.9% vs 2020. Avg Annual Growth = +17.1%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 -$1.0B, -0.7%. In March 2021 sales took off and reached the $14+B level in May and they have stayed there. Sales fell -2.9% in September, but their YTD sales are now 27.8% above 2020 and 26.0% more than 2019. Their recovery has become very real. YTD Avg Annual Growth = +12.3% (4^th Best)

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV. The pandemic accelerated the movement to online retail. In February 2020 NonStore $ were +8.6% YTD. In December monthly sales exceeded $100B for the 1^st time. They ended 2020 at +21.4%, +$162.9B. This was 63% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and every month in 2021 has produced record $. September was -2.5% vs August but +10.6% vs 2020. YTD $ are +15.2%. YTD Avg Annual Growth = +17.9%

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. 2021 may become even more memorable. March>September are 7 of the 8 biggest $ales months in history with the 7 largest year over year monthly sales increases ever. The total increase was +$861B, which is 5 times the -$174B decrease from March>May 2020 which caused so much concern. At yearend 2020, Restaurants and Gas Stations were still struggling but Auto had largely recovered. Relevant retail had segments that also struggled but they still led the way for Total Spending to finish the year +0.5% vs 2019. 2021 has been even better. In June > September all major groups are positive vs both 2020 and 2019. The recovery has also become real for virtually all channels and monthly sales continue to set records. In fact, the current annual growth rates of +9.2% for Total retail and +10.4% for Relevant Retail are the highest in history. Retail has recovered but we’ll keep checking.

The U.S. Retail market reached $6.22 Trillion in 2020 from all channels – Auto Dealers, Supermarkets, Restaurants, Online retailers and even Pet Stores. Due to the pandemic, this year’s increase of $30B (+0.5%) was far below last year’s increase of $216B (+3.6%). The Total Retail Market was massively negatively impacted by COVID related closures and restrictions and only eked out a positive number because of increased spending in the Relevant Retail Segment. (Data courtesy of the Census Bureau’s monthly retail trade report.)

In this report we will focus on the top 100 Retailers in the U.S. Market. The base data on the Top 100 comes from Kantar Research and was published by the National Retail Federation (NRF). The criteria for inclusion was changed for 2020 as Restaurants were removed from the list. Along with 15 restaurants, 3 other retailers from 2019 didn’t make the 2020 list. In order to make more valid comparisons between 2020 and 2019, I used the data to create a revised “Restaurant Free” 2019 list. The Top 100 are the retail elite and account for 39% of the total market. The vast majority also stock and sell a lot of Pet Products. Let’s get started. The report does contain a lot of data, but we’ll break it up into smaller pieces to make it more digestible.

We’ll begin with an overview:

• The total Retail Market only grew $30B in 2020 (+0.5%) It was $216B (+3.6%) in 2019, +4.9% in 2018 and +4.3% in 2017. You can clearly see the impact of the pandemic on the Total Retail Marketplace.
  • The Top 100 grew $190B (+8.5%) – almost double last year’s +4.5% and radically better than the total market.
  • The Top 100 generates $2.4 Trillion in revenue, 39.1% of the total U.S. retail market – 8% more than 2019.
• Let’s make the data a bit more relevant. If you remove the revenue from Auto, Restaurant and Gas Stations, the “targeted” retail market for the Pet Industry is $4.0 Trillion – 64.6% of the total market. By the way, the gain in share is due to the loss of revenue in Restaurants and Gas Stations.
  • If we also remove Restaurant & Gas Station $ from the Top 100, the remaining $2.4T is 38.8% of the total market.
  • … and 60.1% of the $4.0 Trillion “target” market.

The Top 100 generally outperforms the overall market. In 2020 the difference in performance was significant. The big lift was driven by the Top 100 targeted retail group, less gas stations. Remember, the Top 100 is really a contest. Companies drop out and new ones are added. This can be the result of mergers, acquisitions or simply surging or slumping sales. In 2020 in addition to 15 restaurants being removed, 3 companies dropped out due to a big drop in sales:

• Ascena Retail Group
• Saks/Lord & Taylor
• Nieman Marcus

These companies are Apparel or Department Stores. Companies in both these groups generally fell in rank in 2020.

18 Companies were added to the top 100. Grocery – Supermarkets (9) and Convenience (2) led the way, along with:

• Pet Store
• Musical Instrument Store
• Electronics Store
• Auto Parts Store
• Apparel Stores (2)
• Alcoholic Beverage Store

Now let’s start “drilling down” into the specifics of the 2020 Top 100. First, let’s take Gas Stations out of the mix. Here’s a summary of Regular and Online Retailers versus Gas Stations.

For Gas Stations, you can see that their share of stores (5.5%) is significantly higher than their share of sales (0.6%). The impact of the pandemic on Gas Stations is very apparent as even these 3 biggest chains lost ground in $ and stores.

The impact on regular retailers was more complex. Their sales were up $191B (8.6%) while store count fell -0.2%.

• 71 Retailers gained +$244.7B (+12.5%) in sales and +0.8%in stores.
• 26 Retailers lost -$54.1B (-20.4%) in sales and -4.7% in stores.

Now that we have an overview of the Top 100, let’s take a look at the “targeted” retailer segment. There are 97 total companies. How many are buying and selling Pet Products? This will reinforce how Pets have become an integral part of the American Household and how fierce that the competition for the Pet Parents’ $ has become.

• Of 97 companies, 81 are selling some Pet Products in stores and/or online – up from 69 in the 2019 list w/restaurants
  • Their Total Retail Sales of all products is $2.30 Trillion which is…
    • 95.4% of the total business for Regular & Online Retailers in the Top 100
    • 37.0% of the Total Retail market and 57.3% of Relevant Retail – from 81 Companies who sell Pet Products.
  • 69 Cos., with $2.16T sales sell pet products off the retail shelf in 152,931 stores – 600 more than they had in 2019.
    • As you can see by the growth in both sales and store count, “in store” is still the best way to sell pet.
  • Online only is another story and the story gets complicated.
    • Amazon includes Whole Foods, which has stores so the Amazon $ are in the “Pet in Store” numbers.
    • Retailers who only sell pet online are losing market share and closing stores. However, internet only retailers, like Wayfair are showing strong growth.
  • Obviously, not selling pet products is not the best way to go as this group was down in sales and especially in stores.

Pet products are an integral part of the strongest retailers and are widespread across the entire U.S. marketplace. Of the Top 100, 152,900 stores carry at least some pet items at retail. There are thousands of additional “pet” outlets including 15,000 Grocery Stores, 9,000 Pet Stores, 16,000 Vet Clinics, 5,000 Pet Services businesses and more. Pet Products are on the shelf in over 200,000 U.S. brick ‘n mortar stores… plus the internet.

Before we analyze the whole list in greater detail let’s take a quick look at the Top 10 retailers in the U.S.

• They did $1.43 Trillion in Sales
  • 58.9% of Top 100 $ales
  • 23.0% of Total U.S. Retail $
• 2 up, 3 down in rank; (Group is unchanged since 2015)
• Sales are up for all. Amazon leads the way…again.
• Store count is down 360, (-1.0%)

In the next section we will look at the detailed list of the top 100. We’ll sort it by retail channel with subtotals in key columns. We’ll then break it into smaller sections for comments.

I have not done a lot of highlighting however:

• Pet Columns ’20 & ‘19 – a “1” with an orange highlight indicates that products are only sold online
• Rank Columns – “Red” 2019 column is my revised 2019 list w/o restaurants. “Yellow” 2019 is the original 2019 rank with restaurants. 2020 changes in rank from the “Red” 2019 list are highlighted as follows:
  • Up 4-5 spots = Lt Blue; Up 6 or more = Green
  • Down 4-5 Spots = Yellow; Down 6 or more = Pink

Let’s get started. Remember online sales are included in the sales of all companies

Observations

• After a number of acquisitions over several years, Drug is still in turmoil. Now we are seeing a growing number of closures of unproductive stores. However, sales are still growing. They are still “essential” outlets.
• The decline of the Traditional Department store segment was accelerated by the pandemic. Sales were down -29.9% and stores -8.7%. Although all carry a few pet items, often online, this channel has never fully embraced Pet Products.
  • Sears demise is just getting closer.
  • Saks sold Lord & Taylor in November 2019 and fell off the list as did Neiman Marcus.
• Much of the growth in the Convenience Store Chains in the Top 100 in recent years has come through acquisitions. There were no major acquisitions, but 2 chains were added to the revised list. Overall, $ and stores are +1.0%.
• Military Exchanges/Commissaries have added locations in recent years, which fueled the growth in sales. In 2017 they began reducing the number of Army/AF Exchanges. By 2019 this policy had spread to all military groups. In 2020 the number of stores stabilized but sales were up for all outlets and 3.0% overall.
• Alcoholic Beverage stores make their first appearance in the Top 100 – probably due to more at home dining.
• Auto Parts Stores accelerated their $ growth from 5.5% to 8.4% and added a new chain, Advance Auto. All chains but Advance also increased their stores for a net gain of 250 (+1.5%)
• In Apparel, Ascena dropped out, but Lululemon and American Eagle were added. These stores were nonessential, so sales and rank fell for virtually all and $ were -15.8% for the channel. Store count was mixed but down -1.6% overall.

Observations

• Electronics/Entertainment was up 17.6% in sales but down -6.4% in stores which reflects the pandemic influence.
  • Amazon growth accelerated in the pandemic from 20.9% in 2019 to 33.7%. With the acquisition of Whole Foods in 2017 they also have a small but growing brick ‘n mortar presence in the market.
  • Only Verizon and Gamestop declined in $ and lost significant rank. Dell Technologies was added to the group.
• Signet Jewelry’s sales were down -12.5%. Their decline began in 2017 but was radically increased by COVID.
• Mass Merchants have 3 of the 7 largest volume retailers in America – Wal-Mart, Costco and Target. In recent years, Wal-mart & Costco have driven the growth in this channel. In 2020, the lift was strong across the board, +10.4%.
  • Wal-Mart had a 8.7% increase in sales which is triple last year’s 2.6%. Their SuperCenter business was essential, so store sales increased, and their online sales took off. However, “regular” Discount Department Stores are losing market share. This impacts both Wal-Mart and Target so many outlets are adding more fresh groceries.
  • Target posted a 4^th consecutive sales increase in 2020, +19.8%, the largest in the string and for the entire group.
  • Costco had another +9.3% increase. New store growth slowed but the $ are increasing, both in store and online.
  • BJ’s sales were up +17.0%, the 3^rd consecutive increase after a string of annual declines from 2013 to 2017.
  • Meijer had +10.6% growth in sales and increased their store count by 3.2% in 2020.
• Consumers’ thoughts turned to their homes in the pandemic. This was very apparent as Home Improvement & Hardware companies increased sales by +20.2%. The big guys, Lowe’s, Home Depot & Ace led the way but only True Value had decreased sales or store count.
• Like 2018 & 2019, all Home Goods Companies but Bed Bath & Beyond increased sales. They also drove down store count. Sales were up 10.1%, but it was again driven by Wayfair, +$4.1B (+54.6%) who now ranks #35, up 19 from 2019.
• Tractor Supply $ skyrocketed, +26.8%, triple their average rate of +8.3% since 2013. They also increased stores +4.1%.
• Hobby & Crafts stores $ were down -4.8%, due to Hobby Lobby and down -0.3% in stores due to Michael’s.

Observations

• Supermarkets – $483B in Sales; 24 Companies; With 23 Selling Pet Products in 17,000 stores. This is a very important group for the Pet Industry. With the highest frequency of consumer visits of any channel, the competition is fierce. The mergers and acquisitions have slowed. All companies but Southeastern showed increased sales, most in double digit %. Southeastern Grocers filed for bankruptcy in 2018. Store closures and reduced sales continue.
  • Overall sales were up $46.4B (+10.6%) while store count fell slightly, -0.1%
• Small Format Value Stores: These stores offer both value and convenience – great consumer appeal in a pandemic.
  • All companies increased sales and store count. Overall $ales were up $8.7B (+15.5%) and stores were +4.0%.
  • Dollar General continues to lead the way in growth, Sales +21.6%, Stores +6.0%.
  • Dollar Tree growth in sales and stores more than doubled 2019 but still lags behind Dollar General.
  • Big Lots had small growth in stores but a 16.4% increase in sales, for 2 consecutive years of increases.
• Pet Stores, as essential retailers showed strong growth in 2020. Sales were up $1.8B (+10.8%) and the number of stores grew by 3.8
  • After the acquisition of Chewy in 2017, PetSmart’s sales registered a huge increase. In 2020 Chewy undoubtedly produced a substantial amount of the $ growth as consumers increased online shopping.
  • Petco qualified for the Top 100 for the first time in 2016. They hung on in 2017 but didn’t make the cut in 2018 & 2019. In the 2020 restaurant free list and with a pandemic surge in sales, they came back strong at #75. It is also important to note that they had a 5.6% increase in stores.
• Office Supply Stores – This channel continues its decline as Consumers accelerated their move to online ordering.
• Sporting Goods – This group also benefited in the pandemic as consumers turned their attention to personal recreation. 2 companies closed a few stores and 1 had no change but all increased sales with overall growth of $2.3B (+9.3%). By the way, the largest company, Dick’s Sporting Goods opened enough stores to push the group to +0.1%.

Gas Stations and the Totals

Gas Station Observations

Although gas stations aren’t relevant in terms of Pet Products Sales, they are relevant in our daily lives.

• Falling gas prices in 2019 flattened the revenue growth of the total Gas Station Channel. The Top 100 Gas Station sales and stores were both up that year only because Speedway acquired Andeavor Brands with their 3200+ outlets.
• 2020 brought the pandemic and gas usage plummeted. The big chains outperformed the overall channel, but all closed some outlets and had decreased sales.
• In 2021 recovery began, prices inflated and 7 Eleven bought Speedway. We’ll see the impact on the Top 100 in 2021.

Wrapping it up!

The Top 100 became the Top 100 by producing big sales numbers and their performance, except for 2018, has usually exceeded the overall market. In 2019 things returned to “normal”, +4.5% for the Top 100 vs +3.6% for Total Retail. Normal went away in 2020 with the onset of the pandemic. Restaurants and Gas Stations were hit hard by closures and consumers’ stay at home attitude. The impact on regular retailers varied widely. Essential outlets like Grocery, Supercenters/Clubs and $ Stores prospered. Retail channels like Hardware, Farm and Sporting Goods stores also benefited as consumers focused their attention on “home”. Of course, sales from internet retailers exploded and we can’t forget Pet Stores. Consumers spent more time with their pets and adopted more. This drove up product sales. The non-essential stores were a different story entirely. Department Stores, Office Supply, Apparel and Jewelry stores were hit hard. All but Apparel had been trending down for years, but the pandemic accelerated their slide.

The pandemic also caused a change in methodology for choosing the Top 100 as restaurants are now excluded from the list. Using available data, I took it upon myself to generate a revised “restaurant free” 2019 Top 100 to allow more valid comparisons between the two. This “relevant retail” Top 100 grew $191B (+8.6%) in 2020 and has been a major factor in the ongoing recovery of the U.S. Retail Marketplace.

Pet Products are an important part of the success of the Top 100. 81 companies on the list sell Pet Products in 152,931 stores and/or online. Let’s look closer at the 69 companies that stock pet products in their stores. This group generated $2.16T in total sales. How much was from pet? Let’s “Do the math”. If we take out the $18B done by PetSmart & Petco, and the remaining companies generated only 1.7% of their sales from Pet, we’re looking at $36.4B in Pet Products sales from only 67 “non-pet” sources! (Note: The 1.7% share for Pet is a low-end estimate based on data from the Economic Census.) The APPA reported $64B in Pet Products sales for 2020. That means 67 mass market retailers accounted for 56.8% of all the Pet Products sold in the U.S. in 2020. Add back Petco & PetSmart/Chewy and the Top 100 did 81.8%.

Pet Products are widespread in the retail marketplace but the $ are concentrated. Regardless of your position in the Pet Industry, monitoring the Top 100 group is important. This group reflects the triumphs, tribulations and ongoing evolution in the retail market – the growing influence of the internet and the importance of Value. The COVID-19 crisis caused turmoil in 2020. 2021 has started strong. We’ll see what changes it brings to the retail market and the Top 100.

Pet Products are sold seemingly everywhere today – 160,000 retail outlets of all kinds – clothing stores, supermarkets, gas stations, the internet. That number climbs to over 200,000 when you add in the services outlets. However, when you think of the beginning of this colossal industry, you must think of the independent pet store as the seed that became the mighty oak. We will take a look back to 1987 to see where this channel was and how it has evolved through the years.

The data in this report is courtesy of the U.S. Census Bureau. Their Economic Census is done every 5 years in years ending in “2” and “7”. The early years have only basic information but since 1997, more detailed information is readily available. In 2017 they did change some classifications which will make a few comparisons no longer possible.

Let’s get started. Here is a detailed chart on some key measurements and a graph of their growth from 1987 > 2017.

The little chart has a wealth of information, and the graph shows the spectacular overall results. First, the number of stores almost doubled but the key factor was that the sales per store is 7.4 times greater. The number of stores increased but superstores and chains became the dominant type. This is evident by the fact that the number of employees per store is 2.3 times more in 2017 than it was in 1987. Add this to the attitudinal conversion of pet owners to pet parents, with an ever increasing personification of their pets and you get 13.5 times more $.

Now let’s drill deeper. Sales increased +$16.99B (+1249%). How much of the increase was real or just due to petflation?

The annual growth rate in “full” $ was 9.0% from 1987 to 2017. Pet Food and Supply prices went up 77.5% during this time. This is an annual inflation rate of 1.9% which is better than the overall 2.6% CPI rate during this period. This made the “real” growth rate 7.0%. That’s damn good and means that 77.3% of Pet Store $ growth has been real. However, this doesn’t tell the whole story. On the chart you see that real growth flattened from 2007 to 2012. This was largely due to the fact that Pet Food and Supply prices increased an incredible 17.0%. (8.2% per year) from 2007 to 2009. Coming at the onset of the recession, this drove consumers to look for value. The result was that consumers moved strongly to other channels. Pet Stores’ share of total pet products sales fell from 39.0% in 2007 to 33.1% in 2012 and Total General Merchandise took over the top spot in Pet Products sales. All the Food and Supply prices have fallen or at least flattened out since 2009. Total Pet Products inflation from 2009 to 2017 was 1.1%, an annual rate of 0.13% – almost nothing. As a result, “real” sales for Pet Stores returned to a more normal path.

Now, let’s take a look at the progress of the key contributing factors over the years in 5 year segments.

• 1987 to 1992 – The Number of Pet Stores grew significantly – from 5475 to 7150 (+30.8%). The number of employees per store is about the same. Superstores and chains were just getting started so these were mostly traditional sized stores. The amount of sales per store increases 50% as American’s love for pets truly begins to show. The result – sales basically double in 5 years.
• 1992 to 1997 – The rise of Superstores. Note the 37.1% increase in employees per store. They are being built and they generate significantly more volume per store – +76.6%. The result – sales more than double in 5 years. In 1997 Pet Stores pushed Supermarkets out of the top spot in Pet Products sales, with 40% of all $.
• 1997 to 2002 – Superstores continue to rise but at a cost to the independents. The net result is 692 fewer outlets (-8.3%). The Sales per store increases 50.8% which reflects the higher percentage of larger format stores. The total channel sales growth rate slows markedly from the previous 10 years, but sales were still up +38.2%.
• 2002 to 2007 – The channel bounces back with a 15.2% increase in stores – most of which are chains and superstores. The per store sales goes up another 30.5%, reflecting this change. The result – sales grow 50.3%. They continue to hold their ground in the overall marketplace, with 39% of all Pet Products Sales.
• 2007 to 2012 – Huge price increases…plus a major recession. There is no growth in the number of stores, but an even higher percentage are superstores. The overall channel sales growth – +29.9% – exactly mirrors the per store growth. Also consider:
  • The overall pet food and supplies category (in all channels) grew 50% from 2007 to 2012.
  • Actual Pet Store Sales from 2007-2012 was only up 6.6% – (Factoring in the huge price increases)
  • The result – Pet Store Sales grew but had a big loss in pet products market share – down to 33.1%
• 2012 to 2017 – Inflation essentially ends, and more outlets are opened, +13.5%. Per store sales were also up slightly, +9.8%. This produced an overall sales increase of +24.7%. Products were +27.7% which resulted in a minimal gain in market share to 33.3%. This is small, but significant because Pet Stores and $ stores were the only brick ‘n mortar outlets to gain pet products market share in a major consumer movement to the internet.

Through the years, pet Stores have grown larger in size but paused their growth in numbers from 2007 to 2012, largely due to the great recession. During this recession period, their growth in revenue slowed to +29% and did not kept pace with the overall market in the Pet Food and Supplies category, so they lost some market share. However, they bounced back in the 2012 to 2017 period, with more stores and a total sales increase of 24.7% (Products $ were +27.7%). Although this was the smallest $ percentage increase in history it was very significant. The Pet Products marketplace is incredibly competitive, and a new major player is now in the game – the internet. Pet Stores, with their vast array of pet products and services and $ stores, with their value and convenience were the only 2 brick ‘n mortar retail channels to gain share in Pet Products in what was a tsunami like movement of consumers to internet shopping. It shows that Pet Stores have not lost their appeal and that they are both resilient and adaptable in changing circumstances.

Now, let’s look deeper into the retail sales numbers for Pet Stores for trends in specific Product segments. There is sales data from the U.S. Economic Census back to 1987. From 1997 on the data gets reasonably detailed. As I said the Census Bureau changed their product classification system in 2017. This will keep us from doing some comparisons to earlier years. However, I have built a chart which is inclusive of both systems to maximize our ability to compare specific data.

The chart contains all available data. The 2017 numbers are highlighted to indicate the % change from 2012.

• Green = 10%> Increase
• Blue = <10% Increase
• Pink = Any Decrease

Here are the details which are followed by specific category observations for each 5 year period.

Observations 1992 to 1997

1. Data was limited in 1992 but we saw strong growth in store count as superstores and other chains rapidly expanded.
2. Sales in Pets and Pet Products more than doubled, +103.9% as Pet Stores became the #1 “go to” channel for Pet Products. Over 95% of Pet Stores’ total sales came from Pets and Pet Products in both 1992 and 1997.
3. There was a hint of growing diversity as Pet Services $ grew by 260% and A/O revenue more than doubled. Pet Book sales also doubled as they reached what would be their all-time high in $.

Observations 1997 to 2002

1. The store count fell 8% due to the loss of many independent stores. Total revenue increased 38% but the $ per store increased 50%, which reflects the dominance of the larger stores.
2. Pets and Pet Products $ales increased +36.2%, which was slightly less than total revenue so their share of Total Pet Store $ dipped to 93.8%. This came from a combination of factors.
3. The number of stores carrying live pets (nonfish) fell -11.8% but sales increased +32.5%. Obviously, the sales were becoming more concentrated. Fish and aquarium supplies was a different story. The numbers are bundled but Total Aquarium (Fish & Products) fell -28.5% in store count and -12.7% in $. This Category became markedly less popular.
4. Pet Services continued strong growth, with a 53% increase in store count and a 267% increase in sales. A/O revenue increased +19.6%. Books were available in 40.2% more stores but began their long revenue slide -24.9% in $.
5. Non Aquarium Pet Supplies increased sales $1.0B, +48.8% to $3.1B, which allowed them to slightly widen their razor thin lead over Pet Food as the #1 category in Pet Stores.
6. Pet Food sales increased sales by $0.9B, +42.9% to $2.9B. We should note that in 1997 and 2002 Pet Food was carried in 2% fewer stores than Pet Supplies. However, there is no doubt that Food is the primary driver in most pet store consumer visits. It is the most “needed” category for Pet Parents. That’s why it’s put at the back of the store.
7. Pet Store offerings became a little more diverse. However, 78.7% of Pet Stores’ total revenue in 2002 and 89.5% of the increase from 1997 came from Pet Food and Non-Aquatic Pet Supplies. They are the key categories.

Observations 2002 to 2007

1. Total revenue increased to $11.4B. (+50.3%) as store count grew 15.2%, primarily due to chains.
2. The sale of pets (non-fish) increased both in number of stores (+8.1%) and sales volume (+17.1%).
3. In 2007 Pet Foods became the largest segment. Sales were $4.6B, +$1.7B (+59.6%). This was due to the initial move to premium which began in 2004 and the 2007 melamine recall which began the “buy Made in the USA” trend.
4. Pet Supplies share of $ is much higher in Pet Stores than in the overall market. Sales hit $4.2B, +$1.1B (+37.3%) but the growth rate was below the overall market. This segment is very vulnerable to migration to other channels.
5. Between 2002 and 2007, Aquarium products came back strong, with spectacular growth in the number of outlets – +25.8% and volume, +$405M (+59.3%). Sales reached a billion dollars for the first time – $1.09B to be exact.
6. A/O products $ grew +25.6% but Pet Books continued their slide, -21.1%. Their drops pretty much mirror the overall book market as more and more consumers turn to other sources and to electronic formats.
7. The Service Segment provided by Pet Stores reached $734M, up $427M (+139%) in revenue – Now 6.4% of Total $.

Observations 2007 to 2012

1. Total revenue hit $14.7B, a $3.3B increase (+29%). However, the store count remained stagnant at just under 8800.
2. Pets, Food and Supplies sales increased $2.9B to $13.3B. However, this 27.6% increase was considerably below the 50% increase in the overall Pet Products market, which resulted in a large drop in market share for Pet Stores.
3. Pets (nonfish) were sold in 3% fewer outlets…but the drop in sales was very significant… -34%.
4. Pet Foods remained the largest segment with strong growth, +44.8%. This $2.1B gain accounted for 63% of the increase in the total $ for the channel. This is probably a reflection of the strength of “premium” pet food sales. Notably, the number of stores stocking pet food exceeded the number stocking supplies for the first time…ever.
5. Pet Supply Sales increased $0.9B (22.5%). This is less than half of the increase of the overall market and reflects the consumer migration to other channels. Prices deflated after 2009 and more categories became commoditized.
6. Fish and Aquarium Products had no growth in the number of outlets and only 5% growth in sales. Considering the overall inflation rate during the period (+4.4%), “real” sales were essentially flat.
7. A/O products growth slowed to +8.5%. Book sales continued to fall and in 2012 were less than half of 2002.
8. Services were offered in 25% more Pet Stores and sales grew +$0.4B (+54.5%) to reach $1.1B, which was 7.7% of total revenue. Services is a great opportunity to gain business which can’t migrate to the Mass Market channels.
9. Pets, Services and Channel Differentiated Premium Pet Foods and Products are keys to maintaining the consumer traffic and sales in the Pet Store Channel. The U.S. consumer is looking for value. The generally higher prices on supplies and “regular” food in these stores have encouraged the migration to other channels.

Observations 2012 to 2017

1. Total Revenue increased $3.6B, +24.7% to reach $18.4B. The store count grew +13.5% to 9984 – almost hit 10,000.
2. Pets and Pet Products $ was $17.1B, a $3.7B (+27.7%). This was strong enough for Pet Stores to be only 1 of 2 retail channels to actually gain share (only 0.2%) in Pet Products $ against the strong consumer movement to the internet.
3. Live pets/fish $ grew +$0.23B, +32.9% to $0.9B but the % of stores stocking any live animals fell to a record low 58%.
4. Pet Food $ales soared to $9.8B, up +$3.1B (+45.5%) and for the first time, in 2017 accounted for more than half of total Pet store revenue – 53.3%. The number of stores stocking pet food was 14.8% more than the number stocking supplies. Pet Food provided 83.8% of the lift in Pet Products $ and 86.1% of the increase in total pet store revenue. Pet Food and more specifically super premium pet food was the primary reason that Pet Stores held their ground and even gained a little share in the overall Pet Products marketplace.
5. Pet Supplies also increased sales, +$0.3B (+6.3%) but it was far less than food and their share of total Pet Store revenue fell to a record low 39.8%. The number of stores stocking Pet Supplies fell 5% and only 74.1% of Pet Stores stocked Pet Supplies – a record low.
6. Aquarium Products, excluding live fish, showed some positivity. The number of stores stocking Aquarium Products increased +4.1% and sales increased +$0.1B, +11.2% to a total of $0.9B.
7. All other products and services has always been a very small part of pet stores revenue but sales have always increased…until 2017 when they fell -16% and their share of total $ fell to 0.9%.
8. The number of Pet Stores carrying books actually increased by 1% but sales plummeted to $3.3M, which is -89% below the sales from 20 years ago in 1997.
9. The number of Pet Stores offering Pet Services actually fell -7.2% from 2012 and sales decreased -$30M (-2.7%) to $1.103B. This is a bit of a surprise but it came as a result of competition. Pet Services outlets grew in number, giving Pet Parents more options and better prices. This segment had not yet drawn a significant amount of new users. According to the US BLS Consumer Expenditure Survey, this changed in 2018 and spending skyrocketed. I’m sure that Pet Stores got their share. This segment is an important allure for Pet Parents who want one stop pet shopping.
10. Pet Stores strongly increased sales from 2012 to 2017 and even gained a small amount of share in the total Pet Product marketplace where the internet cut into virtually every other channel’s business. This was primarily due to the consumer demand for Super Premium Pet Foods, where Pet Stores were the “go to” source.

Wrapping it up

Pet Stores pioneered the pet industry but they also led the way in trends that have spurred the spectacular growth of the industry since 1987. The rise of superstores and chains provided unprecedented space for Pet Supplies. This was important for existing manufacturers but it was especially important for new companies. There was finally retail space for a “flood” of new products. According to the US BLS Consumer Expenditure Survey, in 1987 Pets Supplies accounted for 13.9% of Total Pet Spending. Then came Pet Superstores and chains. By 1996 the Pet Supplies share of Total pet $ was 23.5%. It has remained near this level ever since. Although larger Pet Stores showed the way, this spurred a radical expansion of pet product distribution across the whole retail marketplace. Another key industry trend was the move to premium Pet Food. Pet Stores led the way again. They had the room for new premium foods, which became increasingly desired by Pet Parents. This trend began in about 2004. The 2007 Melamine recall accelerated the movement as consumers moved successively to made in the USA, then to all ingredients from the USA, next to all natural and now to super premium. Plus, you can add the latest big movement – pet health supplements, often in treat form.

Take a look at the following graph to better “see” the business impact of these trends on Pet Stores.

In 1997, Pets and Supplies $ dominated the channel with 58.2% of the total revenue. Food started to gain ground between 2002 and 2007 when premiumization began. They moved to the top in 2012 when overall Pet Stores lost considerable market share to other channels. Then Super Premium Foods took off and Pet Stores were the “go to” outlet. In 2017, the share of sales for Pet Food had essentially flipped from 2007. The A/O business has always been small but is now becoming insignificant. The Services Segment is small, around 6% of total revenue since 2007, but it is not insignificant. Offering Pet Services makes Pet Stores more of a one stop shopping experience for Pet Parents and is a big positive point of differentiation. This differentiation and the “one stop shopping” that it provides for Pet Parents was a key factor that allowed Pet Stores to hold their market share against the internet wave that began from 2012 to 2017.

There’s more to the story!

Larger format pet stores bundled into chains – big and small was obviously a great idea but more than that, the timing was perfect – for society, for consumer attitude and for the retail marketplace. To take a closer look at this timing, we have to go back over 75 years to the passing of the G.I. Bill in 1944. This rewarded Veterans for their service by providing education and job training benefits to help advance their after service careers. It also offered low interest home mortgages which was a major reason that the homeownership rate for the U.S. rose from 40% in 1940 to 60% in 1960. Also, more space was needed for this expansion which resulted in the creation of the suburbs, a new concept which offered the convenience of urban living with more space for households.

The soldiers returning from World War II also helped create another movement – more children. U.S. birthrates soared from 1946 to 1964, creating the largest generation – the Baby Boomers. Many of them grew up in this new suburban environment – which offered more space in a home that was owned and controlled by their parents. Pets began to be added to the household mix – sometimes in a big way. I am a Boomer. By the time that I was in 3^rd grade (1956), my older brother and I had 2 dogs, 2 cats, a canary, a parakeet, a hamster and…a raccoon. In those days dogs and cats were “outdoor” animals. They didn’t come into the house but we let them take refuge in the basement during inclement weather. As we moved into our early teens, we no longer required a babysitter. While our parents worked, we roamed the neighborhood, especially in the summer. Our dogs were our constant companions. In the summer, we spent more time with them than we did with our parents. They became siblings to us so it is no surprise that when we grew up, we bought suburban homes, started families and added Pet “children” to our household.

So the changes in society and consumer attitudes were underway. However, we still needed major changes in the retail marketplace. When Boomers were growing up, Department Stores “ruled”. This channel has never embraced pet products. This indicated that they weren’t in tune with consumers and was an early sign that they would fade. In the 60’s discount stores came into being. First came general merchandise, Wal-Mart, K-Mart, Target. They grew and ultimately progressed to SuperCenters and Clubs in the 90’s. Consumers became used to large stores with a huge product selection. In the late 80’s and 90’s this concept trickled down as large format specialty stores came to the forefront – Toys R Us, Office Depot, Circuit City, Barnes & Noble, etc. Consumers were ready for Pet Super Stores.

There is one more key element – money. Income has been and continues to be the driving force in increased pet spending. Let’s go back to the key players. In 1991 the oldest Baby Boomers were turning 45. 45>54 is the highest income age group so in the 90’s, the biggest generation was entering their peak earning years. Pet Parents finally had outlets that not only filled their pets’ wants and needs but introduced new ones and… they had the money to buy it all.

The creation and development of larger format pet stores and chains was literally a positive example of the “perfect storm”. It was a great idea, all the elements were in place and the timing was perfect. Pet stores continue to evolve as the does the market. The store size has dialed back a little to make shopping a little more convenient. The channel is also not just huge chains. Small chains and local independents are also strong. The successful outlets are adapting to a virtual world, offering features like BOPIS. However, one thing will remain unchanged and that guarantees their continued success. Pets are very personal. Boomers were the first pet parents but they passed this mantle on to their children and it has now become the norm across the U.S. In fact the relationship has become even stronger as we increasingly personify our pets. This has led to substantial growth in categories like apparel but probably had its greatest impact on categories related to health. It fueled the spectacular and ever growing movement to higher quality, super premium foods and now medical supplements. Pet Parents want and need the opportunity for personal interaction when shopping for their pets, especially when considering any new product. This can only happen in Pet Stores.