Pet Stores in the US

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Pet Stores in the US February 2012
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IBISWorld Industry Report 45391
Pet Stores in the US
February 2012
Caitlin Moldvay
2
About this Industry
16 International Trade
2
Industry Definition
17 Business Locations
2
Main Activities
2
Similar Industries
19 Competitive Landscape
31 Industry Data
2
Additional Resources
19 Market Share Concentration
31 Annual Change
19 Key Success Factors
31 Key Ratios
3
Industry at a Glance
4
Industry Performance
22 Barriers to Entry
4
Executive Summary
23 Industry Globalization
4
Key External Drivers
5
Current Performance
24 Major Companies
8
Industry Outlook
24 PetSmart Inc.
30 Industry Assistance
31 Key Statistics
20 Cost Structure Benchmarks
21 Basis of Competition
11 Industry Life Cycle
25 PETCO Animal Supplies Inc.
13 Products & Markets
28 Operating Conditions
13 Supply Chain
28 Capital Intensity
13 Products & Services
29 Technology & Systems
14 Demand Determinants
29 Revenue Volatility
15 Major Markets
30 Regulation & Policy
32 Jargon & Glossary
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
1
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Pet Stores in the US February 2012
2
About this Industry
Industry Definition
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Main Activities
The primary activities of this industry are
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Retailing pets
Retailing pet food and supplies
Providing pet grooming and boarding services
The major products and services in this industry are
Live animals
Pet food
Pet services
Pet supplies
Similar Industries
54194 Veterinary Services in the US
Establishments in this industry provides veterinary services.
81291 Pet Grooming & Boarding in the US
Operators in this industry provide pet grooming and boarding services.
45411a E-Commerce & Online Auctions in the US
Businesses in this industry retails pet foods and pet supplies via the internet.
45411b Mail Order in the US
Establishments in this industry retail pet foods and pet supplies via mail-order or catalogs.
Additional Resources
For additional information on this industry
www.americanpetproducts.org/
American Pet Products Association
www.petage.com
Pet Age Magazine
www.petbusiness.com
Pet Business
www.hsus.org
The Humane Society of the United States
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Pet Stores in the US February 2012
3
Industry at a Glance
Pet Stores in 2012
Key Statistics
Snapshot
Revenue
Annual Growth 07-12
Annual Growth 12-17
Profit
Wages
Businesses
$14.7bn 2.8%
3.8%
$634.1m $1.9bn 13,730
Number of pets (cats and dogs)
Revenue vs. employment growth
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% change
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10
210
8
200
6
190
4
180
Millions
Market Share
2
170
0
160
−2
150
−4
Year 04
06
Revenue
08
10
12
14
16
18
140
Year 03
05
07
09
11
13
15
17
Employment
SOURCE: WWW.IBISWORLD.COM
p. 24
Products and services segmentation (2012)
Key External Drivers
10.2%
Number of pets
(cats and dogs)
4.5%
Live animals
Pet services
Per capita disposable
income
External competition
Number of households
58%
27.3%
Pet food
Pet supplies
p. 4
SOURCE:
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SOURCE:
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Industry Structure
Life Cycle Stage
Revenue Volatility
Capital Intensity
Growth
Regulation Level
Medium
Low
Technology Change
Medium
Low
Barriers to Entry
Medium
Industry Assistance
None
Industry Globalization
Concentration Level
High
Competition Level
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 31
Low
Medium
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Pet Stores in the US February 2012
4
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive
Summary
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Key External Drivers
Number of pets (cats and dogs)
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Pet Stores in the US February 2012
5
Industry Performance
Key External Drivers
continued
Number of households
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Per capita disposable income
Number of pets (cats and dogs)
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200
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Millions
190
180
170
160
0
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140
Year 03
05
07
09
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15
17
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Year
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07
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SOURCE: WWW.IBISWORLD.COM
Current
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Pet Stores in the US February 2012
Industry Performance
Growth during the
recession
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Pet Stores in the US February 2012
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Industry Performance
Product innovation
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Pet Stores in the US February 2012
8
Industry Performance
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Pet Stores in the US February 2012
9
Industry Performance
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Pet Stores in the US February 2012
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Pet Stores in the US February 2012
11
Industry Performance
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SOURCE: WWW.IBISWORLD.COM
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Pet Stores in the US February 2012
12
Industry Performance
Industry Life Cycle
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Pet Stores in the US February 2012
13
Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES
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Animal Food Production in the US
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Toy, Doll & Game Manufacturing in the US
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Products and services segmentation (2012)
10.2%
Pet services
4.5%
Live animals
27.3%
Pet supplies
Total $14.7bn
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Pet Stores in the US February 2012
14
Products & Markets
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Animal
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Horse
Freshwater Fish
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Reptiles
Small Animals
Share of total pets (%)
4.3
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Live animal purchases
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Pet Stores in the US February 2012
15
Products & Markets
Demand
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Major market segmentation (2012)
7%
10%
Consumers over
65 years old
Consumers under
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28%
Consumers 45 to
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13%
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Consumers 25 to
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Pet Stores in the US February 2012
16
Products & Markets
Major Markets
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
17
Products & Markets
Business Locations 2012
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2.0
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SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
18
Products & Markets
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SOURCE: WWW.IBISWORLD.COM
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
19
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration in
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Key Success Factors
IBISWorld identifies
250 Key Success
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business. The most
important for this
industry are:
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
20
Competitive Landscape
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Average Costs of
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Industry Costs
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13.7
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70.3
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Cost Structure
Benchmarks
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SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
21
Competitive Landscape
Cost Structure
Benchmarks
continued
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Level & Trend
Competition in
this industry is
Medium and the
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
22
Competitive Landscape
Basis of Competition
continued
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Level & Trend
Barriers to Entry
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Competition
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Capital Intensity
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Pet Stores in the US February 2012
23
Competitive Landscape
Barriers to Entry
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
24
Major Companies
PetSmart Inc. | PETCO Animal Supplies Inc. | Other Companies
Major players
(Market share)
PETCO Animal Supplies Inc. 20.7%
35.0%
Other
PetSmart Inc. 44.3%
Player Performance
PetSmart Inc.
Market share: 44.3%
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
25
Major Companies
Player Performance
continued
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PetSmart Inc. – financial performance
Year*
Revenue
($ million)
(% change)
Net Income
($ million)
(% change)
Employees
(% change)
2007
4,672.7
10.4
258.7
39.8
43,000
N/C
2008
5,065.3
8.4
192.7
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46,000
7.0
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5,336.4
5.4
198.3
2.9
45,000
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5,693.8
6.7
239.9
21.0
47,000
4.4
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6,103.8
7.2
301.8
25.8
47,500
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2012*
6,531.0
7.0
348.3
15.4
48,500
2.1
*Estimates
Player Performance
PETCO Animal
Supplies Inc.
Market share: 20.7%
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Pet Stores in the US February 2012
26
Major Companies
Player Performance
continued
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Petco Animal Supplies Inc. – financial performance*
Year
Revenue
($ million)
(% change)
Employees
(% change)
2007
2,400
9.1
20,100
2.7
2008
2,550
6.3
22,000
9.5
2009
2,700
5.9
23,200
5.5
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2,800
3.7
23,500
1.3
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2,925
4.5
24,400
3.8
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3,050
4.3
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SOURCE: FORBES.COM
Pet Supplies Plus
Estimated market share: 3.6%
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WWW.IBISWORLD.COM
Pet Stores in the US February 2012
27
Major Companies
Other Companies
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Pet Supermarket Inc.
Estimated market share: 1.6%
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Pet Food Express
Estimated market share: Less than 1.0%
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WWW.IBISWORLD.COM
28
Pet Stores in the US February 2012
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level of capital
intensity is Low
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Capital intensity
Capital units per labor unit
0.5
0.4
0.3
0.2
0.1
0.0
Economy
Retail Trade
Pet Stores
Dotted line shows a high level of capital intensity
SOURCE: WWW.IBISWORLD.COM
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Tools of the Trade: Growth Strategies for Success
Investment Economy
Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Traditional Service Economy
Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Pet Stores
Veterinary
Services
Capital Intensive
Labor Intensive
New Age Economy
E-Commerce & Online Auctions
Mail Order
Animal Food Production
Toy, Doll & Game Manufacturing
Change in Share of the Economy
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
29
Operating Conditions
Capital Intensity
continued
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Technology
& Systems
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LPSURYHHI¿FLHQF\
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WR\VDQGQRQGLVFUHWLRQDU\SURGXFWV
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JHQHUDOO\GLVFUHWLRQDU\DODUJH
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VXSSOLHVLQRUGHUWRVXUYLYH7RSURYLGHD
EUHDNGRZQSHWIRRGPDNHVXSDERXW
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The level of
Technology Change
is Medium
Revenue Volatility
Level
The level of
Volatility is Low
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Volatility vs Growth
1000
Revenue volatility* (%)
Level
Hazardous
Rollercoaster
100
10
Pet Stores
1
0.1
Stagnant
–30
–10
Blue Chip
10
30
50
70
Five year annualized revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
30
Operating Conditions
Revenue Volatility
continued
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Regulation & Policy
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Level & Trend
The level of
Regulation is
Medium and the
trend is Steady
Industry Assistance
Level & Trend
The level of
Industry Assistance
is None and the
trend is Steady
Key tariffs
Goods
Saddlery and harness for any animal (excluding dogs – see above)
Dog leashes, collars, muzzles, harnesses and similar
Pet food
Low rate
High rate
2.8
2.4
0.0
2.8
2.4
0.0
SOURCE: USITC
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
31
Key Statistics
Industry Data
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
Revenue
($m)
10,234.7
11,064.5
11,486.7
11,925.2
12,872.9
13,246.2
13,338.9
13,712.4
14,164.9
14,745.7
15,424.0
16,102.7
16,730.7
17,098.7
17,799.8
42/63
412/705
Annual Change
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
Revenue
(%)
8.1
3.8
3.8
7.9
2.9
0.7
2.8
3.3
4.1
4.6
4.4
3.9
2.2
4.1
14/63
207/705
Industry
Value Added
($m)
1,987.3
2,102.1
2,078.9
2,330.0
2,400.4
2,442.9
2,516.9
2,604.2
2,701.9
2,803.5
2,920.2
3,040.9
3,137.3
3,252.0
3,319.5
40/63
510/705
Establishments
15,835
16,541
16,813
17,130
17,638
17,110
16,411
16,509
16,658
16,875
17,145
17,316
17,680
18,086
18,575
41/63
219/704
Enterprises Employment
13,790
88,620
14,213
90,933
14,483
98,384
14,558
101,237
14,804
109,870
14,115
106,460
13,393
108,928
13,420
110,126
13,527
112,549
13,730
115,363
13,977
118,939
14,131
120,723
14,414
123,379
14,731
128,314
15,084
131,522
37/63
38/63
207/704
270/705
Exports
---------------N/A
N/A
Industry
Value Added
(%)
5.8
-1.1
12.1
3.0
1.8
3.0
3.5
3.8
3.8
4.2
4.1
3.2
3.7
2.1
23/63
278/705
Establishments
(%)
4.5
1.6
1.9
3.0
-3.0
-4.1
0.6
0.9
1.3
1.6
1.0
2.1
2.3
2.7
22/63
272/704
Enterprises Employment
(%)
(%)
3.1
2.6
1.9
8.2
0.5
2.9
1.7
8.5
-4.7
-3.1
-5.1
2.3
0.2
1.1
0.8
2.2
1.5
2.5
1.8
3.1
1.1
1.5
2.0
2.2
2.2
4.0
2.4
2.5
19/63
14/63
209/704
178/705
Exports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Key Ratios
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Sector Rank
Economy Rank
IVA/Revenue
(%)
19.42
19.00
18.10
19.54
18.65
18.44
18.87
18.99
19.07
19.01
18.93
18.88
18.75
19.02
18.65
27/63
570/705
Imports/
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Exports/Revenue
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.
Revenue per
Employee
($’000)
115.49
121.68
116.75
117.79
117.16
124.42
122.46
124.52
125.86
127.82
129.68
133.39
135.60
133.26
135.34
44/63
515/705
Imports
---------------N/A
N/A
Wages
($m)
1,441.3
1,512.5
1,469.9
1,690.0
1,813.8
1,818.9
1,816.3
1,821.9
1,871.7
1,928.6
1,990.4
2,034.2
2,122.5
2,188.5
2,249.8
45/63
445/705
Domestic
Demand
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Number of Pets
- Cats and Dogs
(Million)
143
153
163
154
163
165
171
175
180
184
187
191
195
199
203
N/A
N/A
Imports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Wages
(%)
4.9
-2.8
15.0
7.3
0.3
-0.1
0.3
2.7
3.0
3.2
2.2
4.3
3.1
2.8
22/63
283/705
Domestic
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Number of Pets
- Cats and Dogs
(%)
7.0
6.5
-5.5
5.8
1.2
3.6
2.3
2.9
2.2
1.6
2.1
2.1
2.1
2.0
N/A
N/A
Wages/Revenue
(%)
14.08
13.67
12.80
14.17
14.09
13.73
13.62
13.29
13.21
13.08
12.90
12.63
12.69
12.80
12.64
35/63
457/705
Employees
per Est.
5.60
5.50
5.85
5.91
6.23
6.22
6.64
6.67
6.76
6.84
6.94
6.97
6.98
7.09
7.08
25/63
482/704
Average Wage
($)
16,263.82
16,633.13
14,940.44
16,693.50
16,508.60
17,085.29
16,674.32
16,543.78
16,630.09
16,717.67
16,734.63
16,850.14
17,203.09
17,055.82
17,105.88
49/63
651/705
Share of the
Economy
(%)
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
N/A
40/63
510/705
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Pet Stores in the US February 2012
32
Jargon & Glossary
Industry Jargon
HUMANIZATION A trend where pet owners treat pets
as humans, providing them with services such as pet
hotels and grief counseling.
JUST-IN-TIME (JIT) A strategy implemented to
improve profitability by reducing inventory and
purchasing the raw materials that are needed for the
immediate term only.
IBISWorld Glossary
BARRIERS TO ENTRY Barriers to entry can be High,
Medium or Low. High means new companies struggle to
enter an industry, while Low means it is easy for a firm
to enter an industry.
CAPITAL/LABOR INTENSITY An indicator of how much
capital is used in production as opposed to labor. Level is
stated as High, Medium or Low. High is a ratio of less
than $3 of wage costs for every $1 of depreciation;
Medium is $3 – $8 of wage costs to $1 of depreciation;
Low is greater than $8 of wage costs for every $1 of
depreciation.
CONSTANT PRICES The dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using 2012 as the base year. This removes the
impact of changes in the purchasing power of the dollar,
leaving only the ‘real’ growth or decline in industry
metrics. The inflation adjustments in IBISWorld’s
reports are made using the US Bureau of Economic
Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND The use of goods and services
within the US; the sum of imports and domestic
production minus exports.
EARNINGS BEFORE INTEREST AND TAX (EBIT)
IBISWorld uses EBIT as an indicator of a company’s
profitability. It is calculated as revenue minus expenses,
excluding tax and interest.
EMPLOYMENT The number of working proprietors,
partners, permanent, part-time, temporary and casual
employees, and managerial and executive employees.
ENTERPRISE A division that is separately managed and
keeps management accounts. The most relevant
measure of the number of firms in an industry.
ESTABLISHMENT The smallest type of accounting unit
within an Enterprise; usually consists of one or more
locations in a state or territory of the country in which it
operates.
EXPORTS The total sales and transfers of goods
produced by an industry that are exported.
IMPORTS The value of goods and services imported
with the amount payable to non-residents.
PET BOARDING AND DAY-CARE Long- and short-term
options for owners who need assistance looking after
their pets. Services include feeding, walking, grooming
and lodging.
PET PARENTS Pet owners who are enthusiastic about
their pets and treat them as members of their family.
INDUSTRY CONCENTRATION IBISWorld bases
concentration on the top four firms. Concentration is
identified as High, Medium or Low. High means the top
four players account for over 70% of revenue; Medium
is 40 –70% of revenue; Low is less than 40%.
INDUSTRY REVENUE The total sales revenue of the
industry, including sales (exclusive of excise and sales
tax) of goods and services; plus transfers to other firms
of the same business; plus subsidies on production; plus
all other operating income from outside the firm (such
as commission income, repair and service income, and
rent, leasing and hiring income); plus capital work done
by rental or lease. Receipts from interest royalties,
dividends and the sale of fixed tangible assets are
excluded.
INDUSTRY VALUE ADDED The market value of goods
and services produced by an industry minus the cost of
goods and services used in the production process,
which leaves the gross product of the industry (also
called its Value Added).
INTERNATIONAL TRADE The level is determined by:
Exports/Revenue: Low is 0 –5%; Medium is 5 –20%;
High is over 20%. Imports/Domestic Demand: Low is
0 –5%; Medium is 5 –35%; and High is over 35%.
LIFE CYCLE All industries go through periods of Growth,
Maturity and Decline. An average life cycle lasts 70
years. Maturity is the longest stage at 40 years with
Growth and Decline at 15 years each.
NON-EMPLOYING ESTABLISHMENT Businesses with
no paid employment and payroll are known as
non-employing establishments. These are mostly set-up
by self employed individuals.
VOLATILITY The level of volatility is determined by the
percentage change in revenue over the past five years.
Volatility levels: Very High is greater than ±20%; High
Volatility is between ±10% and ±20%; Moderate
Volatility is between ±3% and ±10%; and Low Volatility
is less than ±3%.
WAGES The gross total wages and salaries of all
employees of the establishment.
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