Walmart dominates the grocery market. Can it conquer pet services too?

The news: Walmart is opening a dedicated pet service center that will offer veterinary care and dog grooming in an Atlanta suburb, according to CNBC. The center will have its own dedicated entrance next to the store.

  • Although the retailer considers the center a pilot project, it plans to open several more pet service locations within the next year.
  • The pet services center will be named after Walmart, but employees of the veterinary care and pet products company PetIQ will staff it.

The expansion of pet services comes at a time when about two in three consumers (66%) own a pet, according to the American Pet Products Association, and pet owners (or pet parents , as some call themselves) care for them more and more (and expenses) like members of the family.

The landscape: OUR forecast expects pet product sales to increase 6.6% to $78.34 billion. But growth has been on a downward trajectory since peaking at 27.0% in 2021, at the height of the pandemic-fueled pet boom.

  • Petco CEO Ron Coughlin suggested earlier this year that the pet supplies industry was “inflation resistant» because pet owners continue to have to feed and care for their pets even when prices rise. But the category is not immune to economic pressure as several pet-related retailers, including Petco and soft, recently noted a growing share of customers switching to cheaper foods.
  • Coughlin’s comments were perhaps more true about pet services, given that most consumers will continue to take their pets to the vet and have them groomed to keep them healthy, even if they are reluctant to buy another expensive toy or treat.
  • This point is not lost on Walmart. Kaitlyn Shadiowvice president of pet merchandising at Walmart US, highlighted to CNBC a Morgan Stanley study that found that about 40% of the pet industry’s total revenue is generated by high-margin services .

The strategy: Walmart has a long history of using low margin grocery store to regularly attract consumers to its stores (or, increasingly, to its website and/or app).

  • Pet services can serve a similar purpose since pets regularly need their nails trimmed and their coats groomed.
  • The retailer already stocks the best pet medications in its Walmart pharmacies and offers pet telehealth visits as part of its Walmart+ subscription service.

The big point to remember: Walmart is far from alone among retailers taking note of this trend. During the last years, Kohl’s added pet items to some stores, Lowes expanded its Petco Health and Wellness store within a store, and Petco rolled out a new concept aimed at serving small towns and rural communities.

  • But given its broad product line, Walmart is in a unique position to leverage its pet-related offerings, using its services to attract new customers whose spending can span a wide range of products .

Go further: Listen to a recent episode of our “ ” dedicated to the pet industry.Behind the numbers: reinventing retail” podcast.


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