Does Petco Own Chewy In 2024?

With 82 million households owning a pet in the US, the pet care industry is booming. As the two largest players competing in this space, Petco and Chewy often get compared when it comes to market share and future growth strategies. But do these two pet retail giants have any direct relationship? No, Petco does not currently own Chewy.

While Petco made efforts to acquire Chewy a few years ago, the digital-first company remains fully independent today. However, it’s useful to understand the ownership history behind both brands.

Chewy Dominates Online Pet Product Sales

Chewy generated $8.9 billion in net sales in 2022, representing a 15.2% year-over-year increase. With its laser focus on the ecommerce channel, Chewy has quickly become the preeminent destination for online pet product shopping.

Approximately $6.3 billion of Chewy’s 2022 sales came directly from its website and mobile app. Chewy’s Autoship subscription program for automatic product deliveries further entrenches customer loyalty. Over 70% of Chewy’s sales in 2022 were generated from Autoship customer orders.

Compare that to Petco, who reported $4.9 billion in total company revenue last year. While Petco does not break out ecommerce sales, they are estimated to account for around just 20% of total revenue. With brick-and-mortar still the priority, Petco lags well behind Chewy for share of online pet product spending.

Current Ownership Structures

Today, publicly traded Chewy operates as an independent company after going public in 2019. The firm has a $5 billion market capitalization as of March 2023.

Chewy’s largest shareholders are:

• BC Partners – 24%
• Morgan Stanley – 12.1%
• Baillie Gifford & Co – 5.8%

Previously, PetSmart acquired Chewy in 2017 for $3.35 billion in what was the largest ecommerce acquisition ever at the time. PetSmart made the decision to IPO a portion of its stake in Chewy to help pay down acquisition debt.

Petco is also publicly traded with a $2.5 billion market cap. The company went public in early 2021, with the largest shareholders being private equity firms CVC Capital Partners and Canada Pension Plan Investment Board.

Pet Brands Each Company Owns

Both retailers have prioritized building out their exclusive owned and private label brands to differentiate their product selections and improve margins. However, Chewy’s brands seem to focus more on pet nutrition, while Petco skews towards pet supplies.

The Crucial Distinction Between Petco and Chewy

While Petco and Chewy occupy the #1 and #2 spots in overall US pet retail market share today, they operate very distinct business models.

Petco aims to leverage its brick-and-mortar scale and convenient neighborhood locations to drive ecommerce growth through initiatives like BOPUS (buy online, pickup in-store).

Chewy is all-in on its digital-first positioning and expertise in subscriber shopping experiences. Its competitive edge lies in personalized customer service and speedy shipping.

As the pet market continues expanding, there’s likely room for both strategies to flourish. But Chewy has undoubtedly captured the leading share of pet ecommerce spending, while Petco relies more heavily on physical stores.

Does Petco Want to Acquire Chewy?

In the past few years, Petco did explore a potential deal to acquire Chewy to accelerate its online business. However, with Chewy’s sales outpacing Petco’s overall and its $5 billion market value today, acquiring Chewy is likely no longer feasible for Petco.

Nonetheless, Petco could attempt to make another run at Chewy if its smaller size poses future growth constraints, especially as younger demographics gravitate towards online pet shopping.

For now, Chewy remains fully independent of Petco ownership and is dominating the ecommerce segment that Petco has struggled to keep pace with. But the battle for pet retail supremacy between these two competitors will pressing forward for years to come.