PetSmart Battles Top Competitors In Race For $123 Billion Pet Market
As pet humanization fuels industry growth, PetSmart faces fierce competition from rival pet specialists and retail giants expanding into pet products and services. By beefing up digital capabilities and veterinary services, PetSmart can defend its leading specialty store position.
Surging Pet Market Attracts New Competitors
The US pet market reached $123 billion in 2022 and continues rapid expansion as millennials become prime pet parenting age. PetSmart carved leadership partly through early mover advantage. But competitors like Petco and Chewy are now chipping away at market share while mass merchants and online channels gain ground.
Pet Market Outlook
| Key Metric | 2022 | 2026 Estimate | CAGR |
|---|---|---|---|
| Total Pet Industry Sales | $123 billion | $156 billion | 4.8% |
| Ecommerce Share | 26% | 34% | 5.5% |
| Pet Healthcare Spending | $34 billion | $44 billion | 5.2% |
With double digit forecasts for online and healthcare, digital capabilities and veterinary services become competitive battlefields.
Direct Specialty Competitors
Petco – $5.8 Billion Brick & Mortar Rival
| Metric | PetSmart | Petco |
|---|---|---|
| 2022 Revenue | $7 Billion | $5.8 Billion |
| 2022 Store Count | 1,650 | ~1,500 |
| 3-Year Revenue CAGR | 4.2% | 12.3% |
Despite 25% fewer locations, Petco‘s growth outpaced PetSmart the past three years on strength of vet services and improved ecommerce. But its heavier debt load poses risks in rising rate environment.
Pet Supplies Plus – $1.3 Billion Regional Player
With over 560 stores in 36 states and specialty in natural foods, PSP is a considerable force. But store count growth has slowed. While online ordering is easy, product assortment lags category killers.
PetFlow – Surging Online Subscription Service
Parent Chewy estimates PetFlow‘s revenue near $31 million in 2021, 30% over 2020. Its personalized, scheduled delivery resonates with multi-pet and busy households. But niche focus limits mass appeal.
Mass Retail & Ecommerce Threats
Industry analysts estimate Amazon now controls 55% of online pet product sales despite lacking specialty. Walmart and Target expand in-store and online pet assortments to attack the category.
Top 3 Online Pet Product Sellers
| Retailer | Est. 2022 Pet Revenue | Total 2022 Revenue |
|---|---|---|
| Amazon | $9 Billion | $502 Billion |
| Chewy | $8 Billion | $8 Billion |
| PetSmart | $1.5 Billion | $7 Billion |
Chewy lacks brick-and-mortar presence but leads online specialty. PetSmart digital still small part of total sales.
Outlook: Vet Services And Digital Can Counter Rivals
Despite economic clouds, the US pet market should continue robust 5% average annual growth. To defend lead specialty position, PetSmart is expanding veterinary hospitals to drive visits and loyalty. Enhancing buy-online, pick up in-store and personalized digital experiences is also critical to better compete with Amazon and mass merchants.
With over 90 million US pet-owning households, there‘s room for multiple players. But extreme fragmentation makes differentiation key. As healthcare becomes more vital, PetSmart can lean into services. Its wide assortment, competitive prices and established brand give advantage over independent chains. But Petco, Chewy and big boxes will remain fierce challengers vying for consumer spend and pet parent mindshare. PetSmart retains pole position for now but must continue upping its digital game.
