Competition in the growing pets market is likely to step up as etailer Ocado launches a standalone site.
Why are we talking about it?
Etailer Ocado is muscling into the growing pets market with the launch of a dedicated transactional website next month. Named Fetch, the site will offer products such as food and accessories, with 5,000 SKUs available, and will provide veterinary information.
Ocado non-food director James Matthews says the grocer wants to capitalise on the developing market. “Online pet retail is growing quickly and our range will rival that of a specialist independent or veterinary surgery,” he says.
Who else is in the market?
All the big grocers including Tesco, Asda and Sainsbury’s dedicate significant space to pet products. Figures from Euromonitor show that supermarkets and hypermarkets account for 50% of the £4bn market. Dedicated pet shop chains are few and far between.
Pets at Home is an obvious exception and its sales increased 7.1% to £544.3m in its last financial year. It has 300 stores. Jollyes, a pet food superstore group, operates 54 shops. The sector is also catered for by independent shops selling products and live animals.
Why is the category booming?
Euromonitor has attributed growth in the market to the “humanisation of pets”, leading to owners investing more in specialist food for their animals, which is driving growth in vitamins and supplement categories.
While consumers have been buying smaller dogs, leading to a fall in the volume of dog food sold, volume sales of food for cats, small mammals and reptiles has increased because there are more single households with pets as companions.
The growing market has led to a proliferation of services. Mobile grooming, pet funerals and dog spas have increased in popularity as owners take a parent-like approach to their pets.
How are retailers reacting to growth in the sector?
As Ocado’s venture shows, retailers are keen to take a share of this market. Over the past year, Pets at Home has signalled its intent to become an even more dominant player, having acquired equestrian products supplier Ride-Away in December 2012. Set up 33 years ago, the online and catalogue business reported £6.7m in sales in 2011. In April, Pets at Home hit the acquisition trail again, this time snapping up 93-strong standalone veterinary practice Vets4Pets. The acquisition builds on its existing veterinary practice chain, Companion Care. Competition looks likely to heat up in the increasingly lucrative market.
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