Pet Stores in the US February International Trade 17 Business Locations. 19 Competitive Landscape

Transcription

1 Pet Stores in the US February IBISWorld Industry Report Pet Stores in the US February 2012 Caitlin Moldvay 2 About this Industry 2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources 3 Industry at a Glance 4 Industry Performance 4 Executive Summary 4 Key External Drivers 5 Current Performance 8 Industry Outlook 11 Industry Life Cycle 13 Products & Markets 13 Supply Chain 13 Products & Services 14 Demand Determinants 15 Major Markets 16 International Trade 17 Business Locations 19 Competitive Landscape 19 Market Share Concentration 19 Key Success Factors 20 Cost Structure Benchmarks 21 Basis of Competition 22 Barriers to Entry 23 Industry Globalization 24 Major Companies 24 PetSmart Inc. 25 PETCO Animal Supplies Inc. 28 Operating Conditions 28 Capital Intensity 29 Technology & Systems 29 Revenue Volatility 30 Regulation & Policy 30 Industry Assistance 31 Key Statistics 31 Industry Data 31 Annual Change 31 Key Ratios 32 Jargon & Glossary info@ibisworld.com

2 Pet Stores in the US February About this Industry Industry Definition Main Activities The primary activities of this industry are 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 Veterinary Services in the US Establishments in this industry provides veterinary services Pet Grooming & Boarding in the US Operators in this industry provide pet grooming and boarding services a E-Commerce & Online Auctions in the US Businesses in this industry retails pet foods and pet supplies via the internet b 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 American Pet Products Association Pet Age Magazine Pet Business The Humane Society of the United States

3 Pet Stores in the US February Industry at a Glance Pet Stores in 2012 Key Statistics Snapshot Revenue $14.7bn Annual Growth % Profit $634.1m Wages $1.9bn Annual Growth % Businesses 13,730 Market Share % change Revenue vs. employment growth Millions Number of pets (cats and dogs) Year Year Revenue Employment p. 24 Products and services segmentation (2012) SOURCE: Key External Drivers Number of pets (cats and dogs) 10.2% Pet services 4.5% Live animals Per capita disposable income External competition Number of households 27.3% Pet supplies 58% Pet food p. 4 SOURCE: SOURCE: Industry Structure Life Cycle Stage Growth Revenue Volatility Low Capital Intensity Low Industry Assistance None Concentration Level High Regulation Level Technology Change Barriers to Entry Industry Globalization Competition Level Medium Medium Medium Low Medium FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 31

4 Pet Stores in the US February Industry Performance Executive Summary Key External Drivers Current Performance Industry Outlook Life Cycle Stage Executive Summary Key External Drivers Number of pets (cats and dogs) Per capita disposable income External competition

5 Pet Stores in the US February Industry Performance Key External Drivers continued Number of households Number of pets (cats and dogs) Per capita disposable income 4 2 Millions % change Year Year SOURCE: Current Performance Growth during the recession

6 Pet Stores in the US February Industry Performance Growth during the recession continued Part of the family

7 Pet Stores in the US February Industry Performance Product innovation Competition from bigger stores

8 Pet Stores in the US February Industry Performance Competition from bigger stores continued Industry Outlook % change Industry revenue Year SOURCE:

9 Pet Stores in the US February Industry Performance Industry Outlook continued Premium products will remain popular Changing competition

10 Pet Stores in the US February Industry Performance Changing competition continued

11 Pet Stores in the US February Industry Performance Life Cycle Stage % Growth of profit/gdp Maturity Company consolidation; level of economic importance stable Quality Growth High growth in economic importance; weaker companies close down; developed technology and markets Key Features of a Growth Industry Revenue grows faster than the economy Many new companies enter the market Rapid technology & process change Growing customer acceptance of product Rapid introduction of products & brands E-Commerce & Online Auctions Quantity Growth Many new companies; minor growth in economic importance; substantial technology change 5 0 Mail Order Shake-out Pet Stores Veterinary Services Animal Food Production Toy, Doll & Game Manufacturing 5 Decline Crash or Grow? Shake-out Potential Hidden Gems Future Industries Time Wasters Hobby Industries % Growth of establishments SOURCE:

12 Pet Stores in the US February Industry Performance Industry Life Cycle This industry is Growing

13 Pet Stores in the US February Products & Markets Supply Chain Products & Services Demand Determinants Major Markets International Trade Business Locations Supply Chain KEY BUYING INDUSTRIES 99 Consumers in the US The Pet Stores industry relies on consumers to purchase pet products and to utilize industry services. KEY SELLING INDUSTRIES Animal Food Production in the US This industry supplies pet stores with a vast array of pet food Toy, Doll & Game Manufacturing in the US This industry supplies pet toys and accessories to industry operators Veterinary Services in the US This industry provides veterinary care services such as vaccinations to industry operators. Products & Services Products and services segmentation (2012) 10.2% 4.5% Live animals Pet services 27.3% Pet supplies 58% Pet food Total $14.7bn Pet food SOURCE: Pet supplies

14 Pet Stores in the US February Products & Markets Products & Services continued Services Pet ownership segmentation in the US (2011) Animal Share of total pets (%) Birds 4.3 Cats 22.9 Dogs 20.7 Horse 2.1 Freshwater Fish 40.0 Saltwater Fish 2.3 Reptiles 3.4 Small Animals 4.2 SOURCE: AMERICAN PET PRODUCTS ASSOCIATION Live animal purchases Demand Determinants Pet ownership

15 Pet Stores in the US February Products & Markets Demand Determinants continued Income Demographics and lifestyle Major Markets Major market segmentation (2012) 7% Consumers over 65 years old 10% Consumers under 25 years old 13% Consumers 55 to 64 years old 28% Consumers 45 to 54 years old Total $14.7bn 18% Consumers 25 to 34 years old 24% Consumers 35 to 44 years old SOURCE:

16 Pet Stores in the US February Products & Markets Major Markets continued International Trade

17 Pet Stores in the US February Products & Markets Business Locations 2012 West AK 0.2 New England West CA 13.2 WA 3.1 MT 0.3 OR 2.0 NV 0.9 Rocky Mountains ID 0.5 UT 0.7 AZ 2.2 WY 0.3 CO 2.6 NM 0.6 ND Plains NE 0.5 MN WI SD 0.2 KS 0.9 Southwest TX 5.6 OK 0.9 MO 1.9 Great Lakes 1.9 MI 3.5 PA 4.4 IA OH IL IN VA WV KY 0.7 AR 0.5 MS 0.4 LA 1.0 TN 1.5 Southeast AL 1.0 Mid- Atlantic GA 2.2 NY NC 2.5 SC 1.3 FL ME West HI 0.4 Additional States (as marked on map) 1VT 2 NH 3MA 4 RI CT 6 NJ 7DE MD DC Establishments (%) Less than 3% 3% to less than 10% 10% to less than 20% 20% or more SOURCE:

18 Pet Stores in the US February Products & Markets Business Locations Southeast West Mid-Atlantic % Establishments vs. population West Great Lakes Establishments Population Mid-Atlantic New England Plains Rocky Mountains Southeast Southwest SOURCE: Great Lakes

19 Pet Stores in the US February 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 this industry is High Companies by employment size No. of employees Share (%) Statistics of US Businesses SOURCE: US CENSUS BUREAU Key Success Factors IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are: Attractive product presentation Experienced work force Proximity to key markets Economies of scope Effective quality control

20 Pet Stores in the US February Competitive Landscape Cost Structure Benchmarks Sector vs. Industry Costs Average Costs of all Industries in sector (2012) Industry Costs (2012) Percentage of revenue Profit Wages Purchases Depreciation Marketing Rent & Utilities Other SOURCE:

21 Pet Stores in the US February Competitive Landscape Cost Structure Benchmarks continued Basis of Competition Level & Trend Competition in this industry is Medium and the trend is Increasing Internal

22 Pet Stores in the US February Competitive Landscape Basis of Competition continued External Barriers to Entry Level & Trend Barriers to Entry in this industry are Medium and Steady Barriers to Entry checklist Competition Concentration Life Cycle Stage Capital Intensity Technology Change Regulation & Policy Industry Assistance Level Medium High Growth Low Medium Medium None SOURCE:

23 Pet Stores in the US February Competitive Landscape Barriers to Entry continued Industry Globalization Level & Trend Globalization in this industry is Low and the trend is Steady

24 Pet Stores in the US February 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% SOURCE: Player Performance PetSmart Inc. Market share: 44.3% Financial performance

25 Pet Stores in the US February Major Companies Player Performance continued PetSmart Inc. financial performance Year* Revenue ($ million) (% change) Net Income ($ million) (% change) Employees (% change) , ,000 N/C , , , , , , * 6, , * 6, , *Estimates SOURCE: ANNUAL REPORT AND IBISWORLD Player Performance PETCO Animal Supplies Inc. Market share: 20.7%

26 Pet Stores in the US February Major Companies Player Performance continued Financial performance Petco Animal Supplies Inc. financial performance* Year Revenue ($ million) (% change) Employees (% change) , , , , , , , , * 2, , * 3, , *Estimates SOURCE: FORBES.COM Other Companies Pet Supplies Plus Estimated market share: 3.6%

27 Pet Stores in the US February Major Companies Other Companies continued Pet Supermarket Inc. Estimated market share: 1.6% Pet Food Express Estimated market share: Less than 1.0%

28 Pet Stores in the US February Operating Conditions Capital Intensity Technology & Systems Revenue Volatility Regulation & Policy Industry Assistance Capital Intensity Level The level of capital intensity is Low Capital intensity Capital units per labor unit Economy Retail Trade Pet Stores Dotted line shows a high level of capital intensity SOURCE: Tools of the Trade: Growth Strategies for Success New Age 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. Investment Economy Information, Communications, Mining, Finance and Real Estate. To increase revenue firms need superior debt management, a stable macroeconomic environment and a sound investment plan. Labor Intensive 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. Veterinary Services Pet Stores E-Commerce & Online Auctions Mail Order Animal Food Production Old Economy Toy, Doll & Game Manufacturing 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. Capital Intensive Change in Share of the Economy SOURCE:

29 Pet Stores in the US February Operating Conditions Capital Intensity continued Technology & Systems Level 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. Revenue volatility* (%) Volatility vs Growth 1000 Hazardous Rollercoaster Pet Stores Stagnant Blue Chip Five year annualized revenue growth (%) * Axis is in logarithmic scale SOURCE:

30 Pet Stores in the US February Operating Conditions Revenue Volatility continued Regulation & Policy 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 Low rate High rate Saddlery and harness for any animal (excluding dogs see above) Dog leashes, collars, muzzles, harnesses and similar Pet food SOURCE: USITC

31 Pet Stores in the US February Key Statistics Industry Data Revenue ($m) Industry Value Added ($m) Establishments Enterprises Employment Exports Imports Wages ($m) Domestic Demand Number of Pets - Cats and Dogs (Million) , , ,835 13,790 88, ,441.3 N/A , , ,541 14,213 90, ,512.5 N/A , , ,813 14,483 98, ,469.9 N/A , , ,130 14, , ,690.0 N/A , , ,638 14, , ,813.8 N/A , , ,110 14, , ,818.9 N/A , , ,411 13, , ,816.3 N/A , , ,509 13, , ,821.9 N/A , , ,658 13, , ,871.7 N/A , , ,875 13, , ,928.6 N/A , , ,145 13, , ,990.4 N/A , , ,316 14, , ,034.2 N/A , , ,680 14, , ,122.5 N/A , , ,086 14, , ,188.5 N/A , , ,575 15, , ,249.8 N/A 203 Sector Rank 42/63 40/63 41/63 37/63 38/63 N/A N/A 45/63 N/A N/A Economy Rank 412/ / / / /705 N/A N/A 445/705 N/A N/A Annual Change Revenue (%) Industry Value Added (%) Establishments (%) Enterprises (%) Employment (%) Exports (%) Imports (%) Wages (%) Domestic Demand (%) Number of Pets - Cats and Dogs (%) N/A N/A 4.9 N/A N/A N/A -2.8 N/A N/A N/A 15.0 N/A N/A N/A 7.3 N/A N/A N/A 0.3 N/A N/A N/A -0.1 N/A N/A N/A 0.3 N/A N/A N/A 2.7 N/A N/A N/A 3.0 N/A N/A N/A 3.2 N/A N/A N/A 2.2 N/A N/A N/A 4.3 N/A N/A N/A 3.1 N/A N/A N/A 2.8 N/A 2.0 Sector Rank 14/63 23/63 22/63 19/63 14/63 N/A N/A 22/63 N/A N/A Economy Rank 207/ / / / /705 N/A N/A 283/705 N/A N/A Key Ratios IVA/Revenue (%) Imports/ Demand (%) Exports/Revenue (%) Revenue per Employee ($ 000) Wages/Revenue (%) Employees per Est. Average Wage ($) Share of the Economy (%) 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 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 Sector Rank 27/63 N/A N/A 44/63 35/63 25/63 49/63 40/63 Economy Rank 570/705 N/A N/A 515/ / / / /705 Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data. SOURCE:

32 Pet Stores in the US February 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. 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. 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. 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.

33 Identify high growth, emerging & shrinking markets Arm yourself with the latest industry intelligence Assess competitive threats from existing & new entrants Benchmark your performance against the competition Make speedy market-ready, profit-maximizing decisions Who is IBISWorld? We are strategists, analysts, researchers, and marketers. We provide answers to information-hungry, time-poor businesses. Our goal is to provide real world answers that matter to your business in our 700 US industry reports. When tough strategic, budget, sales and marketing decisions need to be made, our suite of Industry and Risk intelligence products give you deeply-researched answers quickly. IBISWorld Membership IBISWorld offers tailored membership packages to meet your needs. Disclaimer This product has been supplied by IBISWorld Inc. ( IBISWorld ) solely for use by its authorized licenses strictly in accordance with their license agreements with IBISWorld. IBISWorld makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein. Copyright in this publication is owned by IBISWorld Inc. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the material in this publication in papers, reports, or opinions prepared for any other person it is agreed that it will be sourced to: IBISWorld Inc. Copyright 2012 IBISWorld Inc