Commentary
With our recent post, “Pet-owning households on decline while spending remains strong” <Link> still resonating, we stepped back to the comments on quarterly reports from pet retailers Chewy and Petco. Gabrielle Fonrouge summarized key points from the respective earnings reports commenting, “Pet health care will be key to whether the companies can grow and make higher profits over the longer term.”
All things considered, one has to wonder what has happened to all the hopeful chatter about serving a larger percentage of pets who don’t routinely receive veterinary care.
Source: CNBC, March 23, 2023. Link. “As consumers continue to focus on wellness and seek more ease to meet all of their needs, branching into pet health is a positive avenue for growth for both of the companies.” – Jessica Ramirez, analyst
Vet customers are demonstrating a 2.3 times higher lifetime value than non-vet customers.” – Ron Coughlin, Petco CEO
INSIGHTS: We noted these comments as important for the traditional veterinary practice and animal health pros to understand:
- Chewy boasts the largest pet pharmacy in the U.S.
- Chewy is aggressively building out its telehealth verticals, pet insurance and pharmacy
- Petco boasts 247 hospitals with veterinary presence now in 90 percent of stores
- Pet health care is referenced as a high-margin business
- The footprint of independent veterinary providers is dwindling
- Pet insurance has very little penetration in the U.S. compared to other markets