HUTCHINSON, Kan. -- Dillon Stores here is finding that large items for "man's best friend" are providing the chain with high-ticket merchandise that is in demand by its customer base.
Dillon has added 80-foot-long shelves over both sides of its pet food aisle for a new 50-item mix of larger pet accessories. The merchandise retails from $20 to $80, with most items priced about $25. Dillon's mix of larger supplies includes plastic dog houses and litter boxes, and dog feeders that automatically dispense up to 25 pounds of food. The retailer rolled out the concept to 41 of its 66 stores in January, following a successful four-month test at five units last fall, according to a local observer. A Dillon spokesman declined to comment on the new section. Jim Clary, executive vice president for Petco, Springfield, Mo., a rack jobber, said Dillon's expansion demonstrates how changing lifestyles have helped the pet category.
"As people age and their kids move out, they're acquiring a pet to fill the empty nest syndrome. And with their children grown these consumers have the money to lavish on their pets," Clary added. According to the observer, the bulkier items -- typically animal carriers and dog houses, cat scratching posts and pet beds too large for peg-hooking in the regular 4- to 28-foot pet supply section -- are displayed on a new top shelf over the pet food gondolas on both sides of the pet aisle. Point-of-purchase signs are used to herald the expanded accessories variety.
"With pet foods on both sides of the pet food aisle now, a shopper can't help noticing the expanded pet accessories there," added the observer. Dillon is experiencing strong sell-through with pet carriers priced between $7 and $50 in any size or color, said the observer. Based on the test store results, the new items should reach an annual turn rate of about five, which the observer said is high for a supermarket.
Margins on Dillon's smaller pet accessories, such as dog and cat collars and dog bones, are in the low to mid 40% range.
