With more than half of U.S. households owning furry -- and not so furry -- critters, supermarkets are capitalizing on the popularity of pet ownership.
Chains like Big Y Foods, Springfield, Mass.; A&P, Montvale, N.J., Victory Super Markets, Leominster, Mass.; and Acme Markets, Malvern, Pa., have dedicated space to large pet centers that are crammed with a wide variety of profitable pet supplies. These pet care projects are being pursued to capitalize on an industry that has grown into a $20 billion business.
"Our investment in 136 feet of space for pet supplies in our Paws Professional Pet Food Centers has been worth the effort," said Jan Winn, director of health and beauty care and general merchandise for Big Y.
Big Y's four Paws centers carry 1,800 more items than they did just a year ago. Sales of pet food and supplies "are very strong in those stores. Customers can find the products and variety they'd get in the pet superstores," she added.
Winn said the pet category is managed similarly to other departments, with the various sections within the department micromanaged. In order to maintain sales, however, supermarkets must continually fine-tune their pet selection and be sensitive to emerging trends.
"Reptiles now are a very big business. We're trying to stay on top of that trend. Ferrets also have been legalized in Massachusetts, and so we're trying to figure out the needs for these animals," Winn noted.
"Indeed, grocery chains are successfully competing with mass merchants and large pet superstores to capture a larger chunk of this burgeoning pet supply market," said Michael Sleeper, president of Imperial Distributors, Auburn, Mass., which provides service merchandise for pet supplies.
"Supermarket operators have found the investment in space for large destination centers is worthwhile and productive -- and they have discovered pet owners are very good customers," added Sleeper.
The number of pets in U.S. households reached 58 million last year, representing 59% of all U.S. households, according to the American Pet Products Manufacturers Association, Greenwich, Conn. This share grew from 56% in 1994.
As pet ownership increased, supermarket pet supply sales last year totalled $465.9 million, a 0.5% gain over the previous year for the 52-week period ended Dec. 31, 1996, according to Information Resources Inc., Chicago.
Of the total $20 billion pet care market, $10 billion is spent on dog and cat food, while $7 billion is spent on pet products. The balance goes for veterinary and grooming services, said Funda Alp, APPMA communications director.
"And about 25% of the total category, or $5 billion, is usually spent during the fourth quarter," added Alp.
At almost all Imperial's supermarket accounts, pet supply sales growth has outstripped other general merchandise categories, according to Sleeper. "At Stop & Shop [Cos., Quincy, Mass.,] for instance, pet supplies were enlarged from [a range of] 48 to 72 feet of space, to 120 liner feet," Sleeper said.
According to the supplier, pet supplies account for 20% to 45% of overall pet display space at Imperial's supermarket accounts.
"Some supermarkets that devote 100 feet or more of space to pet supplies generate from $25 to $55 in sales per linear foot in the segment," said Sleeper.
"Pet general merchandise sales at Demoulas SuperMarkets, Tewksbury, Mass., last year, for example, more than doubled at the 57-store chain after pet care display space increased 25% to 33%," he said.
Pet accessories also aren't as price-sensitive as other nonfood. And their 35% to 40% margins allow supermarkets to football pet food through low-promotion retails, explained Steve DiGeronimo, health and beauty care and general merchandise buyer at the 16-store Victory Super Markets chain.
Victory allocates increasingly larger sets to the pet supply segment and devotes 120 linear feet to pet general merchandise in its Kingston, Mass., store.
After opening four, 92-foot-long Pet Shop centers in the metropolitan New York region under the A&P name, and eight or nine in the Super Fresh Markets division in the Philadelphia area during the past year, officials at A&P's headquarters continue to evaluate the merchandising concept.
"Although these large pet centers are going into new stores, the concept is still being tested," said Michael Rourke, senior vice president of communications and corporate affairs.
Chains in other areas around the nation are putting in larger pet care departments. In answer to the rising competition from giant-size pet superstore formats, Fred Meyer Inc., Portland, Ore., opened 12, 2,000- to 3,000-square-foot Pet Centers last year. The chain plans 13 more this year.
"Large pet sections are an important part of our nonfood merchandising strategy," said a spokesman for the chain.