Grocers Cater to the Not-So-Secret Lives of Pets

Pet ownership grew by 4% in the U.S. in 2020, according to research by Packaged Facts. This has been especially good news for supermarkets, says David Lummis, pet market analyst for the Rockville Md.-based company, because it’s meant more customers buying for their animals, and with many reducing shopping trips during the pandemic, they are buying more of these products in traditional grocery stores.

“Pet sales have continued to show strong growth across multiple pet categories,” says Joe McQuesten, SVP of fresh and center store merchandising for Grand Rapids, Mich.-based SpartanNash.

To meet the needs of new pet parents, SpartanNash has ensured it offers “a full assortment with everything a new pet owner would need,” he says—from absorbent training pads, litter boxes, kitten food and puppy chow to toys, treats and food for senior pets.

Sales in the pet department at K-VA-T and its Food City stores are up, says Dan Glei, EVP of merchandising/marketing, but the area that’s seen “absolutely stunning growth” is refrigerated pet food, which jumped about three times the industry average last year.

Specialty pet foods are doing well too. “They’ve become more mainstream,” he says. “There’s a premiumization of this category because people absolutely love their pet kids without question.” Conversely, the lower-end priced products in pet food are also thriving, Glei says, but “it’s the middle of the market that’s doing less well.”

“There’s an increased focus on health and wellnesss, which benefits natural foods and science-based foods,” says Lummis of Packaged Facts. “More and more of the pet food products are making those kinds of veterinarian-approved claims.”

Healthier pet food and organic brands are seeing about a 12% increase in sales, whereas other pet food is closer to 3%, according to Retail Dive and Mintel.

“Higher-end stores should be looking at what’s new and different to attract the attention of that shopper,” says Aimee Becker, SVP of strategic advisory for Daymon, a private-label development firm in Stamford, Conn. But at the same time, those stores should consider the lower end of the market, too, to avoid alienating either shopper, Becker says.

Moises Tovar is the grocery buyer at Harmons, West Valley City, Utah, and has been making significant changes to his pet department to offer food that’s “more natural, more specialty, cleaner label,” he says.

Over the past year, Harmons has introduced frozen raw food to its pet departments, starting with one four-foot freezer, and has doubled the space it devotes to refrigerated food. Tovar has also started carrying antler bones, whole and split, which are doing very well, and duck heads and necks. But it’s important to retain the conventional products, he says: “As much as I want to move consumers to specialty, some [people] don’t want to, and these things do get very pricey.”

Tovar also brought in new leashes and harnesses and by the middle of this year, he’ll be introducing a wellness line to the pet category with supplements for animals.

At Purina, the better-for-you trend is driving sales, says Joe Toscano, VP of trade and industry development for the St. Louis, Mo.-based brand. “Retailers need to show shoppers they have superpremium products on their shelf and can meet their needs regardless of what price tier the consumer chooses to shop,” he says. “People are very interested in what they feed their four-legged family members, which means they want to know what’s in the food as well as what’s not in the food.”

There’s an opportunity in this upscaling of pet food, says Amanda Lai, manager with McMillanDoolittle, a Chicago-based retail consultancy. Stores with strong foodservice sales could start making and selling house-made fresh pet food. “Supermarkets have existing kitchen facilities, easy access to fresh ingredients, delivery capabilities, and high customer shopping frequency to support offering food for both humans and pets,” she says.

There’s also an upscaling in cat litter, Toscano says, and this category is seeing double-digit sales increases. “We’re seeing a trend toward enhanced litter,” he says. “Cat owners … are constantly on the hunt for added benefits their litter can deliver. Consumers are willing to spend more for products that perform. Highlight the premium lightweight and natural litters in aisle to capitalize on that trend.”

But with consumers making fewer trips to the store, sales of larger sizes are also doing well, including variety packs of food and larger pails of litter. “With fewer trips to the store, ensure you have adequate stock on these larger sizes to increase customer loyalty,” he says.

Tail-Wagging Technology

To boost sales of pet products, K-VA-T makes use of its Symphony RetailAI. “It helps us find the customers who have the propensity to shop those products but don’t, such as someone who buys cat litter from us but not cat food,” says Glei.

And K-VA-T also has a pet club and sends out mailers specifically to these shoppers. “We do what we can to tell people about the category,” Glei says. “It’s an opt-in club, and they get regular offers; it continues to build awareness.” The chain also uses the weekly flyer, email, digital offers and register receipts to boost pet sales.

E-commerce is a great platform for selling large, heavy items such as big bags of dog food and cat litter. “Litter lends itself well to the e-comm purchase,” says Toscano of Purina. “It’s bulky and typically very heavy. If you can get consumers to buy litter on your e-comm platform and get them on an auto replenish cycle, you can gain loyalty from that consumer.”

And these are great customers to have, he adds: “Online pet shoppers spend almost twice as much as in-store-only pet shoppers. The opportunity to capture the ever-valuable online pet shopper lies in store-based retailers developing an in-store strategy that drives awareness of your online pet solutions.”

According to Packaged Facts, pet e-commerce sales were projected to increase from 22% to 27% in 2020. E-commerce is prime for pet products, says Lummis: “Pet owners are discovering they no longer have to lug these heavy products to and from the car, and shelf-stable products can easily be delivered, stored and stockpiled.”

Merchandising

K-VA-T cross-merchandises some pet products, such as putting them on endcaps for one- or two-day sales, during which they do well, Glei says, and during holidays, he’ll put shippers with pet toys in the seasonal aisle.

At Harmons, Tovar is working on providing pet education, including clings for the refrigerators and freezers in this aisle, with information such as the differences between raw and cooked food.

And he does constant promos for pet food—sometimes weeklong or one- or three-month ad programs. He markets these through the flyer, the website and in-aisle.

SpartanNash partners with its suppliers to run weekly promotions and monthly price reductions on pet products, but “digital, print and in-store promotions remain crucial to attracting and retaining consumers,” says McQuesten. “Our pet club and special events create an exciting shopping experience within pet and throughout the store.”

It also merchandises throughout the store, on shippers and floor displays, and for seasonal specials, the displays are put in high-trafficked areas, seasonal areas or near the registers, McQuesten says.

Tim Dornfeld, category manager for KeHE Distributors in Naperville, Ill., recommends retailers place items such as dog treats or cat litter on off-shelf displays like endcaps, clip strips or merchandisers at the register. “Those tend to be impulse purchases and are a simple way to gain incremental sales,” he says. “Having these items around the store can also build awareness of the category.”