Walmart is piloting a pet services center in an Atlanta suburb, but plans to open more locations in other parts of the country.
Walmart
In the move, the nation’s largest grocer is building on its traditional pet business. It has sold pets for decades, including Ol’ Roy, its private label dog food named after Walmart founder Sam Walton’s English setter.
But with the new facility, Walmart will dip its toe into a more lucrative part of the pet industry: health care and other services. The company already stocks leading pet medications in its Walmart pharmacies.
Walmart’s pet service center will have its own dedicated entrance next to a store. It will carry the Walmart name, but will be staffed by employees of veterinary care and pet product company PetIQ. PetIQ has leased space for veterinary clinics inside more than 65 Walmart stores, after opening its first in 2016.
The Georgia location will serve as a pilot, but Walmart plans to open more locations, said Kaitlyn Shadiow, vice president of pet merchandising for Walmart US. She declined to say how many pet shops there might be. it but Walmart says it plans to open more soon. years, if not sooner.
“We know that pet services are an important need for our customers and we want to be able to provide that all in one place,” he said. He cited a Morgan Stanley study that found that about 40% of total revenue in the pet industry is driven by services.
As Americans treat their dogs, cats and other animals like family members, more retailers are chasing the expanding pool of dollars consumers spend on vet bills or fashion-forward leashes or other accessories.
Those include Kohl’s, which has begun dedicating space to pet items in some stores, and Lowe’s, which announced it is expanding mini Petco Health and Wellness shops and mobile vet services to more stores after testing the concept .
Walmart is starting to offer pet services while other retailers, including Chewy and Petco, are also pursuing opportunities to offer veterinary care.
Walmart
US consumers spent $136.8 billion on pets last year, according to industry group the American Pet Products Association. That large market includes a long list of expenses, such as food and treats, boarding, dog walking and veterinary care. After food and pet treats, veterinary care and products are the second-biggest industry driver – reaching $35.9 billion last year, according to APPA.
As the Covid-induced pet boom winds down and consumers buy less pet toys and supplies, both Chewy and Petco look to pet health care to advance their futures — especially as they grow the pandemic puppies and other pets.
Retailers consider the pet space, like items for children, an attractive area because consumers are often willing to spend when their budgets are tight or the economy hits a rough patch, says by Anna Andreeva, an analyst for Needham & Company covering consumer and e-commerce companies including specialty pet retailers.
But in the past few months, he said, cracks have appeared in that theory. Petco, Chewy and General Mills, the maker of Blue Buffalo dog food, warn that some pet owners are becoming more price sensitive and even trade down on cheaper pet food as they deal with inflation.
For Walmart, that cost mentality could bring a competitive advantage — similar to what its grocery business enjoyed last year because of its low prices.
At the pet service center, Walmart will offer an array of veterinary and grooming services, including health exams, nail trims, teeth cleanings, haircuts and more. Services range in price, from $15 nail trims to $25 rabies shots to $97 for an essential package. That visit includes a physical exam, several vaccinations and a parasite test.
The pet store will provide veterinary services for dogs and cats. Grooming is available for dogs. Walmart said it has no current plans to add more animal
Along with the center’s opening, Walmart began rolling out a new offering this week that can automate customers’ frequent orders, including food and pet supplies. The subscription-based approach, which requires no payment, has torn a page from the playbook of direct-to-consumer pet specialty retailer Chewy. The company has grown its business with the help of Autoship, which allows customers who set up repeat deliveries of items to get a discount.
The company’s membership program, Walmart+, also gets a few pet-related perks, including a free one-year membership to pet telehealth service Pawp.
But as it moves closer to the pet space, Walmart needs to prove it can gain traction in a new business. The company has made a similar push to offer cheaper doctor, dentist, and therapy appointments to people through Walmart Health. It opened its first health clinic in 2019 at the same store in Dallas, Georgia, where it will now explore pet services.
Clinicians speak to the challenge of entering a new business. Walmart’s health clinics have opened slowly, and the expansion effort has been complicated by frequent turnover of top management.
By the end of 2023, Walmart expects to have a total of 48 health centers in Georgia, Arkansas, Illinois, Texas and Florida — just about 1% of Walmart’s more than 4,500 US locations.
In the proximity of Walmart’s pet service center to its store, the retailer will also try to nudge customers into other purchases. The pet center will have a small amount of retail space, where Walmart plans to sell its own private label pet brands.
And while only pet services are allowed inside Walmart stores, customers dropping off a pet for a vet visit or grooming service can leave their dog in a kennel managed by PetIQ employees as they swing by the store for groceries and other items, Shadiow said.
