As consumers increasingly turn to digital channels to feed their fur babies, General Mills is seeing in-store pet food sales decline, even as eCommerce continues to grow in the category.
The food giant shared in prepared statements in conjunction with the release of fiscal 2024 second quarter earnings on Wednesday (Dec. 20) how the category has changed.
“The US macro environment continues to be hostile to premium pet food, as pet parents show greater mobility and seek value,” said General Mills CEO Jeff Harmening. “We’re also seeing a more significant shift in channel performance, with a double-digit decline in retail sales in the pet retail channel in Q2 only slightly offset by low-to mid-single-digit growth in food, medicine and mass and eCommerce channels.”
Consumers buy pet food through digital channels. The PYMNTS Intelligence study “Changes in Grocery Shopping Habits and Perceptions,” based on responses from more than 2,400 US consumers, revealed that 27% of those who buy pet supplies do so primarily in physical stores. Conversely, 19% purchase most (but not all) of their pet supplies digitally, and 55% do so exclusively through eCommerce channels.
Additionally, PYMNTS Intelligence found that consumers who purchase pet products from eCommerce channels are more likely to shop at brick-and-mortar stores, according to the report “The Replenish Economy: A Deep Dive of Household Supply,” created in collaboration with sticky.io. The study, drawn from a survey of more than 2,000 US consumers, revealed that 53% of those who subscribe to Chewy’s Goody Boxes for pets (of which 15% of subscribers are enrolled) , and 45% of those who subscribe to BarkBox (which has gained a 14% share of subscribers) shop less in stores as a result of these services.
The move to digital in the category makes sense, given the common demand for highly specialized pet food options and consumers’ disproportionate propensity to turn to eCommerce for shelf-stable categories associated with perishable items (except for Instacart shoppers).
Consumers have only begun in recent months to downgrade pet food, as Harmening observed. For much of this inflationary period, pet parents have held out, continuing to splurge on premium options even as they cut back on their own groceries.
Across the categories in which it operates, General Mills is seeing its digital growth outpace brick-and-mortar growth, with previously double-digit increases even as total net sales fell 2%, with connected commerce efforts that play an important role in this eCommerce growth.
“We leveraged our investments in online and connected commerce capabilities to showcase excellence on the digital shelf,” Harmening said. “Our retail sales through eCommerce channels in the US grew by double digits in the second quarter, and we continue to enjoy a higher overall market share in eCommerce compared to brick-and-mortar outlets.”
Similarly, the PYMNTS Intelligence study “Tracking the Digital Payments Takeover: Capturing the Coming eCommerce Wave,” created in partnership with Amazon Web Services (AWS), revealed that 32% of consumers said they were very or very likely to increase their online grocery purchases in the next year.
