Pet category emerging as retailer's best friend

The pet category is experiencing growth, and True Value has taken notice. The retailer is paying special attention to statistics that show 72% of pet owners consider their pet a member of their family, and 70% of dog owners think their dog understands how they are feeling better than most people do.

It's no secret that home owners love their pets, but the category is attractive to independent hardware stores for more retail-centric reasons, according to panelists on a True Value seminar here at the co-op's 2013 Fall Reunion.

The average pet owner spends $630 on pet food per year, said Bill Hancox, director of marketing insights and analytics for Chicago-based True Value. Pet sales across retail have grown at a clip of about 3% per year, even through a major recession. And no single retail channel dominates the pet market.

"There's no reason that our stores can't get their share of this business," Hancox said during the presentation titled "How Pet Can Be a Winning Business for You" here at the co-op's 2013 Fall Reunion.

Pet is a growing part of the overall business at Kruegers True Value in Neenah, Wis., according to fifth-generation owner Jim Webb. "We want to create a culture in the store, and we want to be known as a welcoming place for pets," he said. "And customers love that."

Webb says Kruegers has been in the pet business to a serious degree for about a year and a half, dating back to the initial effort of the True Value co-op's expansion and promotion of the category. A sign outside Kruegers reads: "Well-behaved pets on leashes are always welcome here." The store regularly takes pictures of pets and posts them online.

Webb and other panelists explained that the margin on a typical bag of dog food is below average, but the category is a big booster in customer traffic. "You're seeing a repeat customer on a regular basis," Webb says. "The pet is always eating. And that gives us an opportunity to offer the pet owner something else."

Willis Qualheim, president of Qualheim's True Value in Shawano, Wis., also believes in the drawing power of pet supplies. "If you told me a few years ago that people would pay $55 for dog food, I'd say 'your nuts.'" he said. "But a lot of our sales are in the premium end at $45 and up."

Qualheim said the pet category lends itself well to marketing events. The store's Pet and Petal event includes face painting, cotton candy and visits from pet food companies and the Humane Society.

The retailer also said True Value's involvement makes it easier to order pet merchandise from one source, as opposed to five outside vendors.

In addition to its own Pet Expert private label brand, True Value recently introduced five new pet brands into the mix: Royal Canin, Natural Choice, Triumph, Nature's Recipe and Iams. Marketing materials range from advertising programs to paw-print floor graphics.

"The real benefit for you is footsteps," said Kevin Rewerts, True Value's divisional VP for farm, ranch, auto and pet.

"What we are offering here is guidance on how to be in the business, up to date products," he addid. "We offered a one-stop shop to make it easy for you to be in this business so that you can buy a single bag or a pallet of goods to meet your needs."

Retailers starting in out in the pet business are advised to find space for the department, ideally in the front of the store in a female-friendly area, according to the panel.

The co-op's wholesale sales of pet are expected to increase 77% in 2013, according to executives.

"Have fun with it," said Webb, by way of advice. "Business should be fun, and this is."