Big Chain Market Share and Independents - The Planted Tank Forum
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post #1 of 26 (permalink) Old 03-05-2014, 04:46 PM Thread Starter
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Big Chain Market Share and Independents

I read today that of the almost 16 billion dollar annual U.S. pet store market.

The two biggest market share holders were:

PetSmart - 40%
PetCo - 20%

I was astounded. Two companies holding 60% of the entire pet store market.

I have nothing against either one of these companies. I buy from PetSmart on a semi-regular basis, and probably would buy from PetCo too if they were in my area.

But it amazes me that specialty shops and "mom and pop" pet stores are being so completely crushed out of the marketplace.

I've always thought about "retiring" into owning and operating a pet store (focusing on aquaria of course), but I'm not sure if passion alone is enough to keep one out of bankruptcy court in the long run.

I'm interested in hearing some ideas about what the members think an independent store can offer that a big chain can't or won't.


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post #2 of 26 (permalink) Old 03-05-2014, 04:56 PM
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Originally Posted by nofearengineer View Post
I read today that of the almost 16 billion dollar annual U.S. pet store market.

The two biggest market share holders were:

PetSmart - 40%
PetCo - 20%

I was astounded. Two companies holding 60% of the entire pet store market.

I have nothing against either one of these companies. I buy from PetSmart on a semi-regular basis, and probably would buy from PetCo too if they were in my area.

But it amazes me that specialty shops and "mom and pop" pet stores are being so completely crushed out of the marketplace.

I've always thought about "retiring" into owning and operating a pet store (focusing on aquaria of course), but I'm not sure if passion alone is enough to keep one out of bankruptcy court in the long run.

I'm interested in hearing some ideas about what the members think an independent store can offer that a big chain can't or won't.
Better conversation and customer service, I can actually hobby talk with the employees b/c they know what they are doing. Better quality fish and plants. Prices are bit higher but I don't mine paying more for a better experience.
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post #3 of 26 (permalink) Old 03-05-2014, 05:00 PM
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Local fish stores around here have a reputation for providing healthy fish. Petsmart and Petco use one big filter system for all tanks of a specific type - one for all freshwater tanks and one for salt.
The LFS that I frequent has a big sponge filer per tank so they don't share the same filtration system. They also sterilize their nets between tanks - I've had to wait because they ran out of sterilized nets. They don't sell fish the same day they receive them.
Because of this I buy virtually all my fish from them.
What's also amazing is that the LFS fish prices are not higher than Petco or Petsmart.

So, what local fish stores provide me with is healthy fish.

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post #4 of 26 (permalink) Old 03-05-2014, 05:24 PM
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As with any market survey its tough to compare apples to apples. What are they including in their market estimations?

Over half of the shelfspace is dedicated to dogs and cats in petco and petsmart. This means that half of their business they are competing with grocery stores and walmart.

Now if you were to just break down the aquarium market the market size would probably be less than 1 billion. It's tough to estimate because most of the LFS don't file public annual reports for some reason. :-)

I imagine a LFS would show a much higher profit margin on livestock and higher share of the total market. Poorly cared for live inventory is a great way to lose money.
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post #5 of 26 (permalink) Old 03-05-2014, 05:31 PM
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Originally Posted by twentypoundtabby View Post
Petsmart and Petco use one big filter system for all tanks of a specific type - one for all freshwater tanks and one for salt.
Or close to it. I say that because only half the freshwater tanks at a local Petco got wiped out when someone apparently dumped a bottle of insecticidal shampoo in one tank.

Now if they run an effective UV sterilizer on their big filter systems, having the tanks so interconnected might not be so bad. Come to think of it I've never heard whether this is the case. Anyone know?

You're lucky to have such a LFS in your area BTW. They are a dying breed. The few around here focus most heavily on high dollar saltwater, cichlids next, tropicals and planted tanks are almost an afterthought.
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post #6 of 26 (permalink) Old 03-05-2014, 06:11 PM
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Interesting, i would of guessed petco would of been doing better then petsmart.

@DarkCobra - Is that that same whacko running around Florida sabotaging tanks there as well, or is it becoming a mini-movement down south in general?

I'm not into the image, but into the hobby...
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post #7 of 26 (permalink) Old 03-05-2014, 06:27 PM
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@DarkCobra - Is that that same whacko running around Florida sabotaging tanks there as well, or is it becoming a mini-movement down south in general?
I haven't heard about that. What a crappy thing to do.

This particular instance happened a few years back, in Baton Rouge, LA. They never saw who it was, or what exactly was poured in the tank; they only surmised flea shampoo from the smell and suds.
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post #8 of 26 (permalink) Old 03-05-2014, 07:04 PM
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And there are other chains / franchises in the mix. Pet Supplies Plus is a franchise with a good number of locations in the NJ/PA area.

In a nutshell, Petco / Petsmart really only cater to the casual and novice aquarist that isn't very demanding about quality of hardware or livestock. They've pretty much obliterated the LFS that used to be there for the kids and parents in the neighborhood that needed to replace a dead goldfish or guppy, are thrilled with cartridge filters, and maybe just ran out of flakes and need something to throw at the fish until their order arrives. Any LFS that wants to survive today, needs to provide what they don't: Knowledge, higher quality hardware, healthier livestock, and more choices in livestock.

And those numbers quoted leave out the bigger internet shops like Foster & Smith, Petsolutions, ThatPetPlace, and countless others. So the slice of the pie left for the brick and mortar LFS is quite a small sliver now.

Angelo

"Why can't my wife see all of this stuff as an investment?"

Last edited by Darkblade48; 03-06-2014 at 02:16 AM. Reason: Back to back posts
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post #9 of 26 (permalink) Old 03-05-2014, 07:13 PM
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I love our local fish store, it focuses manly on salt water but also has an interesting nano fish area and now more plants and moses. The customer service can be slow but when you get attention the information is valuable and trust worthy. I like that they try to stock interesting rarer fish that you don't see at the big box shops. They will also order fish, etc for you.

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post #10 of 26 (permalink) Old 03-05-2014, 07:27 PM
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I stopped shopping at chain stores the day I got this response to a question:

Me: "Do you have any female Dwarf Gourami's?" After having a male bagged up.
Clerk: "No."
Me: "Will you be getting any in soon?"
Clerk: "No"
Me: "Is there a reason why you will not be? I was hoping to get a pair."
Clerk: "They are ugly." no joke....

I just picked up my bag, paid and walked out. I was actually planning on planning on picking up the marineland C-220 I have now while I was there. I went to the LFS instead. I paid 10% more than I would have at the chain but at least I got my female(RIP Thanks to the cat) and some info and advice on other things while I was there.


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post #11 of 26 (permalink) Old 03-05-2014, 08:56 PM
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It's *REALLY* hard to run one of these businesses. I spoke to the owner of a good LFS in my area and he said profit margins are really bad -- and trust me, this guy overcharges by a mile on everything. It's like $5 for a tetra and equipment/food/medication is over the moon. I supported him by buying my angels, cacatuoides, and 90G tank, but I can't justify buying "normal" things from him anymore, even though I want to.

It basically all comes down to economies of scale. Petco/Petsmart have the scale to get preferable pricing on everything. The small guys don't, and have to pass high prices on to the customer as a result...

It's sad, but reality. I had also thought it would be fun to open a shop one day but now it seems crazy, especially in high-cost areas (in terms of real estate prices and taxes) such as the NY metropolitan area.
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post #12 of 26 (permalink) Old 03-05-2014, 09:45 PM
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I have to agree with the above post. I've heard similar things from the LFS owners I've spoken to.

If this is your retirement plan, I'd make sure you have enough saved up to outright buy the plot for your store.

I buy livestock from LFS stores but I can't afford to buy all my fishtank needs from them.

Often, the big chains don't carry more sensitive fish which ship poorly, so that's at least one advantage for the LFS.
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post #13 of 26 (permalink) Old 03-05-2014, 11:29 PM
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I really don't have anything but Petsmart in my area. I order most of my aquarium stuff online. The only LFS is mostly devoted to snakes & small reptiles, a few birds, some saltwater fish & very, very few freshwater fish. When I was buying fish they didn't have ANY. Last time I was there they only had some Black Skirt Tetras. NO plants, & very few aquarium supplies. So my only choice for fish is Petsmart or order online which is too expensive when just getting Oto's, Serpae Tetras & Black Skirt Tetras.
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post #14 of 26 (permalink) Old 03-06-2014, 12:29 AM
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what's even more amazing is that there's really only a few companies out there that own a huge chunk of the pet industry

http://www.central.com/
http://www.unitedpetgroup.com/

as for mom and pop stores. they are getting harder and harder to find every day as the big chain stores have pretty much killed most of them. it really is a shame

I remember back in the day when there used to be thousands of independent tank manufacturers. but the big boys have pretty much priced them out of the market with their dollar per gallon sales
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post #15 of 26 (permalink) Old 03-06-2014, 12:29 AM
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Pet-Smart-CO didn't kill the Mom & Pop LFS..the "Wal-Mart shopper" metality of hobbyist did. Which is also the reason there aren't many Mom & Pop anything- brick & mortar store left.

Pet-Smart-COs live by Dog & Cat food sales, everything else is an add on sale and/or attention 'draw'. Both companies could dump aquatics/reptiles & small animals tomorrow and they would be fine and most likely be more profitable. With the internet presence in the hobby, most of you will live to see that happen. Even my generation, Baby Boomers, have embraced Online shopping.

Right now show of hands, who buys big ticket filters, pumps, lights online?

Online stores blow away Pet-Smart-COs on equipment the same way, Pet-Smart-COs blew away the Mom & Pop LFS. Retail shelf space is based on sales per sq. ft. of sales space. We see a fish tank as a home for fish, plants, inverts. To a retailer a fish tank is a shelf, that has to be profitable. Stop buying Aquatic supply, the more profitable segment of that department, eventually that space gets replaced with dog food bags. Fish sales alone will not justify an Aquatic dept. to a chain retailer any more than it did for Mom & Pop LFS operators.

Eventually, there will only be aquatics online. At first the pricing will be cheap as the online shops fight for market share. Most will fail, the survivors will become the only option. They will either price fix or continue to cut expenses and of course quality will suffer.

If there is a any hope for the hobby to live on it will be that Hobbyist will go full circle to our roots of breeding our own fish, growing our own plants and building our own tanks vs. shopping. So maybe it not a bad thing after all.

BTW - PetSmart Central System.

PetCo, Multi-Systems in 4' segments each with it's own sump. Typical layouts being single 4', double 4' and occasionally a triple 4' systems. PetCo runs chillers on their Goldfish systems.
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