Pet shops left behind as Amazon, Chewy reap benefits from adoption surge

The majority of pet shops are losing business to online retailers like Amazon, Chewy and Petco

The massive increase in pet ownership continues to drive up business in the pet industry.

As more people spend time at home and invest in fuzzy friends amid the coronavirus pandemic, the pet industry ballooned to $100 billion just last year with sales up 9% year over year. According to animal welfare experts Best Friends Animal Society, there are currently 173 million pets in American homes. However, the profits have disproportionately favored digital retailers, leaving brick-and-mortar pet shops in a rough patch.

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Some businesses are riding the windfalls of the industry’s boom, like one pet salon in Dobbs Ferry, N.Y., north of New York City. Unlike most mom-and-pop shops, which make up the majority of the 6,200 independently owned brick-and-mortar stores in the country, pet groomers like Primp My Paws are seeing growth in their customer base.

“Living with their animals, they’re seeing them more, they’re taking them out more, and I think that it’s just a way to maintain some kind of normalcy,” Primp My Paws owner Kim Lajca told FOX Business. “When you’re so restricted and you can’t go anywhere else and the groomers open,” more people are wanting to go get their animals cleaned and pampered.

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In addition, quarantine, lockdowns and work-from-home setups have allowed people to train their new puppies. In fact, the tailwinds in the pet business are just getting started since pets are indispensable and will stick around beyond the pandemic.

“The pet industry is overall been doing well,” FOX Business’s Gerri Willis told "The Claman Countdown." “But one segment is languishing.”

The majority of pet shops are losing business to online retailers like Amazon, Chewy, Petco, among others, which have been direct beneficiaries of the shift from in-person shopping to e-commerce. Chewy, a pet supply online retailer, became one of the hottest stocks of 2020, with its share price increasing by more than 200%. Its delivery box of fur baby essentials such as food, medications and more, is catered to the locked-down masses.

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Similarly, large pet retailer chain, Petco, is leveraging its physical presence to push out pet supplies and other services through its digital platform.

Stocks in this Article

CHWY CHEWY INC.
$77.00
-1.98 (-2.51%)
WOOF PETCO HEALTH AND WELLNESS COMPANY INC.
$24.03
+0.40 (+1.67%)
AMZN AMAZON.COM, INC.
$3,334.69
-37.32 (-1.11%)
EBAY EBAY, INC.
$61.79
-2.00 (-3.14%)

Meanwhile, Amazon and eBay are offering overnight delivery of squeaky toys, dog treats and even pet odor eliminator, replacing the need to take trips to the local pet supermarket or pet supplies plus.

The acceleration of the digital pet industry has come at a cost for small-time business owners who are struggling to stay afloat.