Seems like just yesterday that the pandemic inspired hordes of home-bound city dwellers and country-bound urban refugees to welcome dogs, cats, and assorted other domestic creatures into their lives, sparking a boom in the pet supply business.
Between 2020 and 2025, spending on pet products in the US rose from $96 billion to the $165 billion predicted for 2026 by the American Pet Products Association.
Physical retailers like Tractor Supply (with about 2,400 locations in 49 states), and e-commerce juggernauts like Chewy, notched huge revenue growth rates that drove share prices off the charts.
Five years later, those same “pet parents” who had been so eager to bond with and spoil their furry companions with premium foods and bins full of toys are showing signs of exhaustion.
Growth rates have flattened, those puppies are now aging into senior status and needing costly veterinary care, and human living expenses have gotten so out of hand that bespoke pet foods and other supplies feel like luxuries Fido won’t miss.
“Pet parents are price tired, time tired, and information tired,” according to a recent report by market research giant NielsenIQ. “Across all channels, loyalty is conditional and recalculated with every trip.” Today’s pet parent is more likely to be shopping for the best price on commodity products, wherever they can find it. After all, Fido is also brand agnostic.
The industry’s round trip has been spectacular. Tractor Supply is a nearly 90-year-old farm and ranch merchant that boomed in 2020 by capturing the hearts and wallets of ex-city dwellers who wanted to try raising chickens and building fences. The company’s share price quadrupled over five years.
Tractor rolled out a clever slogan that tantalized consumers with the romantic notion of “Life out here.” It added merchandise, tools, and other animal supplies to its offerings of chicken wire and livestock rope, including live chicks, coops, feed and gear for the would-be backyard farmer.
Tractor also exploited the “fashion out here” vibe, a sort of farm and country couture that included racks of Carhartt canvas jackets and Wolverine work boots.
But without the kind of e-commerce infrastructure of a Chewy, Tractor has been hobbled by its brick-and-mortar roots.
Slowing growth and a skittish economic mood caught up with the stock last summer. With recent downgrades by several analysts, Tractor shares have plunged by about 50% since last August, sending the price back to about where it traded five years ago.
Chewy, while dominating the e-commerce channel with a subscription and delivery model, hasn’t escaped the financial carnage. Revenue swelled by about 145% over the same five-year period (to nearly $12 billion), but the stock peaked in 2021 and the company’s market cap today is about 25% of what it once was.
The third publicly held player in the segment, Petco, trades at about 10% of its peak price, set in 2021.
As if all this wasn’t enough to discourage investors, waiting in the wings is Walmart, which in 2024 launched a new in-store service, “Pet Care Unleashed”—an integrated center offering vet, grooming, and other services. So far only a handful of the new centers have opened in Georgia and Arizona. It is truly a constantly dynamic environment with equally dynamic customer behaviors. This lies at the heart of predicting consumer behavior in retail.
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