Competition between major supermarkets intensifies as Woolworths and Coles push further into pet care

Dogs — and other pets — may well be man’s best friend but they’re now the next big customers for Australia’s biggest retailers, who are muscling in on a multi-billion dollar market. While pet care was once the domain of specialists like Greencross — owners of Petbarn, City Farmers and an eponymous group of vet clinics — the rise in pet ownership means the corresponding retail sector is now worth $3.7 billion, according to analysts as Ibis World, and puts the pet sector more broadly at $10b. More than two-thirds of Australian households have at least one pet, while recent cost-of-living pressures have startled four in five owners to worry about the cost of paying for them. But the big supermarkets — known for value campaigns to grocery shoppers — are keen to take a slice of the burgeoning sector, joining Bunnings in extending their reach into pet goods and supplies. Bunnings early last year announced its foray into the furry care sector, stocking more than 1000 products from hygiene, toys and bedding to smart technology, and stocking major brands including Pedigree and Whiskas. Just months earlier, in late 2022, Woolworths announced plans to buy a $586 million, 55 per cent stake in Petstock, the nation’s second-biggest specialty pet retailer. It has 246 shops nationwide and some have attached vet clinics. (Competition concerns forced Petstock to sell a bunch of its stores for the deal to go through — the eventual buyer, PetO, now has 58 stores nationally including in WA for the first time.) In April, Coles Group launched online-only pet store Swaggle. As well as offering pet insurance and online pet advice, the vast majority of its products aren’t available in supermarkets — and Swaggle stands apart publicly from its parent company. Swaggle is aiming to streamline what is a fragmented market, improve customer experience and “put the pet first”, managing director Chad Burke told The Sunday Times, with personalisation a key selling point. Customers are encouraged to set up profiles for their pets, allowing more relevant product suggestions to be offered. “There are a lot of players ... that’s why we believe there’s a gap,” he said, adding Swaggle is offering several FlyBuys loyalty bonuses. “There’s a lot of, not just retailers, but also product choices out there. “Our brand is purposefully different ... we’ve got such an ambitious map in terms of what we want to achieve from our personalisation, setting ourselves apart, (and) how we continue to evolve our range and evolve our product offering.” Joondalup couple Brett Mutton and Aiden Whicker, who have two golden retrievers, nine-year-old Luci and three-year-old Otis, primarily buy pet food from major supermarkets and department stores like Big W for convenience. Their average spend per month on their beloved dogs is between $200 and $250. “I’ve noticed an increase in pet allocations in stores — mainly in Bunnings,” Mr Mutton said, adding he hadn’t come across Swaggle but said it could change the market if priced attractively. Coles chief executive Leah Weckert said Swaggle was able to offer a broader range of products, and about 95 per cent of Swaggle’s products couldn’t be bought at Coles. “It is different types of products — products that you would typically find at a vet, or actually boutique small suppliers that are making these things, and so for pet lovers who really look to invest in their pet, it is a great place to go and shop,” Ms Weckert told The Sunday Times. Pet food, she said, was a perfect purchase on a digital platform — and Swaggle had lined up subscription options for buyers so pet food could be delivered whenever needed. “Once you’ve used a product or had a product recommended, it’s not like a piece of steak or an avocado that you want to have a look at and check it is the right firmness, or does it have the right fat marbling, it is the same product every time in the packaging,” Ms Weckert said. “And so it does make it an easy product for customers to buy online, and it’s also very convenient for them too, because you can shop it at any time of the day.” Woolworths has learnt from experience, outgoing chief executive Brad Banducci told The Sunday Times this week, and bricks and mortar was essential. “We found an online pet business doesn’t work for us,” he said. “We actually used to have one called PetCulture, we’ve now moved from that. We came to the conclusion we’re good at running stores and running e-commerce off that . . . and that’s why we pivoted the way we have.” Within Woolworths, Petstock is in the same division as Big W, “W Living”, which Mr Banducci explained was a reflection of the company looking to meet the needs that people have outside of food — clothing, babies and pets. “Pets are so ingrained in our lives, and so that’s one of the reasons we felt having a specialty pet business would make all of our businesses inside Woolworths better,” he said. “A specialty pet business just does different things you know, whether it’s a great dog wash, the vet services, some of the scientific products you can’t get in (other) stores. So we’re very early in the journey, but we see that’s a really important part of what we do.” Mr Banducci is excited about the earnings potential for the pets division, even though it is still early days. The deal took a year to be approved and finalised, but Petstock made about $60m in the second half of the financial year. “There is competition in everything we do, which is an inconvenient truth for some folks, but it’s robust, and that’s what it’s about, right? It’s how you execute in those industries, and having the right culture around it.” Mr Burke said keeping Swaggle online-only meant it could be more nimble and offer its services across Australia simultaneously. “It’s all about how we can help harness the digital technology to improve customers’ lives, and ultimately hit our vision of being Australia’s favourite destination for each and every moment,” he said. Bunnings owner Wesfarmers sees competition as a positive. “We’ve been offering pet-related products for many years in Kmart. Interestingly, we’re now starting to offer some of those Anko pet accessory products internationally at the moment through other retailers,” Wesfarmers chief executive Rob Scott told The Sunday Times. “And then Bunnings has a great pet offer(ing) — it’s consistent with Bunnings entering new categories — that is offering better choice and better value. “So it (Woolworths’ entry) just highlights the competitive nature of the market. There are many different groups out there offering similar products and we have to fight really hard to make sure customers are coming in and buying it from Kmart or Bunnings versus the other options they have.” Mr Mutton hopes the focus on pets from retailers is accompanied by food manufacturers making nutritional information clearer. “Having a set standards guide on pet food would help pet owners make more informed decisions — especially as the pet food market in under-regulated in Australia, especially when it comes to dry kibble.”