PETsMART: teaching an old pet care business new tricks

Discount Store News, Dec 6, 1993 by Richard Halverson

In 10 stores, including one in Las Vegas, PETsMART is testing through the end of December a frequent shopper program it clals Shop$Mart. For purchases, customers accrue points that can be redeemed for personal items such as calculators and small appliances. The chain will evaluate the program after the end of the year, he said.

To participate, customers have to answer a questiionnaire about their spending on pet supplies, Hansen said, and the data base will be used for direct marketing for such niche products as aquariums and grooming services.

Another innovation is PETsMART NEWS, which Hansen said has become the largest circulation magazine in the country for pet news. Through its stores, PETsMART hands out a million copies a month, he said.

The chain made obedience training a retail product at a modest price of $39 for eight one-hur lessons, Hansen said. Previously, dog owners had to choose between going to a professional trainer, if they could afford a $300 fee, or going to a park system obedience school and contending with hundreds of other animals.

Sales for the current year are on target to hit $300 million, compared to $187.9 million last year. By the end of the decade, PETsMART could be a $2 billion company, predicts Christopher E. Vroom, an analyst for Alex. Brown & Sons, Baltimore.

Despite 19% same store sales gains last year, PETsMART has only recently turned the operating profits corner. Profits of $5 million in the fiscal year ended Jan. 31, 1993, improved on the previous year's profit of $665,000. The $5.7 million profit for two years is offset, though, by $5.2 million in operating losses for the previous three years.