25 May 2016

BUSINESS - Petco and PetSmart Pull Hill's Products from Stores

A breaking news story from Pet Business reports PetSmart and Petco have pulled Hill’s Pet Nutrition Products from their stores in Topeka and Lawrence, Kansas “in what some industry observers are describing as a shot across the company’s bow due to its e-commerce and potential channel-hopping approach.”

The disappearance of Hill’s products from Petco and PetSmart shelves has also been reported in the local media.

It is being speculated that this action may be the result of pet specialty channels’ growing concerns about predatory pricing - the deep-discounting strategies online retailers use to capture market share.

“Independent pet retailers, in particular, have expressed increasing concern about the role that online outlets are playing in pet food manufacturers’ go-to-market strategy - particularly as it relates to product pricing,” writes Mark Kalaygian in Pet Business.

Their concerns seem to be justified as online sales accounted for $3.7 billion of the U.S. pet care total in 2014, approximately 6 percent of the total, and an increase of 76 percent since 2010, according to market research company Forrester.

As well, increasing numbers of pet owners are turning to Amazon to buy their pet supplies according to global e-commerce analyst Profitero

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