As more companies allow their employees to work from home during the Covid pandemic, young city dwellers have moved to suburbs and rural areas giving their pets more space to roam, Petco CEO Ron Coughlin said in an interview with “Squawk on the Street”.
“There are people, millennials, who couldn’t have pets in homes and are now buying houses,” he said. “There could be a second wave of pet buying.”
Last year 3.3 million new pets found homes as the pandemic made people long for a furry friend to keep them company during the Covid lockdown.
As a result of this move to the suburbs, Coughlin found that Petco’s 1,500 stores in the US and Mexico gave them a competitive advantage over online-only retailers like Chewy.
“Online competitors ship it from a distribution center that crosses multiple zones, where we collect it in the back of a DoorDasher car at the same cost as a tennis ball, deliver it the same day, and deliver it at a lower cost,” said Coughlin and added that 80% of its ecommerce orders are shipped or delivered through their stores.
Chewy declined to comment, referring to the downtime before winning.
Petco announced Thursday that fourth quarter sales and comparable store sales rose 16% and 17%, respectively, while digital sales rose over 90%. The company announced that fiscal 2020 sales and comparable store sales increased 11%.
Last December, Petco announced a partnership with DoorDash to offer its customers same day delivery. The company also tripled the number of ship-from-store locations once Covid hit.
Additionally, Coughlin told CNBC that 39% of its customers say they prefer to shop in-store for its various pet services.
“They want to come to our pet care centers, they want to get a groom, they want to get into veterinary care. We’re the only player in the industry with this end-to-end ecosystem.” said Coughlin.
Petco’s stock rose about 0.5% in afternoon trading.