Dive Brief:
- In a move that positions it beyond home improvement, Lowe’s on Thursday announced it has inked a deal with Petco for shop-in-shops inside Lowe’s stores. The pilot locations will staff Petco associates during peak hours.
- Through the partnership, Lowe’s will add a curated selection of pet nutrition and supplies from Petco’s private labels, in addition to several national brands, to designated areas of its stores, according to details emailed to Retail Dive. The retailer will first roll out the concept to Lowe’s Alamo Ranch, Texas, location in early February, with 14 additional locations in Texas, North Carolina and South Carolina by the end of March.
- Lowe’s will also offer services with Petco, including Vetco vaccination clinics, microchipping, prescription pest prevention and mobile grooming, the company said.
Dive Insight:
Lowe’s partnership with Petco aims to help the home improvement retailer expand its assortment and attract new customers.
“As part of our total home strategy, we’re committed to providing customers the options they need for every part of their home. And for many of our customers — that means their pets, too,” Bill Boltz, Lowe’s executive vice president of merchandising, said via email. “With many searching for a convenient solution to getting all of their home and pet needs in one location, we couldn’t think of a better time to create this shopping experience with Petco as our partner.”
Lowe’s has already taken steps to target pet owners by allowing those consumers to bring their pets into its stores and by offering items catered to them, including Stainmaster products, dog beds, dog doors and cleaning supplies. The retailer last April announced it had acquired Stainmaster after becoming the exclusive home improvement retailer for Stainmaster carpet in 2010.
Lowe’s, along with the broader home improvement sector, experienced a boost in the early months of the pandemic as consumers sought out ways to make their homes — a place they were spending the majority of their time — more comfortable. But that heightened demand appears to be waning. Lowe’s in December warned investors that full-year sales could be between $94 billion and $97 billion, while same-store sales could decline 3% or be flat.
Growing its position in the pet category lends the potential to help offset declining demand in the home sector. The pet category similarly experienced a boost during the pandemic as consumers sought out comfort and connection. According to Packaged Facts data cited by Lowe’s, 11 million new pets entered U.S. households since the start of the pandemic. Petco in its most recent quarter reported net sales increased 15% year over year to $1.4 billion, while net income reached $51.5 million from $2.1 million the year prior. And as a category, pets could see a higher repurchasing rate compared to home improvement items.
“Over the last two years, being comfortable and happy at home has become a top priority for consumers so, with the Lowe’s + Petco store-in-a-store concept, we’re able to truly become that one-stop, convenient shopping destination for everything they need,” Boltz said.
