Dive Brief:
- Petco is improving the omnichannel customer experience of its service offerings, including grooming and veterinary care, executives said on a Q1 2025 earnings call Thursday.
- The pet care retailer plans to relaunch its Vital Care members program in 2026, according to CFO Sabrina Simmons. The current program offers discounts on pet health needs for an annual membership fee. The goal is to “create a more personalized long-term loyalty experience,” CEO Joel Anderson said.
- Petco is also revamping its product assortment to align with consumer demand and increasing shelf space to improve product availability. “From the customer perspective, we are improving shopability with higher in-stock availability. When you put all this together, it reinforces Petco as a reliable destination for all our customers and care needs,” Anderson said.
Dive Insight:
While Petco works to return to profitability, the pet care company is focusing on providing a better, more unified experience for customers.
Net sales decreased 2.3% year over year to $1.5 billion and comparable sales decreased 1.3%, according to an earnings report.
Services, including grooming and veterinary care, were a bright spot, delivering positive net sales of 1% year over year. Services are Petco’s fastest-growing business and the company invested in improving its offerings, Anderson said.
“In my view, our services offering is what fortifies our competitive moat,” Anderson said.
The pet retailer upgraded the software to book grooming appointments to provide customers more flexibility and time slots and updated its vet scheduling system to ensure better coverage.
“Almost 50% of our customers schedule a grooming appointment online,” Anderson said. “And if they don't see openings or they have to wait a week or two, they're going to consider somebody else besides Petco. So that change has been very, very positive for us.”
The company also made productivity improvements in both hospitals and grooming operations.
Despite modest sales, executives are confident in the resilience of the services category, as grooming and veterinary care are more needs-based. Anderson believes Petco’s service offerings will drive in-store traffic, retention and loyalty.
The company’s current Vital Care membership has also weighed on sales, as it has deemphasized the program, Simmons said.
“But because we have been deemphasizing that, while we work to relaunch it, that is within services and others. And that's actually been a bit of a drag. Our core service business without that is actually quite healthy,” Simmons said.
