Dive Brief:
- Petco has made improving its in-store experience and integrated omnichannel model integral to its growth after completing a customer segmentation and needs analysis, CEO Joel Anderson said on a Q4 2025 earnings call Wednesday.
- In addition to offering compelling product and services at scale, the business will focus on “trusted store experience, focused on driving traffic, engagement and basket” and “an integrated omnichannel model, improving convenience, loyalty and repeat behavior,” Anderson said.
- The pet retailer is also relaunching its loyalty program later in 2026 after an encouraging pilot that concluded in December. The company will run another pilot throughout the spring. “Our goal is to offer a more personalized and relevant loyalty experience that is seamlessly integrated within our app,” Anderson said on the call.
Dive Insight:
Petco views experiential offerings catered towards its most valuable customers as key to returning to growth.
The retailer saw net sales decrease 2.4% year over year to $1.5 billion and comparable sales dip 1.6% year over year, according to an earnings release. Both results were in line with its outlook.
While the pet retailer spent 2025 strengthening the leadership team, including appointing Michael Romanko as chief customer and product officer, and rebuilding the foundation of its economic model, the company is now focused on “driving sustainable, profitable top‑line growth," Anderson said.
Petco is looking to drive more spend from its current customers, particularly the cohort it calls “passionate explorers.”
“These are pet parents, who are highly invested in their pets and seek innovation, expert support and a welcoming shopping experience across the full pet journey,” Anderson said.
Among customers who engage in more than one channel or services, net spend per average customer is five times higher than among other customers, according to CFO Sabrina Simmons. “So it's really just expanding our relationship with our customer, wherever they want to shop and making sure we're getting that loyalty, retention and higher spend.”
Stores represent a significant portion of total sales and remain a key focus for the company’s growth initiatives.
“We have changed leadership, reorganized how we operate and unified our center of store operations with our services,” Anderson said. “Our goal is to leverage stores to build community, excitement and customer loyalty through frequent newness, higher levels of customer engagement, such as holding fun events for families and pets and through wholly owned services that promote repeat visits. The end goal is to drive both traffic and basket.”
To increase basket size, the retailer launched a major training initiative in February on promoting cross-selling. About half of Petco’s dog customers don’t buy food from the retailer, for example, suggesting there is room to capture more wallet share, Anderson said.
Done well, cross-selling and upselling can boost sales, meet customer needs and increase brand loyalty, but experts have warned that brands risk creating an adversarial relationship with customers if they feel pressured or taken advantage of.
The retailer is also confident in its store model as Gen Z shoppers are returning to stores. Industry data shows one-third of Gen Z consumers are shopping exclusively in store, Anderson said.
“We see this as a huge long-term opportunity,” Anderson said. “With the Petco model well positioned to capture Gen Z's desire for experiences and connections.”
