AU INDUSTRY (SPECIALIZED) REPORT OD5128 Pets and Pet Supplies Retailers in Australia Kitted out: Industry revenue growth has climbed in response to rising demand for premium pet products Arna Richardson | October 2020 IBISWorld.com +61-3-9655-3800 [email protected] Contents About This Industry…………………………………….5 Industry Definition………………………………………………….5 Major Players……………………………………………………….. 5 Main Activities……………………………………………………….5 Supply Chain………………………………………………………….6 Similar Industries………………………………………………….. 6 Related International Industries………………………………6 Industry at a Glance…………………………………… 7 Executive Summary………………………………………………. 9 Industry Performance………………………………. 10 Key External Drivers……………………………………………..10 Current Performance……………………………………………11 Industry Outlook……………………………………… 15 Outlook………………………………………………………………. 15 Performance Outlook Data………………………………….. 17 Industry Life Cycle………………………………………………. 17 Products and Markets………………………………. 19 Supply Chain………………………………………………………. 19 Products and Services………………………………………….19 Demand Determinants………………………………………… 21 Major Markets……………………………………………………..22 International Trade……………………………………………….23 Business Locations…………………………………………….. 23 Competitive Landscape……………………………..26 Market Share Concentration………………………………… 26 Key Success Factors…………………………………………… 26 Cost Structure Benchmarks…………………………………. 26 Basis of Competition…………………………………………… 29 Barriers to Entry………………………………………………….. 30 Industry Globalization…………………………………………..31 Major Companies……………………………………..32 Major Players……………………………………………………… 32 Other Players……………………………………………………….35 Operating Conditions……………………………….. 36 Capital Intensity………………………………………………….. 36 Technology And Systems……………………………………. 37 Revenue Volatility……………………………………………….. 39 Regulation & Policy………………………………………………40 Industry Assistance…………………………………………….. 40 Key Statistics…………………………………………..42 Industry Data……………………………………………………….42 Annual Change…………………………………………………….42 Key Ratios………………………………………………………….. 42 Additional Resources……………………………….. 43 Additional Resources………………………………………….. 43 Industry Jargon……………………………………………………43 Glossary Terms……………………………………………………43 Pets and Pet Supplies Retailers in Australia OD5128 October 2020 2 IBISWorld.com About IBISWorld IBISWorld specializes in industry research with coverage on thousands of global industries. Our comprehensive data and in-depth analysis help businesses of all types gain quick and actionable insights on industries around the world. Busy professionals can spend less time researching and preparing for meetings, and more time focused on making strategic business decisions that benefit you,your company and your clients. We offer research on industries in the US, Canada, Australia, New Zealand, Germany, the UK, Ireland, China and Mexico, as well as industries that are truly global in nature. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 3 IBISWorld.com Covid-19 Coronavirus Impact Update IBISWorld’s analysts constantly monitor the industry impacts of current events in real-time – here is an update of how this industry is likely to be impacted as a result of the global COVID-19 pandemic: The outbreak of COVID-19 in March 2020 initially led Australian consumers to stockpile pantry supplies, including pet food supplies and treats, causing a short- term rise in demand for industry products. Increased demand also came from pet- parents working from home who were able to spend more time with their animals, purchasing new accessories and treats. Industry operators with animal adoption programs run in conjunction with local animal shelters may have also benefitted from an unprecedented spike in demand for animals for companionship purposes during lockdown. Vulnerable or self-isolating customers less able to visit pet stores due to the outbreak of COVID-19 may have turned to rival online retail channels for their pet’s needs, to the potential detriment of industry operators without complementary ecommerce platforms. Even after lockdown and social distancing measures are relaxed, these new consumer shopping habits may remain in play in 2020-21. In response, industry operators are likely to focus on the roll-out of digital platforms over 2020-21 to capture changed shopping patterns and to take advantage of higher pet ownership rates. Note: The content in this report is currently being updated to reflect the trends outlined above. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 4 IBISWorld.com About This Industry Industry
Definition Industry operators are retailers of pets and pet supplies.
Products sold include pets,pet food and other pet supplies and
accessories. The most common pets sold include dogs, cats and fish. Online pet retailers are not included in the industry. Major Players Greencross Pty Limited PETstock Pty Ltd Main Activities The primary activities of this industry: Retailing processed and unprocessed pet food Retailing durable pet products and accessories Retailing animal healthcare products Retailing pets The major products and services in this industry: Pet products and accessories Pet food Animal healthcare products Pets Pet services Pets and Pet Supplies Retailers in Australia OD5128 October 2020 5 IBISWorld.com Supply Chain SIMILAR INDUSTRIES Prepared Animal and Bird Feed Manufacturing in Australia Veterinary Services in Australia Supermarkets and Grocery Stores in Australia Veterinary Pharmaceutical Manufacturing in Australia RELATED INTERNATIONAL INDUSTRIES Pet Stores in the US Garden Centres & Pet Shops in the UK Pet Stores in Canada Pets and Pet Supplies Retailers in Australia OD5128 October 2020 6 IBISWorld.com Industry at a Glance Key Statistics $2.9bn Revenue Annual Growth Annual Growth Annual Growth 2016-2021 2021-2026 2016-2026 3.4% 3.0% $129.4m Profit Annual Growth Annual Growth 2016-2021 2016-2026 0.4% 4.4% Profit Margin Annual Growth Annual Growth 2016-2021 2016-2026 -0.7% 772 Businesses Annual Growth Annual Growth Annual Growth 2016-2021 2021-2026 2016-2026 -0.2% -0.3% 7,125 Employment Annual Growth Annual Growth Annual Growth 2016-2021 2021-2026 2016-2026 0.4% 1.2% $291.8m Wages Annual Growth Annual Growth Annual Growth 2016-2021 2021-2026 2016-2026 1.1% 1.8% Key External Drivers % = 2016-2021 Annual Growth 0.2% Demand from prepared animal and bird feed manufacturing 0.3% Real household discretionary income 1.6% Number of households 11.8% Demand from online shopping Industry Structure POSITIVE IMPACT Concentration Low Regulation Light Globalization Low MIXED IMPACT Life Cycle Mature Revenue Volatility Medium Capital Intensity Medium Technology Change Medium NEGATIVE IMPACT Industry Assistance None Barriers to Entry Low Competition High Key Trends The rising humanisation of pets has contributed to increased expenditure per pet Players have widened their product ranges to benefit from owners’ willingness to spend on pets Several firms have exited the industry over the past five years due to rising online competition Rising competition is forecast to become a significant challenge for the industry Pet wellbeing trends are projected to shape the industry’s product portfolio Ongoing urbanisation is forecast to influence pet ownership trends over the next five years Expenditure on pets has risen over the past five years, benefiting the industry Pets and Pet Supplies Retailers in Australia OD5128 October 2020 7 IBISWorld.com Products & Services Segmentation Pet products and accessories 16.7% Pet food 54.1% Animal healthcare products 15.2% Pets 4.3% Pet services 9.7% Pets and Pet Supplies Retailers Source: IBISWorld Major Players % = share of industry revenue SWOT STRENGTHS High Profit vs. Sector Average WEAKNESSES High Customer Class Concentration High Product/Service Concentration High Capital Requirements OPPORTUNITIES High Revenue Growth (2016-2021) High Revenue Growth (2021-2026) High Performance Drivers THREATS Very Low Revenue Growth (2005-2021) Pets and Pet Supplies Retailers in Australia OD5128 October 2020 8 IBISWorld.com Executive Summary Australia has one of the highest rates of pet ownership in the world, with over 60% of Australian households owning a pet. These pets form an integral part of their owners’ lives, with many considering their pets to be family members. As pets become increasingly humanised, households are spending more money on them in the form of premium foods, dietary supplements and vitamins, pet accessories and treats. This trend has translated into higher expenditure per pet owned as households spend more on premium products and services, such as vet-prescription dietary foods, gluten-free snacks and automatic water dispenser units. Households are also adopting an increasingly holistic approach to their pets’ health and wellbeing. The Pets and Pet Supplies Retailers industry is benefiting from these trends, with operators expanding their range of products and services to capitalise on these developments. Many consumers are now opting to make their pet-related purchases in specialty pet stores as they seek out premium products. In addition, a growing number of industry retailers are teaming up with animal shelters to offer pet adoption services as opposed to selling pets from other sources. This trend reflects the growing animal adoption movement. A surge in demand for pets from animal shelters in the wake of the COVID-19 pandemic has benefited the industry, as have initial stockpiling actions by pet owners. Industry revenue is expected to increase at an annualised 3.4% over the five years through 2020-21, to $2.9 billion, driven by favourable social trends. This trend includes anticipated growth of 3.9% in the current year. Intensifying competitive pressures, especially from online rivals, are likely to constrain growth in industry revenue over the next five years. In response, industry operators are anticipated to increasingly roll out category killer superstores or co- locate with veterinary clinics or large format retail centres. Nevertheless, ongoing pet humanisation and premiumisation trends are projected to drive industry revenue growth, as is an anticipated rise in the number of single-person households and the associated desire for pets for companionship purposes. Industry revenue is forecast to increase at an annualised 3.0% over the five years through 2025-26, to $3.4 billion. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 9 IBISWorld.com Industry Performance Key External Drivers Demand from prepared animal and bird feed manufacturing Developments in the upstream Prepared Animal and Bird Feed Manufacturing industry affect industry retailers, as pet food constitutes a significant proportion of industry revenue. One such development has been the growing premiumisation trend, as Australian pet food manufacturers track human health trends with a growing array of non-GMO, organic, grain-free and paleo pet food now on offer. These premium products retail at higher prices, with associated higher margins. Demand from prepared animal and bird feed manufacturing is expected to increase in 2020-21. Number of households Nearly six million Australian households are estimated to own a pet. In addition, changes in Australia’s household composition are having a growing influence on the industry. For example, rising numbers of single-person households are influencing the number of pets kept for security or companionship. The number of Australian households is expected to increase in 2020-21. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 10 IBISWorld.com Real household discretionary income Trends in real household discretionary income can influence household expenditure on a range of pet-care products, from necessities such as food and cat litter to more discretionary items such as toys and accessories. However, a decline in discretionary incomes over the past five years has not necessarily translated into a fall in expenditure on pet-care products. This trend indicates that pet owners consider expenditure on their pets to not necessarily be discretionary, thereby still presenting industry operators with an opportunity to increase their sales. Real household discretionary income is expected to fall in 2020-21. Demand from online shopping Competition from online retailers is intensifying due to more consumers opting to purchase goods online, as online operators can typically offer lower prices for many pet supplies and accessories. Therefore, greater demand for online shopping represents a potential threat to industry operators. Social distancing measures introduced in the wake of the COVID-19 pandemic contributed to a sizeable increase in the number of pet owners shopping online in 2019-20. Demand from online shopping is expected to increase in 2020-21. Current Performance Over 60% of Australian households own at least one pet, with nearly nine million dogs and cats kept as pets. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 11 IBISWorld.com A trend towards pet humanisation has encouraged households to increase their expenditure on their pets over the past five years, purchasing goods such as human-grade pet food, designer outfits, harnesses and toys. Health and wellness trends have affected Australia’s increasingly pampered pet population, with owners taking a more holistic approach to their pets’ health and wellbeing. Dietary supplements and preventative healthcare medications are increasing family pets’ life expectancies and contributing to the rise in expenditure per pet. The Pets and Pet Supplies Retailers industry has responded to these trends by expanding its range of products and services to benefit from owners’ willingness to pamper their pets. As pet owners seek out premium foods, high-quality pet accessories and specialist pet care advice, they are increasingly choosing specialty pet care retailers that are leveraging trends favouring one-stop shopping experiences. This has helped specialty pet care retailers gain ground in the wider pet care sector. In the wake of the COVID-19 pandemic and its associated lockdown and social distancing measures, industry operators have rolled out new zero contact click and collect and home delivery options to retain their customer base. Petbarn has recently teamed up with the ride-sharing platform Uber to offer same- day delivery options. These developments have contributed to the industry’s healthy performance over the past five years. Industry revenue is expected to grow at an annualised 3.4% over the five years through 2020-21, to $2.9 billion. This trend includes an anticipated increase of 3.9% in the current year, as the recent rise in pet ownership following the COVID-19 outbreak is expec
ted to support strong demand for pet care supplies. During the initial lockdown period, many house-bound consumers purchased new toys or accessories for their pets as a result of spending more time with them. Fears with regards to the potential spread of zoonotic diseases saw other consumers increase their expenditure on healthcare products to keep their pets healthy. Many of these developments are expected to remain in play over 2020-21, supporting industry growth. Industry profitability has fallen despite the industry’s revenue growth over the past five years, as competition for regular consumer attendance has increased. Rising price competition from rival online pet stores offering regular discounts on a growing array of pet care items has added to profit margin pressures. However, greater consumer willingness to purchase premium pet products has somewhat offset these pressures and supported margins. Lifestyle choices High-density urban living has continued to rise in popularity over the past five years, constraining growth in pet numbers as households have increasingly moved into smaller apartments. This trend towards inner-urban living has led to a growing preference for smaller pets, including small dogs, cats, fish and birds. Reptiles are also becoming popular as pets, partly due to their small size and legislation that allows some types of reptiles to be kept as pets without a licence. Pet humanisation trends and advances in animal healthcare products that keep fleas and ticks at bay are influencing lifestyle choices, with a growing number of pets now being kept mainly indoors. This trend has meant that, despite urbanisation trends, the number of small dogs kept as pets has risen. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 12 IBISWorld.com Households are increasingly acquiring pets from other sources, with public backlash against puppy farms affecting purchases of live pets from pet stores. A growing number of consumers are instead opting to acquire pets from more socially conscious locations, such as animal shelters, with many pet stores now offering adoption services in conjunction with local animal rescue organisations. At the other end of the price spectrum, pet owners are also increasingly relying on professional breeders as pet ownership has become more premium. Pet adoptions have undergone an unprecedented spike following governments introducing lockdown measures in March 2020, with stay-at-home households looking for quarantine companionship. Premiumisation With human health concerns spilling over to the pet food market, pet owners have increasingly worried about their pets’ food. This trend has driven demand growth for diet, organic and healthy pet food, including grain-free and non-GMO food products. Upstream manufacturers have fostered this trend by offering an increasing array of premium pet foods, such as fortified foods and pet foods targeted at specific health conditions. Attempts to segment the pet food market with products designed to cater for particular life stages have also boosted pet food sales. These trends have driven industry revenue growth over the past five years. Pet owners’ willingness to spend on pet-related accessories and services has also boosted industry growth over the past five years. Owners have been increasingly spoiling their pets, rewarding animals with treats such as special foods, toys, accessories and grooming services. Dog and cat clothing have grown more popular, including designer lines and seasonal costumes for Halloween and Christmas. Elaborate cat accessories, such as water fountains and deluxe scratching posts, have also gained popularity. In particular, empty-nest baby boomers and millennial consumers are increasingly spoiling their pets. This indulgent spending is also serving to drive industry revenue growth, as consumers are spending more money per pet. Consolidation trends Despite healthy revenue growth, the industry has undergone consolidation over the past five years, with several small-scale operators exiting the industry. Others have been acquired by the larger players keen to capitalise on the industry’s fragmented nature. Rising online competition has also contributed to the demise of several industry operators. However, online retailers remain constrained by consumers’ uncertainty toward purchasing pet food online, with fewer than 10% of pet owners regularly using the internet to purchase pet food. While industry enterprise numbers have declined over the past five years, establishment numbers have increased. Greencross, owner of the Petbarn and City Farmers brands, has long-term goals for a retail network of 350 stores, alongside 300 vet clinics, a significant proportion of which will be co-located. The rise in Pets and Pet Supplies Retailers in Australia OD5128 October 2020 13 IBISWorld.com establishment numbers has contributed to an increase in the industry’s headcount, with employment numbers growing over the past five years. Historical Performance Data Year Revenue IVA Estab. Enterprises Employment Exports Imports Wages Domestic Demand ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) 2012–13 1,780 352 1,821 800 6,493 N/A N/A 216 N/A 2013–14 1,917 377 1,859 791 6,608 N/A N/A 230 N/A 2014–15 2,153 389 1,896 782 6,873 N/A N/A 248 N/A 2015–16 2,484 446 1,913 780 6,986 N/A N/A 276 N/A 2016–17 2,518 441 1,930 781 6,995 N/A N/A 282 N/A 2017–18 2,555 450 1,971 771 7,284 N/A N/A 286 N/A 2018–19 2,642 479 2,001 784 7,421 N/A N/A 299 N/A 2019–20 2,830 477 1,975 779 7,233 N/A N/A 293 N/A 2020–21 2,941 483 1,953 772 7,125 N/A N/A 292 N/A Pets and Pet Supplies Retailers in Australia OD5128 October 2020 14 IBISWorld.com Industry Outlook Outlook Operating conditions for firms in the Pets and Pet Supplies Retailers industry are anticipated to become more challenging over the next five years. While spending on pets is projected to increase in line with ongoing humanisation trends, competition is also forecast to intensify as a growing number of channels cater to Australia’s increasingly indulged pets. For example, veterinary clinics will likely seek to cement their position as a destination for high- quality pet food and healthcare products. Having lost ground to specialty pet retailers over the past five years, supermarkets are projected to fight back with expanded mass-premium pet food ranges and click-and-collect delivery options. Competitive pressures are also projected to intensify following the recent entry of Amazon into the Australian pet-care market. Amazon launched its Pet Supplies category in the Australian market in September 2018 and had over 100,000 products on offer as at October 2020, including pet foods, litter supplies, toys, grooming products, pet beds, bird cages, reptile & amphibian supplies, and fish tank supplies. Amazon is one of the dominant players in the online pet-care market in the United States, generating over US$1.0 billion in pet food sales alone in 2018. Due to increasing competition, many specialist pet retailers will likely struggle to differentiate themselves from their competitors over the next five years. Consequently, small specialist pet retailers are forecast to decline in prominence over the period, with industry enterprise numbers continuing to fall. The remaining players are anticipated to shift toward large-format retail centres and category killer superstores as they seek to leverage economies of scale to fend off competition from supermarkets. Many of these superstores are projected to employ greater numbers of staff, including vets, groomers and staff with specialist animal knowledge. This trend is forecast to contribute to an increase in both industry employment and total wage payments over the next five years, despite a projected fall in enterprise numbers. Other operators are forecast to co-locate with veterinary clinics, thereby offering a convenient option for pet owners to purchase goods before or after their veterinary appointment. Ongoing pet wellbeing and premiumisation trends are forecast to provide some opportunities for industry growth, as will associated pet care services such as instore grooming, puppy schools and expert advice. Some operators will likely pursue an omni-channel approach and incorporate ecommerce channels, complete with subscription-based models, home deliveries and click-and-collect options. To Pets and Pet Supplies Retailers in Australia OD5128 October 2020 15 IBISWorld.com this end, industry players will likely invest in new IT platforms, including digital online booking platforms. Industry revenue is forecast to grow at an annualised 3.0% over the five years through 2025-26, to $3.4 billion. In addition, industry profit margins are projected to rise over the next five years as larger-scale pet superstores benefit from economies of scale and a greater reliance on both exclusive and private-label products. However, continued price-based competition is anticipated to limit the rise in industry profitability over the period. Changing pet ownership trends Pet ownership trends are forecast to continue gradually changing over the next five years. Social factors will contribute to this shift, as single-occupant households become more common due to higher divorce rates, the ageing population and people marrying later in life. As pets can provide companionship to people living alone, the percentage of households owning a pet is projected to increase. Ongoing urbanisation is also forecast to shape future pet ownership trends over the next five years. As Australians increasingly live in small units and high-rise apartments, the number of pet fish, birds and cats is projected to increase as inner- city dwellers seek low-maintenance pets that do not require a backyard. Consumers are also anticipated to increasingly favour smaller dog breeds as owners seek to downsize both their living space and pets. Furthermore, smaller breeds tend to live longer. Humanisation trends Ongoing humanisation trends are anticipated to shape the wider pet-care sector over the next five years. Recently enacted animal welfare legislation in the ACT, which sets to recognise animals as sentient beings that can feel and perceive the world, is indicative of these trends. This new animal sentience law represents an Australian first. A rise in pet ownership is anticipated to encourage greater overall investment in pet food, accessories and pet-care services. Consumers’ increased spending power is forecast to partly fuel this trend. However, the growing humanisation of pets will likely be the major reason for an increase in spending, as they are increasingly being considered family members. Consequently, many pet owners are projected to spend more on pet services to guarantee that their pets are provided with the best care. This consumer behaviour is also anticipated to extend to higher margin premium and specialty pet food. Gourmet pet foods designed to appeal to human tastes are forecast to become more popular over the next five years, as are high nutrition, science-based and fortified foods. In addition, pet healthcare products are projected to be a key growth driver as pet owners increasingly adopt a holistic attitude to their pets’ health and wellbeing. In some instances, larger players may seek to offer pet insurance. As a result, pet retailers are anticipated to benefit from higher spending per pet owner over the next five years. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 16 IBISWorld.com Performance Outlook Data Year Revenue IVA Estab. Enterprises Employment Exports Imports Wages Domestic Demand ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) 2021–22 3,017 499 1,969 770 7,260 N/A N/A 298 N/A 2022–23 3,143 518 1,993 768 7,395 N/A N/A 305 N/A 2023–24 3,248 535 2,011 767 7,469 N/A N/A 309 N/A 2024–25 3,328 544 2,013 764 7,479 N/A N/A 311 N/A 2025–26 3,408 561 2,021 761 7,579 N/A N/A 319 N/A Industry Life Cycle The life cycle stage of this industry is Mature LIFE CYCLE REASONS Pet humanisation and premiumisation trends are driving growth in an otherwise mature market The industry is characterised by falling enterprise numbers Online competition is a growing threat to the industry Over the past five years, the Pets and Pet Supplies Retailers industry has undergone substantial consolidation as supermarkets have increased their presence in the wider pet-care sector, causing many industry retailers to either downsize or exit the industry. This has been reflected in falling enterprise numbers. Furthermore, growing accessibility to a wider variety of pet care products and accessories online has meant items that would regularly sell for higher profit margins are coming Pets and Pet Supplies Retailers in Australia OD5128 October 2020 17 IBISWorld.com under pressure. In addition, product innovation has been slow, particularly as many products are not specific to traditional bricks-and-mortar retailers. Technological changes have also been slow and have primarily focused on improving operational efficiencies. These trends mean that the industry has entered a mature phase. Nonetheless, it is still recording healthy growth as specialty pet retailers gain ground in the wider pet- care sector. Many of the larger superstores have expanded their product and service offering to capture the strong growth occurring in other areas of the wider pet-care sector, including pet services and veterinary care. These strategies are driving foot traffic, as is the provision of expert advice and exclusive, premium pet food brands. The industry’s saving grace has been the rise of the pet parent phenomenon as doting pet owners increasingly grant their four-legged friends family member status. To this end, they have been prepared to spend higher sums to ensure their pets’ health and wellbeing, including on premium products such as fortified dog food or matching collar and coat outfits. These trends are expected to continue over the next five years, helping to sustain industry growth in otherwise increasingly challenging conditions. Over the 10 years through 2025-26, industry value added is expected to grow at an annualised 2.3%. This suggests that the industry is outperforming the wider economy, which is projected to exhibit annualised growth in GDP of 1.8% over the same period. This suggests that the industry is outperforming the wider economy. Growing external competitive pressures are expected to constrain industry growth over the next five years as a growing number of rival channels seek to cater to Australia’s increasingly indulged pets. Internet-based pet retailers are also expected to gain further traction in the wider pet-care sector as they successfully cater to millennial consumers, an increasingly important market segment. Supermarkets are also expected to fight back, with their own range of premium pet foods, thereby eroding one of the competitive differentiation points for specialty pet retailers. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 18 IBISWorld.com Products and Markets Supply Chain KEY BUYING INDUSTRIES 1st Tier Consumers in Australia KEY SELLING INDUSTRIES 1st Tier Prepared Animal and Bird Feed Manufacturing in Australia 2nd Tier Meat Processing in Australia Grain Growing in Australia Products and Services Owning a pet is a significant responsibility and owners can incur substantial expenses. Owners need to purchase food to ensure their pets are well fed and looked after. Owners have also increasingly pampered their pets with accessories and premium food offerings over the past five years. Pet food remains the largest source of revenue for the Pets and Pet Supplies Retailers industry, and is expected to generate over half of industry revenue in 2020-21. In contrast, pet purchases are anticipated to account for less than 5.0% of industry revenue in the current year, as purchasing a pet tends to be a one-off expense, rather than an ongoing cost. Pet food Pet food is the industry’s largest product segment, as all owners must purchase food to ensure their pets are well fed and looked after. Pets and Pet Supplies Retailers in Australia OD5128 October 2020 19 IBISWorld.com Most pet food sold is processed ready-to-eat kibble, canned food and packed treats. Pet