Adapting to the needs of rural consumers

Pet retailers have traditionally tried to place themselves as close as possible to large urban communities, where the biggest demand is concentrated. However, amidst a reported spike in spending among non-urban pet parents, Petco recently announced its first rural concept store in the US. Various other retailers are also considering a range of options to expand their footprint in rural communities.

The potential of rural areas

Petco claims it sees “untapped potential” of $7 billion (€6.5 billion) in the pet retailing market in the small towns of America. The US Bureau of Labor Statistics (BLS) found that the total consumer spending on pets increased by 133.9% in rural areas between 2019 and 2020, whilst pet spending in urban areas decreased by 9.4%. Even if pet food is excluded, the total expenditure on pets in rural areas still rose by 26.9% in the same period.

Another study by the University of Denver, published in the Journal of Applied Animal Welfare Science, concluded that rural communities had an 11.5% higher rate of overall pet keeping and a 19% higher dog ownership rate than urban communities.

Petco’s approach

The Californian pet retailer Petco is strategically placing Neighborhood Farm & Pet Supply Centers at the heart of small towns and rural communities. The centers offer high-quality products and services curated for a unique market. They are expected to serve as one-stop shops for health and wellness solutions for pets as well as farm animals such as horses, cows, pigs, sheep, goats and more. The retailer launched its first rural store in Floresville, a village in Texas with just over 7,000 inhabitants. The company has not disclosed its future plans for rolling out the project in other territories.

Canada

Just over the border, Canada’s leading pet retailer Pet Valu is already well-established in the rural market. Around 40% of its stores are located in small villages, 40% in suburbs and 20% in urban areas.

“We have a highly localized retail strategy, enabled through over 700 small-format stores across all 10 Canadian provinces, two-thirds of which are operated by franchisees embedded in their local communities,” says a company spokesperson.

Pet Valu allows its store operators to customize their product offerings to suit the needs of their customers. For example, the Canadian retailer has an expanded offering of accessories for hunting and fishing dogs in the more Northern rural markets of Canada.

“We often see greater demand for larger food bags in rural communities versus our urban stores, and so we adapt the bag-size offering accordingly,” adds the spokesperson.

Fressnapf spots potential

Europe’s largest pet store chain, Fressnapf, currently serves rural communities through its online channel, but it also sees the potential in expanding its own offline concept in rural environments. “We are currently in the process of developing a rural store concept that is tailored to the customer needs in these areas. We are convinced that this new concept will open up further sales potential,” the company told PETS International.

In the near future, the German retailer hopes to incorporate a shop-in-shop concept offering a more comprehensive range of products and services tailored to rural customers. This concept is already in place in Fressnapf’s XXL stores, which are mostly located in big cities. “We are thinking of using a smaller version of this concept as a module in our smaller stores, which are also in urban and rural areas,” the company comments.

A study by Pets for Life, using information from over 67,000 people and 127,000 pets in rural communities in the US, found that a huge number of pets are being underserved in regard to healthcare. The incorporation of vet and health services is one key innovation Fressnapf would like to include in its rural concept stores.

City versus rural locations

Meanwhile, Plaček, which operates 300 pet stores in the Czech Republic, Latvia, Poland, Slovakia and Romania, is also “innovatively tackling” the rural market. It opened a 24/7 Super zoo store in Týn nad Vltavou, a municipality with 8,000 inhabitants south of Prague, just a few months ago.

Consumer behavior is one of the biggest differences between pet stores in big cities versus rural communities. Despite the reported increase in overall pet spending in rural locations across the US, the companies interviewed said they find customers living in rural areas still spend less than their urban counterparts. “Customers living in big cities spend an average of 30% more than customers living in rural areas. We think this is because they are more aware and engaged with their pets at home than when they are out in the garden or on their land,” says a spokesperson for Plaček.

Distance

The distance traveled by the customer is another factor worth considering. One benefit is that isolation in rural areas means competition can be slim. The stores interviewed said their main competition generally comes from supermarket chains, giving them a significant advantage in terms of product range.

Also, whereas city stores benefit from more frequent walk-in customers, customers in rural locations are more likely to have to drive. This opens opportunities for the expansion of the product range in rural locations. At Pet Valu, they capitalize on this by expanding the trade areas of their stores. However, the Canadian retailer points out that rural pet stores fall short in terms of online-generated sales. Fressnapf agrees, highlighting the availability of omnichannel services in urban versus non-urban areas as a key difference.