Country report Australia: The shape of the pet industry ‘Down Under’

Some 69% of Australia’s households currently own at least one pet (up from 60% before COVID) and, according to a recent survey by multinational Mars among more than 20,000 pet owners across 20 countries, Australians have high levels of satisfaction with cat and dog ownership.

In fact, 55% of dog owners in Australia rate their satisfaction as 10 out of 10, compared with the global average of 51%.

Gen Z owners are big spenders on pet care

There is a strong emphasis on pet health among owners, which has spurred growth in veterinary care, insurance and preventive health products.

A survey by comparison tool Finder among more than 600 pet owners concluded that Australians now spend an average of A$826 (€499/$519) annually on vet services. Gen Z owners are the biggest spenders at A$1,184 (€715/$744), while baby boomers spend the least on vet care (A$505 [€305/$317] in the past 12 months).

The Finder survey also revealed that 94% of Australians would pay money to save their pet from being put down, with 8% prepared to fork out over A$10,000 (€6,039/$6,281) on life-saving treatment.

On average, Gen Z pet owners would spend more than A$7,500 (€4,530/$4,711) to save a furry friend, while baby boomers would only spend about A$2,700 (€1,631/$1,696).

Rising trends in nutrition and technology

Specialized nutrition, supplements and grooming services are also popular in the country.

A recent survey by Melbourne-based non-profit organization Food Frontier found that 47% of dog and cat owners in Australia are open to changing their pet’s diet due to ethical, health and environmental concerns.

Technology adoption among pet owners is accelerating, with 1 in 5 Australians believed to monitor their pets via video cameras.

Overall, that amounts to 1.4 million Aussie households that have installed pet cameras. Millennials lead this trend; almost 28% admit to monitoring their pets remotely, compared to 20% of Gen X owners.

National retail players

In 2022, Woolworths Group – Australia’s largest retail group – expressed its intention to acquire a 55% stake in Petspiration, the owner of retail chain PETstock.

Following an investigation by the Australian Competition and Consumer Commission (ACCC), the deal was eventually allowed to go ahead in late 2023, provided that PETstock divested some of its assets.

To comply with these terms, PETstock sold 41 specialty pet retail stores, 25 veterinary hospitals, 4 brands and 2 online retail stores – including the Best Friends and Our Vet brands, My Pet Warehouse brand and online store, and the Pet City brand and stores – to PetO, a family-owned and family-operated business based in Sydney.

A credible new competitor

The move tripled PetO’s revenue to a reported A$200 million (€121M/$125M), and expanded the chain’s network from 17 retail stores in New South Wales only, to 58 retail stores across the country, including in Victoria, Queensland, Tasmania and Western Australia.

This has created a sizable new competitor in the Australian pet retail landscape.

“The ACCC picked up the sense that Australia was heading towards a duopoly in the pet market… and what consumers want more than anything is a healthy choice and a credible third alternative,” says PetO co-founder Nick Greenhalgh. “If you only have a choice of two, and one is owned by Woolies and the other by private equity, it’s not always your desired choice.”

PetO spent the second half of 2024 rolling out its brand across the newly acquired stores. “We now have nearly 1,000 colleagues around Australia, which means we have a bit of harmonization to do,” commented Greenhalgh shortly after finalization of the deal. At that time, his aim was to be 95% rebranded by the end of last year.

E-commerce still on the rise

As in other countries, online shopping skyrocketed in Australia during the COVID lockdowns, firmly establishing itself as the ‘new normal’ in consumers’ eyes, and pet owners are no exception.

According to e-commerce data analytics site ECDB, the monthly online revenue of the Australian pet supplies market was A$73 million (€44M/$46M) in November 2024 – a rise of 16% compared to October 2024.

The Australian pet supplies e-commerce market was on track to hit A$761.66 million (€458.99M/$477.2M) by the end of 2024, making up 8% of the country’s hobby and leisure e-commerce market. And with an annual growth rate of 9.6% over the next four years, it’s expected to grow to A$1,100.28 million (€663.22M/$689.4M) by 2028.

In-store advice remains key

Big names such as Pet Circle, Woolworths, PETstock and PetO currently dominate the e-commerce business. However, these local players face stiff competition from global giants like Amazon, Temu and Shein, which leverage extensive distribution networks and rock-bottom prices to entice consumers and win market share.

Greenhalgh isn’t too worried about this development, however. In addition to its e-commerce presence, PetO is also focused on providing a great customer experience in its bricks-and-mortar stores.

“We are Australia’s largest store for dogs and cats, we devote more than 90% of our floor space to dog and cat supplies, which means we offer customers a much greater product range in those categories,” he says.

“Because we focus mainly on those animals, we are able to buy in bulk, have big warehouses and are able to pass on the savings we get as a result to the consumer.”

He explains that Australians are so attached to their pets that they value expert advice about their care and diet – and this is only available when shopping in stores. “People walk into our stores armed with more questions than answers, and because of that we need to give them more authoritative answers than just what’s on the package,” he says.

Speed of delivery is a growth area

Additionally, to compete with global operations such as Amazon or Temu, PetO offers a 2-hour service for web purchases. According to Greenhalgh, this is especially popular for deliveries of pet food.

“One area in e-commerce that is growing is speed of service, and a lot of our sales are now through the 2-hour delivery model. At the end of the day, up to 30% of pet owners run out of food, and there are only so many places you can get it, especially if it’s premium food, which is only sold in specialty stores,” he comments.

Industry demonstrates resilience

As for the broader pet supplies retail industry, he says it remains resilient despite cost-of-living pressures. “People are really preserving their spend on children and pets, and from our clinics we can see there is still an appetite to adopt pets,” adds Greenhalgh.

While people may be dropping some discretionary purchases such as pet accessories and beds, the appetite for premium food and pet care remains strong, he concludes.