How is Europe’s leading pet retailer doing on its home turf?

Fressnapf is in the midst of a transformation. On stage at the GlobalPETS Forum almost 2 years ago, CEO Johannes Steegmann unveiled Fressnapf’s plans to develop its ecosystem in an effort to become a true ‘caring’ partner.

Here, together with Country Manager Germany Jochen Huppert, he reflects on what the European pet retail giant has been doing since then and looks ahead to the future.

How is your ecosystem rollout going?

Steegmann: We’ve made terrific progress, and the biggest transformation in our company’s history is going well. We’ve introduced new services like Fressnapf GPS trackers, digital insurance solutions, subscription boxes and more. By October this year, 80 stores will have our new store format.

Huppert: That new store format is key in telling the story of our new offering within the ecosystem. Our previous store format has been great at helping customers find the products they need. But to truly capitalize on our role as advisers and partners, this new format really opens doors for the ecosystem and helps educate consumers on new initiatives.

What have been the challenges?

Steegmann: Some massive developments on the data and technology front were needed to bring everything together. We’ve also opened new logistics hubs. But the biggest challenge for our customers has been inflation and rising prices. While we’ve given up some of our margin to protect consumers, eventually we were also forced to increase our prices. 

Now that prices of raw materials have started falling, we’re working closely with our suppliers to reduce prices again. First of all, we’ve started decreasing prices of many products in Poland, and this October we’ll also announce a big price drop in Germany.

Tell us about your ‘Friends’ program

Steegmann: A central part of our ecosystem is our app-based loyalty program, called ‘Friends’. We’ve rolled it out in Germany, Austria, France, Poland and Belgium, and we can see that it now accounts for more than 50% of our revenue across our e-commerce and bricks-and-mortar stores.

What about online sales?

Huppert: Right now, online sales account for 9% in Germany, 7% in Switzerland and 12% in Austria. While our e-commerce sales have tripled since 2019, online is still a growing segment, especially for basic products like toys or treats.

However, our brick-and-mortar presence will remain key in giving customers the guidance they want and serving them wherever they prefer in the moment.

How are your private label products doing?

Steegmann: Our exclusive brands are always very important. In fact, they are the biggest sellers in every country. And especially in these challenging economic times, it’s no surprise that good quality at a good price is becoming increasingly popular. We plan on increasing the share of exclusive brands to over 50% because we know how important they are. Moreover, private label products are a good way to attract customers to Fressnapf and to keep them in our ecosystem.

Are cats or dogs more popular in the DACH region?

Steegmann: When our in-house market research team compares pet owners in DACH to other countries, we see that there are more cats than dogs in these markets. For example, cats account for 70% of pets in Switzerland and 58% in Germany, plus Germany has the highest number of indoor cats (50% of all cats). In comparison, 76% of pets in Poland are dogs.

What else is special about pet owners in the DACH region?

Steegmann: Another interesting insight is that pet owners in DACH love to mix wet and dry food more than owners in other countries, and they are more likely to buy wet food. Therefore, our stores and offerings in the DACH region should reflect those differences. For example, we’ve introduced a meat corner because we saw that they are big fans of BARF: biologically appropriate raw food.

How do you view the ‘competition’ with supermarkets?

Steegmann: We believe strongly in the premiumization trend among our customers. As pets are increasingly seen as family members, more and different products will be needed – such as advice and special products for seniors, for puppies, allergies, diets and so on. That’s where we have an edge over supermarkets, so we think the premiumization trend will automatically bring a lot of new customers into specialty stores like ours.

Where do you see future growth opportunities?

Steegmann: Because Fressnapf is already a strong market leader in Germany and Austria, we intend to drive more expansion in Switzerland with a relatively bigger number of store openings.

Huppert: Germany will remain our biggest market. Nevertheless, we still have the potential to improve and grow here too. We are already world-class in the dog category, but we can still become even better in the cat category. And there are some interesting opportunities for wet and dry food, as well as snacks.