Sluggish sales and online competitors push pet accessories retailers to adapt

Retailers are adjusting their expectations as sales of various pet accessories have slowed. The latest financial trends paint a clearer picture of how the industry is adapting to the change and offer hope of a rebound in 2025.

Less expenditure

Unlike consumable goods like food and medicine, which remain necessary through the life of a pet, discretionary goods are a tougher sell.

Buying one lead could mean a pet owner doesn’t need another for years. The same goes for beds and clothes, which can last a long time but are not essential to the health and wellness of a pet.

Inflation weariness could also be helping to slow down sales of accessories, even as the rate of inflation cools globally.

A 2023 survey by PETS International and Yummypets found that the high cost of living affected the financial situation of 85% of pet owners in France, Canada, the US and the UK.

The research also found consumers were most willing to cut back on treats (24%) and toys (22%), with a further 10% saying they cut spending on leashes or collars.

Countering the competition

Additionally, pet retailers have recently faced new competition in accessories, mainly due to the increased availability of cheap alternatives online.

Chinese e-commerce mega-retailers such as Temu and Shein offer a wide variety of pet accessories, from leads to grooming tools, at extremely low prices, some for less than $2 (€2).

As consumers remain tired of high costs, they may turn to these retailers for pet supplies when it comes to discretionary spending.

Absolute Pets, the largest pet retailer in South Africa with over 100 stores, is feeling this trend. In response, the Cape Town firm is considering new kinds of ‘entry-level’ goods – stripped-down versions of its typical products that could sell at lower prices.

It has also redoubled its efforts on social media and marketing, and in educating its workforce to push its higher-quality goods. “Previously, when the economy was a lot more flush, we didn’t have to focus so much on those things,” states Tonia Polderl, Planning Manager at Absolute Pets.

Polderl says that the pet retailer has put extra focus on all the basics “because of the crunch”, at the same time admitting that the price points offered by the e-commerce Asian giants are tough to compete with.

US retailers feel the squeeze

Some US-based pet retailers are also feeling the pressure. Central Garden & Pet’s pet segment posted a 2% year-on-year (YoY) decline in net sales for the financial year (FY) 2024.

With a forecast to return to profits late this year or in 2026, company CEO Niko Lahanas notes that the company is struggling to compete with the likes of Shein and Temu.

This has cut into the company’s sale of durable products like accessories. Thanks in part to the newly popular competition from abroad, Central’s pet sector sales of durables are down double digits.

Finding strategies to fight back

American pet retail chain Petco has also been promoting high-quality goods to overcome sluggish sales. CEO Joel Anderson recently told investors that offering ‘trend-ready’ products was key.

“It’s a truism I’ve seen through my decades in retail that if we present our customers with unique and trend- right products, we’ll accelerate our return to retail excellence, meeting pet parent needs and getting back to the heart and soul of pet parenting,” he says.

Some retailers are more insulated from the downturn in accessory sales. Services have been particularly strong, helping buoy many companies’ profits through the downturn.

At Petco, for instance, net revenue from services increased 10% between July and September 2024.

This includes mobile vet clinics and grooming services, which marked a bright spot in an earnings report that showed a negative 5% growth in discretionary sales.

The road ahead

With the newly elected Trump administration in the US, some in the pet industry have raised concerns that tariffs could slow growth, including in the already struggling accessory market.

While it’s unclear what impacts any future tariffs may have, some companies like Chewy have publicly breathed a sigh of relief – most of their suppliers and sales are based in the US, insulating them somewhat.

However, as inflation continues to fall from its historic high, there is reason to hope for a return to normal in the pet accessory market. The larger trends driving industry growth have not gone away.

At Absolute Pets, accessory sales have started to tick back upwards in recent months after 18 months of poor returns. “From what we’ve seen, we’re hoping [growth] continues going forward,” concludes Polderl.