CapEx deep dive (II): pet retail investment shifts from expansion to optimization
From the UK to the US and Brazil, Pets at Home, Petco and Petz-Cobasi are recalibrating investment strategies after years of infrastructure-heavy spending.
A more cautious CapEx environment is emerging across global pet retail, as spending priorities move from rapid expansion to optimization, digital investment and operational efficiency.
Check out part one of this story here, covering general market trends and the role of fresh pet food and healthcare.
Retail investment to adapt
Retailers are investing to adapt. For instance, Joel Anderson, CEO of Petco, highlights the capital investment the American retailer is making to add more freezer units, as it anticipates growth in demand for fresh pet food.
“Some customers use it as a topper. Some customers use it as a full meal, sometimes you need fresh, and sometimes you need frozen, depending on how you’re using it with your respective pet. Big growth area for us, we’re really excited about it,” he said to investors.
The company anticipates a capital investment of approximately $140 million (€120M) for fiscal year 2026, at the upper limit of its planned investment for fiscal year 2025, between $130 million (€112M) and $140 million (€120M).
Pets at Home
Apart from that, retailers are an example of broader consumer groups that Reto Hess, Equity Strategist at LGT Private Banking, describes as now cautious with spending.
One example comes from Pets at Home. The British pet retailer invested £20.5 million ($27.2M/€23.5M) in capital expenditure in the first half of FY2026, a period ending 9 October 2025. The amount represented a £3.6 million ($4.8M/€4M) YoY decrease and accounted for only 1.95% of revenue for the period.
According to the firm, this was the result of normalization after “peak investment in prior years.” The spending was divided among strategic areas: £14.4 million ($19M/€16.5M) for the Pet Care Center estate, £5.1 million ($6.8M/€5.8M) for digital transformation of the business, and £0.4 million ($0.54M/€0.45M) for distribution operations.
During the earnings call, Ian Burke, then appointed Executive Chair, said that the company was planning to spend £125,000 ($166,404/€143,287) in stores. For the whole fiscal year, the retailer planned to round CapEx to around £30 million ($40M/€34M) in general.
“We intend to reset space within our stores to accommodate new products, but also to cater for growth areas like treats and click and collect. These space resets will be undertaken at significantly lower capital expenditures per store than the investments we have made in recent years,” Burke explains.
Petz-Cobasi
In Brazil, the combined capital expenditure of Petz and Cobasi, the country’s largest pet retailers following the recent merger, fell from almost R$300 million ($58M/€50M) in 2024 to R$242 million ($47M/€40M) in 2025.
CEO Paulo Nassar notes that this was due to a lower volume of store openings for both brands, with Petz launching 5 locations in 2025 and Cobasi opening 10. This year, the company expects to further reduce investments, as the number of new stores is expected to remain stable.
An additional R$31 million ($6m/€5.2m) was allocated in 2025 to the optimization of a distribution center, a non-recurring investment not expected to be repeated in 2026.