Tractor Supply and Freshpet double down on digital to capture pet market share

During the 2026 Baird Global Consumer Conference and the Deutsche Bank Global Consumer Conference, executives from Tractor Supply and Freshpet outlined their latest strategies to strengthen their positions in the pet sector. 

Both companies pointed to increased competition, shifting consumer behavior and the growing importance of digital commerce, delivery infrastructure and services such as veterinary care and grooming as key forces shaping the category. 

Reaccelerating the pet business

Tractor Supply has identified reaccelerating its pet business as one of its two major areas requiring immediate action, alongside establishing a price/value competitive advantage in the market, according to President and CEO Michael Lewton.

In the latest earnings report for the first quarter of fiscal year (FY) 2026, ended 28 March, net sales increased 3.6% year over year (YoY). However, performance in the pet segment fell short of the company’s expectations for the period.

Competition and services shift

Pet supplies represent 20% of the company’s total addressable market (TAM), according to Lewton. He told investors that competition in pet retail is both increasing and shifting more online.

Additionally, the executive says consumers are making fewer shopping trips. “Retail is similar to 2018 and 2019, where it’s consolidating. Particularly with gas prices where they are, people are visiting a smaller number of retailers and consolidating their trips across those. This fares well for us, but we’ve got to make sure we fight hard for that trip.” 

Coupled with that, Tractor Supply said it is investing in expanding its service offerings, both in vet care and grooming. Experts project 5% to 10% revenue growth in pet services in the US, while the goods category is expected to decline by 1% to 2%. 

For instance, the retailer is planning to expand its recently acquired mobile veterinary care provider, VIP Petcare, to an additional 700 to 800 stores and is considering integrating the service into its loyalty program, Neighbor’s Club, to improve engagement.

Part of the company’s efforts this year is directed toward increasing investments in its final-mile delivery program. The retailer is using technology to build more efficient routes and create delivery hubs to decrease costs and improve efficiency, as online orders grow. 

Store investment

Tractor Supply will reset 70% of its dog areas in stores over the coming weeks. “We will redo the entire feed, snack and treats as well as wellness sections to include much more health, wellness and protein products,” the CEO said.

As part of this change, the retailer has also just completed the rollout of fresh food across 250 stores, as announced on the latest earnings call. 

The construction of new stores planned for the fiscal year is 10% cheaper than before due to a change in the lease model from an agreed-upon lease with developers to a model that helps fund construction. 

“Now what we’re doing with half of our stores is we’re using our balance sheet to fund that 18-month development cycle, and we’re paying the developer a flat fee. We’re saving 10% right there in the cost of building our stores,” Lewton explains. 

The return on investment for new stores is between 23% and 25%. The rates are the same as they were 15 years ago, indicating that online competition has not eroded stores’ capacity to generate returns. 

Expanding Freshpet’s consumer base

Freshpet wants to become – and be perceived as – more accessible. According to the CEO, Billy Cyr, the company has increased its share of middle-income consumers to 45% and placed 81 of its products in a price range up to $5 (€4.38). Its goal is to capture a larger share of the market and be more integrated into everyday pet meal routines. 

The pet player is also focusing its core strategy on what it defines as MVPs (Most Valuable Pet Parents), which now comprise 2.5 million households with high adoption of Freshpet products and are responsible for 71% of total revenue, according to COO Nicki Baty.

Although the company plans to remain media-driven, primarily through advertising on traditional TV and streaming services, it will also target digital channels. “We will be moving more of our money into social, influencers and digital engagement,” the COO says. 

Freshpet plans to allocate total media investments of $150 million (€131.42M) throughout 2026 to drive awareness and conversion.

Omnichannel growth strategy

A crucial part of the pet food manufacturer’s plan to acquire and retain more MVPs is to grow in mass, club, pet, and, especially, pure players, where the buy rate is much higher than in other channels at $394 (€345.19). The company is primarily aiming to increase sales on Amazon and Chewy, where it says 57% of customers on these channels are new to the brand. 

While the club retail channel in the US remains underpenetrated, Freshpet wants to profit from the category’s early entry into this channel, creating a mutual opportunity for joint growth. 

“Club retailers are also underpenetrated in pet supplies, and they are trying to expand. We just agreed to include a third product in the second largest club retailer in the US,” Baty told investors. 

The COO added that the company started a direct-to-consumer (DTC) business over the last year, which attracted 72% of new consumers. The plan is to continue growing this offering, which remains a small part of the business.