Petco's CEO says the company can barely keep up with demand for training and grooming services after millennials and Gen Z bought 11 million new pets last year
- Petco is overwhelmed by demand for pet grooming, training, and veterinary services.
- Petco CEO Ron Coughlin told Bloomberg the growth is due to the rise in pet adoptions in 2020.
- Coughlin said 11 million pets were adopted in 2020, mostly by millennials and Gen Z.
Petco is trying to keep up with surging demand for its grooming, training, and veterinary services after millions of pets were adopted during the pandemic.
"Our training and our grooming is getting overwhelmed with demand," Ron Coughlin, Petco's CEO, told Bloomberg on Thursday. "Our vet hospitals and our vet clinics are having more and more demand as people feel more comfortable coming out."
Coughlin added that Petco is adding additional capacity to those services in order to keep up with the influx of customers.
Petco posted better-than-expected first-quarter earnings this week, adding 1.2 million new customers at the start of the year and reporting $1.41 billion in revenue. Coughlin told Bloomberg that the company's growth is due to the rise in pet adoptions in 2020.
"We saw 11 million new pets in 2020," he said. "The majority of pets were adopted by millennials and Gen Zers, and millennials and Gen Zers actually spend more on their pets."
Coughlin added that Petco is expecting a similar increase in new pets in 2021, and that the pet category as a whole is projected to grow 9%.
Throughout the pandemic, animal shelters and breeders reported shortages in pets, particularly dogs, as people looked for a "pandemic puppy" to provide companionship during a lonely year. More pet owners meant higher demand for pet supplies, and the time at home meant people started looking for ways to pamper their animals.
"Often, pet is a fairly recession-proof category," Rod Sides, vice chairman of retail and distribution at Deloitte, told CNBC last year. "Folks will continue to spend for their pets, just as they do for their kids and family."
That spike in pet ownership fueled the growth of several other pet-centric businesses. Pet-care startup Rover initially saw its business dry up when the pandemic forced people to stay home. But the surge in new pets and the ability for people to start leaving the house led to demand for dog-walkers once again - now, Rover is going public at a $1.35 billion valuation.
Other companies, like online pet pharmacy Chewy, pivoted their business to telehealth amid the pandemic, which resulted in sales spiking 50% in the second quarter of last year.