Rising pet ownership encouraged by covid lockdowns sees Woolies eyeing more opportunities
Dogs (and cats) could soon become the consumer defensive investor's new best friend, too
Source: iStock
Mentioned
KEY POINTS
- The value of pet food and accessories has become a more meaningful bet for publicly listed companies
- RIsing pet ownership, spurred in part by covid lockdowns, has led to a new enthusiasm for retail spenders willing to dish out more for pets (think: gourmet pet food)
- PETstock, the company on Woolworths’ radar, an impressive story of persistence, raking in $700m revenue in FY22
Woolworths Group (ASX:WOW) is reportedly seeking to acquire a major stake in unlisted pet food and accessory business PETstock as the former seeks exposure to record high levels of pet ownership encouraged by covid lockdowns.
Talking dollars and sense: people spend more on their pets, too.
This will not be Woolworths’ first foray into the pet-based sector; it already holds a large stake in online retailer PetCulture and offers pet insurance products in a JV with Hollard Group.
PETstock, like PetCulture, is dominantly an e-retailer.
Woolies already a large presence
By way of being Australia’s most valuable retailer, Woolworths is already a large player in the pet food and accessories market, given that it already has dedicated shelf space for these products in hundreds of stores across the country.
A large investment in PETstock is just the latest deal for Woolworths, who stand to significantly improve the former’s fortunes.
A long time coming for PETstock
That’s not the say PETstock hasn’t done well in its own 20 year history, recently hitting $700m in sales and $54m in profit (pre-tax) in FY22.
Profit jumped by over $20m compared to FY21, according to PETstock lodgements with ASIC.
The online pet food and accessories retailer has been busy acquiring businesses on its own right, buying a company in WA for $31m in July; as well as the east coast’s Best Friends Retail for $180m.
The shape of Woolworths Group's one year charts
