Petco

[DaisyPolyp]

DaisyPolyp,

Where exactly is it in Escondido? I'm in San Diego too...

off the 15 right before the 78.. west valley parkway exit.

 

[dizzy]

Since your relatively new in the industry I can forgive the fact that you haven't witnessed Petco's rapid expansion first hand like many of us have. I'm happy your confident in your abilities, but whenever I hear someone tooting their own horn I just shake my head. The best praise will be that which comes from customers and not from owners or staff. Retention of customer base can be attributed to several factors. One is that some people appreciate good advice. Two others are competitive pricing and great variety. Sounds like Petco will be able to compete on at least two of the three. The danger that you apparently fail to seee is not that they might locate a store right next to you, like they did to us, but that this huge chain might be able to suck up the lions share of the most desirable fish and corals. It's called purchasing power and it's one of the first lessons retailers learn in the school of hard knocks. If you don't think Petco will use muscle to gain an advantage over lfs you got another think coming. That's all I'm saying so don't get defensive.
Mitch

 

[DaisyPolyp]

...By the time one of these marine Petcos gets around to opening up near me, I'll be retired...We are continuing to grow as a business, and they remain stagnant...because they are in a holding pattern while we rise means we have the stranglehold.

…now that statement strikes me as unbelievably naïve… maybe it’s just because of my location near San Diego and the fact that our new stadium is called…uh… PETCO PARK! Now I don’t know how much it costs to get a stadium named after you, but I’m guessing the Giants or the Bills won’t be playing in a stadium named after your shop anytime soon. Maybe you need to have 650 stores in 43 states (not to mention a website).

By the time they open one up near you, you’ll be retired? They have 2 located 30 miles from you, and this is from their Q1 financial statement:

"Our principal format is a 15,000 square foot superstore, conveniently located near local neighborhood shopping destinations, including supermarkets, bookstores, coffee shops, dry cleaners and video stores, where our target "pet parent" customer makes regular weekly shopping trips."

"PETCO's strong operating margins reflect our successful execution of our long-term growth strategies and further enable us to reinvest in our business and implement such initiatives as our remodel program and the opportunistic acquisition of selected locations," commented Rodney Carter, Senior Vice President and Chief Financial Officer.

PETCO opened 19 new stores during the first quarter of fiscal 2004. The addition of 15 new stores during the period, net of relocations and closings, increased the store base to 669 locations. PETCO will continue to advance its national brand presence in 2004 by opening approximately 90 new stores

Oh, and in that same statement, they posted their sales numbers:

426 million in revenue
Net Earnings Increase 42% to $0.27 Per Diluted Share
Comparable Store Sales Increase 6.3%
Raising 2004 Earnings Outlook to $1.43 to $1.44 per Diluted Share

…now I might not buy fish there, but I sure as hell would buy stock. And my LFS? They’re too worried about stocking enough goniopora and dendro’s to match their inventory of so called “live rock” at $6.95 a pound (with much base rock attached).

 

[Anonymous]

I'm one of those who experienced firsthand Petco's expansion abilities (and other unmentionables). :|

 

[Anonymous]

i've seen a kmart get built and opened from the bare ground up in about 3-4 months :wink:

 

[mark78]

Petco is a stock I wish I had bought 2 years ago, nuff said

 

[Expos Forever]

I got the chance to work at a fish store when I was recently laid off. Strictly taking care of the marine section, in many ways, my dream job (except for all the actual work involved .

Despite all the talk (mine) when the money talked, I walked. I'm now back to do something I really don't like, if I'm honest with myself. All in the name of paying the bills. We are very lucky that these "mom and pop" places exist, and that their are owners like Mitch (clearly smart people who very likely could make an easier, more financially rewarding living, doing something else).

Imagine a well informed hobbiest can actually walk into a fish place and GET advice. I don't know Petco's pay structure but a marine "superstore" staffed with people who kept a goldfish in grade school is a pretty scary thing to me. There are knowledgeable Petco employees and crappy LFS's, but the Mom and Pop stores, generally speaking, are the backbone of this hobby. I want to buy my marine creatures from someone who actually got into the business because of an interest in these animals, as opposed to someone adding on a marine section to their dog food display.

 

[Anonymous]

Since your relatively new in the industry I can forgive the fact that you haven't witnessed Petco's rapid expansion first hand like many of us have.

Our store has been open 7 years. I've been here 4.

I'm happy your confident in your abilities, but whenever I hear someone tooting their own horn I just shake my head. The best praise will be that which comes from customers and not from owners or staff.

If you'd like to me collect all the praise from my customers, with pictures of their successful tanks, that can be arranged.

I say it b/c I'm the one reading the thread.

Retention of customer base can be attributed to several factors. One is that some people appreciate good advice. Two others are competitive pricing and great variety. Sounds like Petco will be able to compete on at least two of the three.

We can be competitive to a point where our customers will stay. I'm pretty confident of that. Hell, we're competitive with the internet prices, and keep people coming back even with that temptation.

The danger that your that you apparently fail to seee is not that they might locate a store right next to you, like they did to us, but that this huge chain might be able to suck up the lions share of the most desirable fish and corals. It's called purchasing power and it's one of the first lessons retailers learn in the school of hard knocks. If you don't think Petco will use muscle to gain an advantage over lfs you got another think coming. That's all I'm saying so don't get defensive.
Mitch

I'm not trying to argue with you, I'm just trying to point out why I'm not worried. I doubt Petco will be able to suck up the lion's share of anything. If that were true, then the Home Depot and Lowe's that opened up in Rome would have put the four local hardware/lumber places out of business in short order, whether through price or through stock hoarding.

Plus, a Petco will never open up in Rome. I can guarantee you that.

Peace,

Chip

 

[Anonymous]

I'm not trying to argue with you, I'm just trying to point out why I'm not worried. I doubt Petco will be able to suck up the lion's share of anything. If that were true, then the Home Depot and Lowe's that opened up in Rome would have put the four local hardware/lumber places out of business in short order, whether through price or through stock hoarding.

But that's the whole point. Manufacturers can always increase production of hard goods (nails, 2x4's, plywood, pvc, etc.) to meet increased demand from new companies opening up. Fish and corals don't come from factories and production plants.

 

[Anonymous]

…now that statement strikes me as unbelievably naïve… maybe it’s just because of my location near San Diego and the fact that our new stadium is called…uh… PETCO PARK! Now I don’t know how much it costs to get a stadium named after you, but I’m guessing the Giants or the Bills won’t be playing in a stadium named after your shop anytime soon. Maybe you need to have 650 stores in 43 states (not to mention a website).

All I'm saying is that Petco will not affect our business much. We have Pet Supplies Plus, Petsmart, Walmart, Lowe's, and other business that directly compete with all the stuff we sell (we're a full-line shop), and none of them have made a dent. We continue to grow and expand. We've tripled in size since we opened, and will expand again next year.

the time they open one up near you, you’ll be retired? They have 2 located 30 miles from you

They do? That's odd, I hadn't noticed...maybe that's because business is very good and I don't have to notice...

……now I might not buy fish there, but I sure as hell would buy stock. And my LFS? They’re too worried about stocking enough goniopora and dendro’s to match their inventory of so called “live rock” at $6.95 a pound (with much base rock attached).

Right, but I'm confident for the reason that I'm NOT a store like your local shop. I don't stock gonis, or dendros, flame scallops, or any of that crap. We sell tank-raised and aquacultured corals when we can. We stock everything net-caught when we can. I do my best to educate the customer so they have success.

Again, I'm not trying to argue, just trying to explain why I'm not worried about it.

Peace,

Chip

 

[Anonymous]

But that's the whole point. Manufacturers can always increase production of hard goods (nails, 2x4's, plywood, pvc, etc.) to meet increased demand from new companies opening up. Fish and corals don't come from factories and production plants.

Are *you* worried, Glenn?

Peace,

Chip

 

[Anonymous]

Also, I doubt a Petco will open up in every single market where there are mom & pop stores in this entire country while I'm working in the industry. It's simply not possible.

Peace,

Chip

 

[dizzy]

Also, I doubt a Petco will open up in every single market where there are mom & pop stores in this entire country while I'm working in the industry. It's simply not possible.
Peace,

Chip

I agree with you here Chip. I think they're only interested in going into communities where the mom and pops are doing good business. :wink: We got one in little ole town of 48,500. If you've got both a Lowe's and a Home Depot I'd say your defintely a big enough market area for a Petco. Pittsburgh has 9 Petco and 9 Petsmarts in additon to the 6 Pet Supplies Plus that were there first. Never say never my friend. BTW Pittsburgh is only 1.1 million population. According to my atlas Rome has over 45k. As my buddy kalk would say "do the math".

 

[monkeyboy]

I agree with Chip, a good store with knowledgeable staff and a quality product will indeed develop a pretty good strangle hold on the other local businesses if they don't deliver similar service. It happens in my area every day, people converting over to the outdated and just plain bad advice given to them by the other crappy stores over here. Once they realize that you have a clue and the other guys don't, you've got them for the duration of their hobby.

 

[krullulon]

i think it's too difficult to say which way it will go. 8)

the walmart phenomenon is very real -- thousands of mom & pops have been driven out of business by walmart simply due to convenience and prices -- great service has not saved them.

but things are a bit different in a highly specialized hobby that relies upon the knowledge of employees for long-term customer success -- when petco moves-in and offers the newbie the entire universe for a 30% discount over the LFS, newbie probably goes there... but after a year when they've experienced their 5th tank crash due to bad advice or incorrect information and they've never been able to solve their algae bloom, they either exit the hobby or find the quality LFS that can save their investment. and certainly anyone who has been in the hobby for any length of time will most likely avoid petco like the plague.

the above is a slightly idealized scenario, but a key ingredient in this hobby is indeed the individual expertise of employees. unless petco can woo the skilled aquarists from the LFS then i think in the long-run the quality LFS will be able to maintain a niche as folks buy mistreated or inappropriate livestock and receive bad advice from the mega-chains.

that said, walmart went on a pretty aggressive campaign in a number of markets to hire the mom&pop employees... when petco begins having dedicated department employees with a high level of competence, that's when it's time to be seriously afraid for the longevity of the LFS.

i do think, however, that it's always prudent to keep a very close eye on the competitive landscape... worrying that you'll be crushed by da man and continuously adjusting tactics to changing market conditions isn't a bad thing. :wink:

 

[DaisyPolyp]

OK, hot off the memory stick:

 

[DaisyPolyp]

2:

 

[DaisyPolyp]

3:

 

[DaisyPolyp]

4:

 

[DaisyPolyp]

...today they added some LR, Tonga Branch... looked pretty decent. The employee said that they were going to be stocking a lot more stuff.