Petco

[Anonymous]

There is nothing wrong with the big stores as long as they are quality joints. If Petco changes and drops their old ways maybe they will be a contender. I like mom and pop stores, but if Walmart comes to town I'll go there if the price is right. Sorry mom and pop.

Time will tell.

I have to say I'm impressed by the new petco setup. I'll gladly buy corals from Petco if they are nice and cheap. It's all about price. IF I could get that yellow finger leather for $20 at petco, Guess what- I'm taking it home.

I try to support ma and pa stores, but price is what gets me. I know about the bigger markup on inventory from a small store. I understand they have to do that to make a buck. I support them when they are close in price, but if we're talking a $20 difference on a bucket of salt, I'll go with petco.

B

I guess that pretty much sums it up. CHEAP

To hell with what's right for the good retailers and the reefs.
Hey Dizzy, Jenn and Rover aren't you glad these guys aren't in your neck of the woods? (It's a southern phrase)

 

[JennM]

Thing is, there are thousands of people with the same attitude, in EVERY neck of the woods.

I'm as frugal as the next guy - hell I used to write for the "Miser's Gazette" but it's not just about money but "value added" as you have all heard me say ad infinitum.

I wish I had a dollar for everybody who has bought a powder blue tang at the local franchise full-line store about 20 miles away, only to discover that it doesn't fare well in a 29g tank, and gets ich and spreads it to every other inhabitant.

Each week I must field about 10 calls from people I've never seen/heard of before, asking me to make an over-the-phone diagnosis, and they get short when I can't wave a magic wand and instantly diagnose and treat without ever having seen the fish in question. Why? Because they buy cheaply and uninformed, at whatever shop has the lowest price, and when they have a REAL problem, they call a REAL LFS.

Perhaps we need to start charging for phone advice? Might be the only way to stay afloat...

Jenn

 

[Anonymous]

Rover, I don't think you were able to get a gander at certain "privileged" information at any point, were you? I can tell you that I was, and the profits in dog food are there. From what I've heard through the grapevine, they still are. Don't believe me?

There isn't that much "priviledged information in this industry. They don't make very much money per bag. I know, because that's how they changed the face of the industry so drastically. When a Petsmart opens up, they typically sell their food at below cost for the first six months just to draw people in. The strategy is volume. It doesn't matter if you only make a dollar a bag if you sell 10 million bags. So we are both right. At the end of the year, food may be where the bulk of their profits are from, but because of the volume, not the profit per bag.

Hmm.. nice little dance there. I made a basic statement that held very true ten years ago, and, to the best of my knowledge still holds true. While you're thinking "pet trade" industry, I'm thinking "corporation" industry, and I doubt strongly that you have any inside information - unless you were privy or have someone on the inside feeding you certain information. Petco's profits, and huge profits at that, are in dog food.

I was the outside hire when they tried exactly that.

Didn't work very well did it?

No, it didn't.

I'd thought that they had truly burned some bridges with the vendors I lined up, so, again, I really want to know who is behind all this, and who's supplying them.

 

[Anonymous]

how much do y'all think it actually costs to make a #20 bag of dog food (given current mass manufacturing processes) ?

 

[Anonymous]

There is nothing wrong with the big stores as long as they are quality joints. If Petco changes and drops their old ways maybe they will be a contender. I like mom and pop stores, but if Walmart comes to town I'll go there if the price is right. Sorry mom and pop.

Time will tell.

I have to say I'm impressed by the new petco setup. I'll gladly buy corals from Petco if they are nice and cheap. It's all about price. IF I could get that yellow finger leather for $20 at petco, Guess what- I'm taking it home.

I try to support ma and pa stores, but price is what gets me. I know about the bigger markup on inventory from a small store. I understand they have to do that to make a buck. I support them when they are close in price, but if we're talking a $20 difference on a bucket of salt, I'll go with petco.

B

I guess that pretty much sums it up. CHEAP

To hell with what's right for the good retailers and the reefs.
Hey Dizzy, Jenn and Rover aren't you glad these guys aren't in your neck of the woods? (It's a southern phrase)

No that doesn't sum it up. What does sum it up is a cheaper QUALITY product. If Petco can clean up their act and teach their employees and upgrade their facilities(as it looks like they may be doing). Just as Walmart sells the same watch as mom and pop for half the price. Same watch + less $ =no brainer, buy at Walmart. If Petco stays the same old Petco then I'll shop elsewhere. Give them a chance.

Don't just blame the big guys either. I've been to many a mom n pop store and found deplorable conditions as well. I do not know where to start about the bad info I've gotten or heard from a mom n pop store.

 

[HClH2OFish]

I agree with this....it's not that Petco is a big retailer....it's that they have deplorable husbandry. If they clean up their act and actually start taking care of their stock and educating customers, I don't think I'd have any problem whatsoever with buying something from them.
It's not a 'corporate vs. little guy' thing here...it's 'noncaring profit-driven company vs. knowledgable, helpful company'
I think if Petco gets their head out of their @#$ *that's* when the mom and pops may have something to fear.
I just don't see it happening anytime soon....

 

[Juck]

Give 'em a chance,, let's all loosen our sphincters and wait a couple of months,,, and see how they do.

 

[Black96WS6]

Perhaps if I hurry and get a fish from Petco after it's just opened, I can get it cheaply and it's still too early for it to have developed ich yet LoL!

 

[dizzy]

As a long time brick and mortar retailer I'm certainly no fan of Petco or the suppliers who helped them gain market advantage. I have read many a quote in the pet industry publications by Brian Devine (Petco CEO) bragging about how Petco would be putting all the independents out of business. Perhaps we are seeing the beginning of the end for the small independent brick and mortar store that don't do maintenance or provide other services.

A quick story for my fellow brick and mortars: We often get people who drive the 55 miles from Nashville to our store in Bowling Green,KY. In the normal course of bs-ing they usually get around to telling me who they go to in the music city. Aquatic Critter is usually the store we hear about most often, but Emerald Bay has been making some inroads in the past year. Anyway this new lady comes in and tells me she got her stuff at Petco. Petco I say. 8O She then tells me someone comes over and cleans her tank. I say it is someone that works with Aquatic Critter right? No she says it is someone that works with Petco. 8O Petco I say? 8O 8O It turns out that Petco is now working with maintenance people in a sort of win-win situation. Petco refers them business and they make themselves available to answer advanced questions. Petco gets some of the expertise and experience they lack in house, and the hose sucker gets referrals. Now I have found some of the advice the lady is getting to be a little off at times, but none the less it is better than what most of us have grown to expect from that particular big box.

When you look at the pictures of the new tanks and fixtures it is obvious Petco is taking this thing serious. Someone is giving them pretty good advice and I have a pretty good idea who it is. I recently had a customer tell me that the local Petco is redoing their saltwater section and if they spend the bucks here in this small town, I think the rest of the country should consider themselves forewarned. At the risk of sounding like a broken record I will once again remind the other brick and mortars that they should really consider joining the new AMDA. The issues of dealing with the big boxes and with etailing has united us like nothing before. There is some real talent on the BOD and we are working hard to level the playing field before it is too late. Don't listen to the nay-sayers. AMDA is genuinely trying to help you.
Mitch

 

[Anonymous]

how much do y'all think it actually costs to make a #20 bag of dog food (given current mass manufacturing processes)?

Is that with the bag? With the bag.. I'm gonna guess $2, and that's gonna include overhead.

 

[mark78]

Wow lots of valid points.

Its hard to say, here in Dallas we have a Petco or Petsmart (often next to each other) every 10 miles if not more. Dispite this, the LFS's in the area (one has grown AMAZINGLY, 3 new stores, the newest being 10,000 sq/ft in 8 years). There will always be a number of people who will pay the extra money for good advice and quality.

Those stores typically do not make money on the livestock but on the peripherals, and from what I've been told by someone in one large chain, they actually expect the aquatics dept to lose money but it's well offset by the profits gleaned in other departments - they make money on foods, toys, collars, beds, kennels and stuff and the aquatics stuff is there for the convenience of the "pet parent" so he can have one-stop shopping for all his companion animal needs.

Very true. Even most LFS don't make money on fish, once you factor in salt and water for water changes, food, shipping, bags, rubberbands, things to disinfect your nets, and the labor for taking care of it all. Fish are there more for the foot traffic and formality then profit, if you want to stay competitive. Dry goods and food are the money makers in any pet industry. This trend may be changing more with more people propogating and breeding.

Livestock are not the big money makers for pet stores. Dry goods is where the money is at. Dry goods can be bulk shipped and broken down in a central warehouse. This warehouse could supply every Petco for 400 miles or more. Once you have this its really a small feat to setup a holding and livstock areas in your warehouse. Now Petco is ordering huge boxes of livestock directly from EXPORTERS and shipping them to thier central warehouses instead of say, All-Seas, possibly effecting All-Seas supply and the supply of many LFS. Now Petco is making the profit All-Seas would of, and is also able to charge a little less for the product.

I was recently laid off by a company that dev'd software for the grocery industry. Let me tell you, as said before the WalMart threat is VERY real. Many of the smaller and even some of the larger grocers across the country have started a group called X-Wal, with the sole purpose of gaining buying power to complete with WalMart. WalMart is severley hurting the grocery industry for one, not to mention the other 100000 products they sell.

Then again they could just kill everything they get due to incompetent help. If petco can pull off keeping quality help in thier aquatic stores, then the LFS may have more to worry about. I would think a large corp. such as petco able to pay a bit more then a mom and pop type, then again they have investors and a stock profit to keep afloat which will help fight this effect.

My landlord tried to evict me last month in order to move in a Pet Supplies Plus.

Lol a Pet Supplies Plus opened in a strip mall in a walmart grocery parking lot. It was out of business in under 6 months, no kidding. Let him move them in haha.

There have always been huge profits in dog food, just because of the amount you sell, 10-20% is a LOT. Heck my neighbor on one side of me alone has 3 huge dogs.

When I am shopping for a new piece of livestock, I visit about 5 different stores to see who has the best specimen for the best price etc...2 Petcos are included. I have taken to buying most of my freshwater fish at petsmart. Dry goods are ordered online or bought from petco/petsmart when possible. I am not proud of it but I am far from financially set either, and face it this is an expensive hobby Then again I am not the average hobbiest, and usually do not need or want the advice of a LFS.

One thing rings true throughout this thread, customer service and quality will mean the most. WalMark carries the same cerial as Safeway, theres not much to it. When dealing with aquatic livestock theres a huge difference. If I owned a B&M I would be mostly concerned with loss of dry good revenue.

A lot to be seen / speculate about, keep your fingers crossed for the little guys who have made the hobby what it is.

 

[Kalkbreath]

The people that set up the new marine reef selection in the Petco in SD was most likely Coast tropicals or Aquaco. They supply most of the stores in that area as a wholesaler. The other brick and mortar store in the same area as this particular Petco is located .......Banded together a few years back and formed A"cartel" {as they called it } to band together as a group of stores to increase those stores buying power. "Fontaines"was one of the stores. Does anyone here visit the other B&M stores that compete with this Petco?.....................................If you think the idea that Petco is entertaining the thought of going after the reef market........Keep this in mind ......the guys that started Petco , also bought out Seagrest farms the giant fish importer last year. Central pet, the giant Florida dry goods wholesaler now owns some of the big time industry manufacturers like Kent Marine , Aquarium systems, instant ocean , and such . Petco has enough money to buy a base ball stadium..........what makes you think they wont want to add to their collection and buy up the marine hobby manufacturers. I say within five years, Petco will own Kent marine , Allglass, Aquarium systems , three more big time fish importers and a foot ball stadium. ........ :wink:

 

[danmhippo]

Very true. Even most LFS don't make money on fish, once you factor in salt and water for water changes, food, shipping, bags, rubberbands, things to disinfect your nets, and the labor for taking care of it all. Fish are there more for the foot traffic and formality then profit, if you want to stay competitive. Dry goods and food are the money makers in any pet industry. This trend may be changing more with more people propogating and breeding.

very true, I know several LFS that I've been to make most of their earnings on services.

 

[Money Pit]

The new AMDA? What happened to the old one?

 

[Anonymous]

Don't worry about them buying anyone else. If you look close all of their equiptment is made by Marineland. It looks like they are sponsoring Marineland and I'm sure they got that stuff for nothing(or severely discounted) just so Marineland can tout their name. So I wouldn't be quick to say they spent a lot on the new setup.I'm not saying that they are not changing teir evil ways though. I'm sure Allglass and the others are safe.

Just compare Petco to Home Depot(only certain aspects apply due to the difference in stock). Go to your mom and pop hardware store for Southdown sand...oh that's right they don't have any, and if they do it's probably $8 a bag(2x's the HD price). I'll bet that 9 out of 10 of the folks here get their hardware from HD or Lowes. Why? The price of course. I cannot imagine that it is the customer service. The HD near me have terrible CS. You can't find anybody on the floor and if you do there's a line of 10 waiting for his help. The checkout people are lazy. They try to send you back down the aisles to find prices and loudly say it's break time and walk away from the register. Then you wait ten minutes for the other CO girl to come. HD carries things the little guy never would. Ask any contractor if they get a lot of their stuff from HD and Lowes. Of course they do. It is cheaper and they carry everything all under one roof.

Personally I don't think the little guys are going anywhere. If petco and the internet hasn't done it yet it's never gonna happen. I usually go to the local guy because I trust his livestock and I have a good relationship with him. His drygoods are too expensive, but if I'm in a pickle(pump burns out) I go to him even though I can get it cheaper at petco.

 

[dizzy]

Go to your mom and pop hardware store for Southdown sand...oh that's right they don't have any, and if they do it's probably $8 a bag(2x's the HD price). I'll bet that 9 out of 10 of the folks here get their hardware from HD or Lowes. Why? The price of course. I cannot imagine that it is the customer service.

Around here we can't go to the mom & pop hardware anymore. Lowe's and Home Depot put them all out of business. There are a couple of larger lumber companies that have managed to survive that sell some hardware. The pricing at Lowe's & HD is not really all that cheap. I think these stores get good margins on many non loss leader items. We have to go head to head on pumps, liners, fountains, etc. and we can match and still make money. In some cases we are actually cheaper than they are. The thing that irks me is that these chains only sell items that turnover quickly. Certain bolts & nuts and specialty tools that the independent hardware store used to sell are MIA at the big box home improvement stores. Their lumber is certainly no cheaper than it is at the other places. Service here too, is virtually nonexistant.

Question for kalk: Since Petco owns Segrest, they why do we see the SunPet truck at the local Petco?

Money Pit the new AMDA is the old AMDA with new priorities that reflect the changing times. We are slowly witnessing our members being picked off one at a time. We really can't do much to effect positive change if we get forced out of business, now can we? BTW Steve is still spearheading the drive to get nets into the hands of the fisherfolk. The retailers on the BOD support the net fund, but are seeking a level playing field for independent brick and mortars. Read the AMDA letter posted on the industry forum.
Mitch

 

[Anonymous]

Mitch, Petco operates by districts when it comes to their livestock. They're served by many wholesalers. BTW, expect more of these "super stores" in the near future., although, you can't call it a flagship store if more are planned in the near future I'll do the next photo shoot in a few monthsv

 

[Anonymous]

LOL This thread contains some serious gems.

1. Why does anyone think one business is more or less deserving of your money? Petco and your LFS both exist for profit and no other reason. Otherwise, your LFS owner would just be called a hobbyist. Petco is owned and ran by people too, isn't it? For that reason, perhaps petco is more deserving of your money. They employ more people, who all have families to care for. If you're really so moralistic, spend your money where it will do the most good.

2. Why do some tolerate the arrogant attitude of entitlement from LFS owners. You know what I mean. The evil eye you get if you mention petco, etc ... look buddy, I'm sorry they're wrecking your already slim profit margins, but clue up. If you resist change, you'll lose. Adapt or die. The economy is an experiment into commercial darwinism. All the grumpy LFS owners out there should be jumping right into online orders, yet I think less than 30% of LFS have an online presence, with only a small portion of those having e-commerce capabilities. When LFS owners can deliver me cheaper prices, then they deserve my money. Expecting to get thanked for bilking me out of an extra 20% on all dry goods and equipment is retarded. Consumer power, HIYOOOO!

3. In ten or twenty years, when online ordering (hellaciously cheap, for those of you that haven't caught on yet hehe) has matured, perhaps even Petco will be crushed by it. What if there were no petcos and no LFS' to visit? Who would you villify then? Woe, the internet!

4. Did you know that the % of land given over to farmland in America in 1900 was much higher than it is now? Modern technology and farming practices allow a smaller number of people to work a MUCH larger amount of land. I think I read that farmland comprised 35 or maybe 40% of the national acreage around 1900 ... and I think recently it's like 15-20% ... that's millions of acres recovered. What does this mean? Consider it:

1 Back in the day there were lots of farmers.
2. Then something changed (technology), and we didn't need as many.
3. Now the ruffled feathers have all been smoothed out.

See the parallel?

...

Petco isn't perfect, but neither is any LFS. However, LFS owners, with few exceptions, are reluctant to change with the times. Petco is one of the more calamitous examples of change. They found a better way to do something and it's causing distress to competitors.

Perhaps we should start aquaculturing LFS owners, before they're extinct.

 

[Anonymous]

LOL This thread contains some serious gems.

1. Why does anyone think one business is more or less deserving of your money? Petco and your LFS both exist for profit and no other reason. Otherwise, your LFS owner would just be called a hobbyist. Petco is owned and ran by people too, isn't it? For that reason, perhaps petco is more deserving of your money. They employ more people, who all have families to care for. If you're really so moralistic, spend your money where it will do the most good.

I don't think the average Petco employee has a family to take care of. Petco is a corporate conglomerate that is working on taking as much of the market share the traditional pet store that built it. They aren't in it because of there love of animals, pets, the environment or whatever, they are in it solely for the profits. While the average LFS also expects to make a profit, many of them are also in it because of their love for pets and pet owners. (Of course the good vs bad here can be debated ad infinitum).

2. Why do some tolerate the arrogant attitude of entitlement from LFS owners. You know what I mean. The evil eye you get if you mention petco, etc ... look buddy, I'm sorry they're wrecking your already slim profit margins, but clue up. If you resist change, you'll lose. Adapt or die. The economy is an experiment into commercial darwinism. All the grumpy LFS owners out there should be jumping right into online orders, yet I think less than 30% of LFS have an online presence, with only a small portion of those having e-commerce capabilities. When LFS owners can deliver me cheaper prices, then they deserve my money. Expecting to get thanked for bilking me out of an extra 20% on all dry goods and equipment is retarded. Consumer power, HIYOOOO!

Internet ordering works because they can sell a lot of items at lower margins. Very few internet sites create new customers, so all etail is dependent on the stores constantly creating new customers and selling the big bulky fragile aquariums that no one else can afford to ship. If you think that every single LFS out there can be successful on the internet, you're crazy. The more internet stores pop up, the less customers each individual site gets, the less volume, the less profits, soon enough prices are going up because advertising is becoming crucial to get your name out there amidst the 4000 other reef related pet sites. As marketing becomes necessary in order to gain customers margins decrease and prices go up. Either that or prices continue to go down to the lowest bidder, until it'snot even worth the manufacturing price. Everyone loses. Every store having an etail presence isn't the answer. The end result is two or three very large companies making very little money. Then the lfs's start dropping off, slowing the growth of the customer base which leaves these remaining internet companioes fighting over fewer and fewer customers dropping prices even further. Until there is no reason to be in the business because none of the customers are willing to pay enough money (because of their attitude of entitlement) to make any money in this business. And if there isn't any money to be made, there isn't a reason to be in business. No one wants to do this for free. So we offer the convenience of being able to see products before they are bought, an easy return process, and free advice. All for a measly 10-20%. Not to mention all of the money we put into attracting new people into the hobby to increase the customer base, which increases volume at the manufacturing level, increases funding put into R&D, improves shipping and handling issues, improves efficiency as businesses strive to improve margins, and lowers prices for every one. If the LFS's can increase the number of people getting into the hobby I guarantee you that in 5-6 years (probably less) we will have a MH kit for under $200 bucks. That will be because of the growth of the industry spurred at the independent LFS level.

3. In ten or twenty years, when online ordering (hellaciously cheap, for those of you that haven't caught on yet hehe) has matured, perhaps even Petco will be crushed by it. What if there were no petcos and no LFS' to visit? Who would you villify then? Woe, the internet!

The hobby would be dead.

4. Did you know that the % of land given over to farmland in America in 1900 was much higher than it is now? Modern technology and farming practices allow a smaller number of people to work a MUCH larger amount of land. I think I read that farmland comprised 35 or maybe 40% of the national acreage around 1900 ... and I think recently it's like 15-20% ... that's millions of acres recovered. What does this mean? Consider it:

1 Back in the day there were lots of farmers.
2. Then something changed (technology), and we didn't need as many.
3. Now the ruffled feathers have all been smoothed out.

See the parallel?

People have to eat, they don't have to keep aquariums. People covet what they see, without a store to walk into I don't think the hobby will continue to grow. If the hobby doesn't continue to grow, prices go up. As prices go up, people bargain shop more. Soon the internet is the only place that go do it. End result, you are paying current LFS prices plus shipping from an etailer, with no customer service, no visual inspection prior to purchase, a buy and you're stuck with it return policy, and Fed Ex Ups hassles. Sounds lovely.


/grumpy LFS owner mode off...

My store is about the size of a Petco, so I have been thinking about them since we opened. I have taken great pains to stock items that they don't, or to be price competitve on the things they do. It's been proven time and time again that a good store *can* compete with them if they take the time to plan for it. If you take a good look at the selection of most of the box stores out there, it usually a bunch of crap. And still over priced. The concerns are not in direct competition with them, (or even the internet), but if they make inroads into the distribution and manufacturing. Suppose Petco bought Kent or Marineland. That would mean that everytime I purchased those products for sale in my store, I would be giving money to my strongest competitor. That already happens at the distributor level. Central Pet owns several companies, every time another distributor orders a truck from those manufacturers, they might as well be sending a check ditrectly to their competition. When the issue becomes a limited commodity (livestock) the issue becomes even more disconcerting.

 

[dizzy]

Petco is one of the more calamitous examples of change. They found a better way to do something and it's causing distress to competitors.

I'm just curious Hwarang as to what you think this better way is? The guys who started Petco came over from other industries when they saw possible dollar signs. They were not people who got into the pet business because they love animals. They started out selling mostly dog food. They eventually put in animals as a draw so they could sell more supplies. They have never acted like they gave a happy rat's ass how many animals they killed in the process. We frequently have people coming in our store telling us how bad it stinks at Petco and about dead animals in the cages. There are plenty of other threads here too where other people are saying the same thing about their Petco. You must be a pretty heartless guy. The slaughter of animals is acceptable to you as long as you can save a buck or two.
What really gets to me is the double standard your applying here. For them to use purchasing power to gain an advantage is good business. For lfs to join together to increase purchasing power it is backwards. I'm going to stop right here. I'm not having very good thoughts about you right now and I might say something I wish I hadn't.