Petsmart 2005 Annual Report Download - page 23

program that builds on the initial reformat and emphasizes our highly differentiated training and adoption services.
We will refresh our existing stores with this new format in fiscal 2006, 2007 and 2008.
Expand our pet services business. Based on sales, we are the leading provider of pet services, which include
professional grooming, pet training, boarding and day camp. Pet services are an integral part of our strategy, and we
are focused on driving profitable growth in our services business. We believe services differentiate us from our
competitors, drive traffic and repeat visits to our stores, provide cross-selling opportunities, allow us to forge a
strong relationship with our customers, increase transaction size and enhance operating margins. In fiscal 2005, we
began the roll out of the PetsHotel
TM
, a full-service boarding and day camp service offered inside our stores. At the
end of the fiscal year, we operated 32 PetsHotels in our stores in addition to one stand-alone location and seven
additional in-store Doggie Day Camps that are not part of a full hotel, on our way to an ultimate build out of 300
hotels and 40 additional Doggie Day Camps. Pet services revenue, which includes grooming, pet training, PetSmart
PetsHotel and Doggie Day Camp, grew by 24%, 24% and 25% in fiscal 2005, 2004 and 2003, respectively. We are
confident in our ability to continue to expand the pet services portion of our business.
Through our strategic relationship with Banfield, The Pet Hospital, operating under the registered trademark of
Banfield, and with other third-party operators, we made full-service veterinary care available in 525 of our stores as
of January 29, 2006.
Offer superior customer service. Our emphasis on the customer is designed to provide our customers with an
unparalleled shopping experience every time they visit our stores. Using a detailed curriculum and role-playing
techniques, we educate store associates to identify customer needs and provide appropriate solutions. We measure
their success in every store, and a portion of the annual incentive program for managers, from the store level to the
executive team, is linked to key customer service and in-stock metrics. By providing pet parents with expertise and
solutions, we believe we are strengthening our relationships with customers, building loyalty and enhancing our
leading market position.
Differentiate ourselves through effective brand management. We are focused on developing and strength-
ening our brand identity. In August 2005, we announced a new marketing campaign that repositions the PetSmart
brand from its current reputation as a “Mart” to “Smart” which emphasizes our capabilities as a resource of
information, services and solutions. As part of the campaign, we changed our logo to highlight the “Smart” piece of
the PetSmart name and rolled out new advertising that emphasizes our unique offerings for customers.
We are creating tools to effectively communicate our unique value proposition and vision of providing Total
Lifetime Care
SM
for pets, and we continue to build enduring relationships with our customers. We continue to roll
out our customer loyalty program, the PetPerks»savings card. As of January 29, 2006, PetPerks was available in all
PetSmart stores capturing more than two-thirds of transactions and more than three-fourths of sales. We will
continue using a centralized customer database that allows us to track and analyze customer shopping patterns. We
intend to use this information to customize direct marketing and promotional materials and to more effectively
communicate with customers across all channels.
We believe these strategic initiatives will continue to drive enhanced comparable store sales growth,
profitability and return on investment.
Our Stores
Our stores are generally located in sites co-anchored by strong destination superstores and typically are in or
near major regional shopping centers. We are engaged in an ongoing expansion program, opening new stores in both
new and existing markets and relocating existing stores. Store activity for fiscal 2005, 2004 and 2003 is as follows:
2005 2004 2003
Store count at beginning of fiscal year ............................... 726 643 583
New and relocated stores opened ................................... 107 92 67
Closed stores .................................................. (7) (9) (7)
Store count at end of fiscal year .................................... 826 726 643
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