Petsmart 2001 Annual Report Download - page 4

Packaged Facts estimates that U.S. sales of pet supplies, consisting of items such as dog and cat toys,
collars and leashes, cages and habitats, books, vitamins and supplements, shampoos, Öea and tick control and
aquatic supplies, were approximately $5 billion in 1999. Many types of retailers, including supermarkets,
discount stores and other mass merchandisers, specialty pet stores, direct mail houses, Internet retailers and
veterinarians, sell pet supplies. The channels of distribution for pet supplies are highly fragmented, with
superstores and discount stores estimated to account for over 50% of U.S. sales volume.
The Company estimates that total U.S. sales of equine food, tack, riding apparel and related supplies and
equipment were approximately $8.3 billion in 1999.
U.S. sales of pet services were estimated at approximately $9.5 billion in 1998. Major pet-related services
include veterinary care, grooming, and obedience training. The Company considers the pet services industry to
be highly fragmented and signiÑcantly under-served; many pet owners do not regularly use pet services due to
inconvenience, a lack of awareness or the cost of the services provided.
Merchandise
Merchandise, which represented approximately 96% of PETsMART's North American retail revenues in
Ñscal 2000, generally falls into three main categories:
‚Pet Food, Treats and Litter. PETsMART emphasizes premium dog and cat foods, many of which are
not available in supermarkets, warehouse clubs or mass merchandisers, as well as quality national
brands traditionally found in supermarkets and pet stores. The sale of pet food, treats and litter
comprised approximately 44% of PETsMART's North American retail revenues in Ñscal 2000.
‚Pet Supplies. PETsMART's broad assortment of pet supplies includes collars, leashes, health and
beauty aids, shampoos, medication, toys, animal carriers, dog houses, cat furniture and equestrian
supplies. The Company also oÅers a complete line of supplies for Ñsh, birds and small animals,
including aquariums, Ñlters, birdcages and small animal supplies. PETsMART has an equine
department in certain stores serving trade areas which have high rates of horse ownership. The sale of
pet supplies comprised approximately 49% of PETsMART's North American retail revenues in Ñscal
2000.
‚Live Pets and Other Goods. PETsMART stores feature fresh water tropical Ñsh and domestically
bred birds, reptiles and small animals. Live pets and other non-pet supply goods comprised approxi-
mately 3% of the Company's North American retail revenues in Ñscal 2000.
Pet Services
Unlike its principal competitors, PETsMART oÅers a wide range of services for the pet owner. Full
service grooming and pet training services are oÅered at almost all PETsMART stores. At January 28, 2001,
approximately 354,000 square feet of space, or nearly 680 square feet per pet salon, was allocated for grooming
services in PETsMART stores. The Company's pet stylists are trained through the Nash Academy and
Paragon School of Pet Grooming. A broad range of personalized services are available in PETsMART pet
salons, from toenail trimming to toothbrushing to a precision cut, shampoo, and style. Pet training services
range from puppy classes to advanced and private courses. Total revenues from grooming and pet training
grew nearly 21% from $76.0 million for the year ended January 30, 2000 (""Ñscal 1999'') to $91.9 million for
the year ended January 28, 2001 (""Ñscal 2000''), including a 13.4% comparable store sales increase.
Veterinary Services
The availability of comprehensive veterinary care further diÅerentiates PETsMART and reÖects the
Company's overall commitment to animal care. Full-service veterinary clinics in PETsMART stores generally
oÅer routine examinations and vaccinations, dental care, a pharmacy, and routine and complex surgical
procedures. The Company's prototype 2,000 square foot in-store clinic provides state-of-the-art operating and
examining rooms as well as on-site X-ray machines and blood diagnostic equipment. Through proprietary
computerized diagnosis software, these clinics oÅer customers more sophisticated services than traditional
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