Petsmart 2004 Annual Report Download - page 25

marketing and store operations. During 2004, we opened 83 net new stores, and in 2005, we expect to open
approximately 100 net new stores primarily in multi-store markets. Approximately 35% of those store openings
are planned in markets in the Northeast and California where we are signiÑcantly under-represented. We
believe there is a potential for at least 1,400 PETsMART stores in North America.
Provide the right store format to meet the needs of our customers. We completed the conversion of our
store base to our new specialty store format in Ñscal 2003. We believe our reformatted stores, combined with
our other strategic initiatives, contribute to higher comparable store sales growth, proÑtability and return on
investment. We continually evaluate our store format to ensure we are meeting the needs and expectations of
our customers, while providing a return on investment to our shareholders. In Ñscal 2004, we completed the
roll out of an upgraded sign package to better serve the needs of our customers.
Expand our pet services business. Based on sales, we are the leading provider of pet services, which
includes professional grooming, pet training, boarding and day camp. Pet services are an integral part of our
strategy, and we are focused on driving proÑtable growth in our services business. We believe services
diÅerentiate us from our competitors, drive traÇc 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. Through our strategic relationship with BanÑeld, The Pet Hospital, operating under the
registered trademark of BanÑeld, we make full-service veterinary care available in approximately 430 of our
stores.
Pet services revenue, which includes grooming, pet training, PETsHOTEL and Doggie Day Camp, grew
by 24%, 25% and 29% in 2004, 2003 and 2002, respectively. We are conÑdent in our ability to continue to
expand the pet services portion of our business.
OÅer superior customer service. Our emphasis on the customer is an on going cultural shift 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 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 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.
DiÅerentiate ourselves through eÅective brand management. We are focused on developing and
strengthening our brand identity. We are creating tools to eÅectively communicate our unique value
proposition and vision of providing Total Lifetime Care for pets, and to build enduring relationships with our
customers. We continue to roll out our customer loyalty program, the PetPerks» savings card. As of
January 30, 2005, PetPerks was available in over 315 stores and 22 markets, and by the third quarter of Ñscal
2005, we intend to make the PetPerks card available in every PETsMART store capturing 70% to 80% of
transactions and 75% to 85% 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 eÅectively communicate with customers across all channels.
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 Ñscal 2004, 2003 and 2002 is
as follows:
2004 2003 2002
Store count at beginning of Ñscal year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 643 583 560
New and relocated stores opened ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 92 67 27
Closed stores ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (9) (7) (4)
Store count at end of Ñscal year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 726 643 583
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