Pet Supplies Plus plots expansion as it passes $1 billion sales mark

Pet Supplies Plus (US) is ramping up ambitious expansion plans as it passes $1 billion in annual sales.

Pet Supplies Plus, whose pedigree goes back to 1988 and is approaching 500 stores, sees local ownership and serving community as its tandem tickets to more than $1 billion in sales this year. It is benefiting from a booming industry as pet parents dole out more and more cash for their furry, feathered and scaly companions

It's also a retail success story in a region that has few headquarters for major chain retailers and a data point for the notion that brick-and-mortar is far from dead.

The chain plans to open 50-70 more stores a year for the next several years. The current pipeline is 150. Right now 55 percent of its stores are franchised, but for new locations moving forward, CEO Chris Rowland sees that ratio tipping to about 90 percent franchised.

Part of its expansion strategy tested over the last couple of years is converting small businesses into franchisees. The first test case, an 8-year-old store in Pennsylvania, saw sales rise 25 percent after the conversion. Another agreement is in-process with a yet-to-be-named six-store chain in upstate New York.

"It became very obvious to us that with our systems ... we have a lot of really good behind-the-scenes processes that make it easy to run a pet store," Rowland said. "If we can help a local independent that's been in the local market in 10-20 years but is struggling because of e-commerce and a more competitive market, can't keep up with tech ... it became almost a no-brainer for us."

Pet Supplies Plus gets another store, while the local owners can be the face in the neighborhood — a quality of brick-and-mortar retail that shoppers seek, Rowland said. The chain is increasingly focusing on providing services such as pet washes, grooming, vaccination clinics and offering community space. He said none of these store conversions have taken place yet in Michigan, but he is in talks.

Local owners can keep a trace of their branding: The chain generally allows them to keep their name at the top left corner of the Pet Supplies Plus sign. Prices are generally 5-15 percent cheaper for consumers at a Pet Supplies store than an independent, locally owned store, according to Rowland.

Another enterprise whose calling card is locally branded stores under its umbrella is True Value Co. But True Value's model differs from a typical franchise.

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Source
Crain’s Detroit Business