Walmart is doubling down on its expansion into the pet care market, unveiling a broader suite of services aimed at pet owners seeking affordable and convenient care options. On Tuesday, the retail giant announced the opening of five additional pet service centers in Arizona and Georgia. This move, which follows the success of its initial locations, marks a significant shift in Walmart's strategy as it pivots away from traditional human health services to focus on a growing sector that promises higher margins and frequent customer engagement.
The new pet service centers will offer a range of services, including veterinary care, grooming, and pet prescriptions, through a partnership with PetIQ, a leading provider of pet wellness and veterinary products. Kaitlyn Shadiow, Vice President of Merchandising for Pets at Walmart U.S., emphasized that the decision to expand the company's pet care offerings is rooted in the high demand and loyalty of pet owners. "If you think about pet services, the business case is there," Shadiow said. "We are already serving the needs of so many pet parents today, and it's a great opportunity for us to help do that in one convenient location or trip."
Walmart's pet services centers will feature a dedicated entrance separate from the main store, offering services like wellness exams, vaccines, minor medical procedures, and grooming for cats and dogs. This strategic move is designed to attract a broader customer base while driving foot traffic to the company's brick-and-mortar locations. Shadiow noted that approximately 25% of the customers who visited Walmart's first pet services location had never shopped at Walmart for pet items before, creating a "halo effect" that also boosted sales of pet food and supplies.
The decision to focus on pet care comes at a time when the pet industry is experiencing a boom in spending, partly driven by the surge in pet ownership during the COVID-19 pandemic. According to Morgan Stanley Research, annual household spending on pets is projected to reach $1,445 per animal by 2026 and could grow to $1,733 by 2030. The firm's analysis indicates that this trend will propel the industry to grow from $122 billion in 2019 to $261 billion by 2030.
Walmart's expansion into pet services is also a response to competitive pressures from other retailers like Chewy and Petco, which have made significant inroads into the high-margin services sector, including veterinary care. Petco, in particular, has successfully integrated its vet services into its retail model, making it a key player in the market. Walmart aims to replicate this success by offering a one-stop-shop experience for pet owners, combining products and services at affordable prices.
In addition to in-store veterinary services, Walmart has also enhanced its digital offerings for pet owners. Starting October 18, Walmart+ members will gain free, 24/7 access to veterinary care through a partnership with Pawp, a telehealth provider that allows pet owners to connect with professionals via text or video. This new benefit aims to provide quick and expert support for pet health concerns, underscoring Walmart's commitment to providing comprehensive pet care solutions both online and offline.
Venessa Yates, Senior Vice President and General Manager of Walmart+, highlighted the growing demand for telehealth services among Walmart customers. "A subscription to veterinary telehealth provider Pawp was used more than any other limited-time offer for Walmart+, which prompted us to turn that limited-time offer into a permanent benefit," Yates said.
Walmart's focus on the pet category is also strategic in reaching younger, more affluent consumers. Shadiow pointed out that Gen Z is the fastest-growing segment in Walmart's pet category, reflecting the demographic's increasing interest in pet ownership. Moreover, the number of customers with household incomes exceeding $100,000 shopping for pet items at Walmart has increased by 36% year over year.
This expansion into pet care comes at a time when Walmart has decided to close all of its 51 health-care clinics for humans, citing the "challenging reimbursement environment and escalating operating costs." The shift away from human health care towards pet services is seen as a more profitable venture, as most people pay for pet care out-of-pocket, reducing the complications associated with insurance reimbursements.
Walmart's broader strategy includes enhancing its in-store and online pet pharmacy services, where customers can easily fill prescriptions for their pets. The company has also introduced several new pet food and care brands to its shelves, further cementing its position as a key player in the pet care industry.
"Our goal is to replicate and scale the Walmart Pet Services model to other communities," Shadiow said. "We are focused on providing affordable, transparent care for pets and creating an all-in-one shopping experience that truly meets the needs of pet parents."
