Page 95 - 914INC - Q1 - 2013

Text by Amy Roach Partridge
“There has been a humanization of the pet market. As people become more aware of their own health and well-being, that outlook is coming down the pipeline into pet food.”
Photography by Gus Cantavero
MAKING PET PURCHASES PERSONAL
Pet Pantry’s financial success comes, in large part, from being in tune with the needs of its customers. The stores as a whole—which currently do an average of 2,750 to 3,000 transactions per week—con- tinue to experience year-over-year growth. The chain netted more than 5-percent growth last year, with two of its stores—the smaller locations in Larchmont and Rye— topping 10-percent in 2012. This organic growth has allowed the Jacobsons to bypass hard-to-find bank loans for Pet Pantry’s expansion, which this past fall included
the two new locations in New Canaan
and Wilton, Connecticut. These stores are expected to reach profitability within six months to a year of opening, mirroring the patterns of the chain’s other locations.
“We truly believe in the old-school way of doing business,” says Adam. “We want to know your name, and develop
a healthy, happy relationship with your pet.” While he concedes that it is hard for the company to compete with national chains and online stores strictly on price, Pet Pantry uses its attention to service and pet nutrition to differentiate itself from large chains and online retailers.
Its store associates, for example, must have past animal experience, and are
put through a comprehensive education program that includes training modules such as “Customer Service 101,” “In-aisle Product Introduction,” and “Advanced Animal Nutrition.” The total training lasts eight weeks, and staff members are tested upon completion. While the training is a big investment for the company, it is not one that it analyzes from a cost-benefit perspective. “The benefits are unquantifi- able,” Adam insists. “We don’t even factor it as an expense; we look at it as a necessity. Whatever amount we spend on staff educa- tion, it is worthwhile at the end.”
The company’s Larchmont outpost
is a good example of how this service- focused philosophy has helped Pet Pantry stay strong as national chains continue to encroach on its Westchester and Connecticut turf. Just months after Pet Pantry opened the Larchmont location,
Petco moved in a mere three miles away
on Boston Post Road. As a newcomer to the neighborhood, Pet Pantry was still working to establish its brand there, and did not yet have a loyal group of customers to count
on. “We realized we couldn’t outspend a
big national chain in advertising, but we could certainly work harder at developing lasting relationships with customers in the Larchmont area,” Adam Jacobson says. “So instead of trying to be like the big chains and follow their lead in the market, we doubled down on our training programs and cus- tomer service to compete.” The result? Since opening the Larchmont Pet Pantry location in March 2010, its month-over-month and year-over-year revenues have grown con- sistently. In 2011, the store’s first full year, it posted growth of 34 percent, and for 2012, Adam Jacobson reports the Larchmont loca- tion finished up with growth of more than 15 percent over the previous year.
Pet Pantry also introduced its Pet One Club loyalty rewards card as a way to bet- ter connect with customers. The program rewards members—who number more than 20,000 today—with in-store sales on top pet food brands. The company also communicates with its rewards-card mem- bers about informational lectures taking place in the stores and its many events in support of community organizations such as animal adoption groups. The cards also provide a savvy way for Pet Pantry to identify its best customers and to come up with ways to motivate less lucrative cus- tomers to shop more often.
FACING DOWN THE DOWNTURN
The company certainly has not been immune to challenges from the financial meltdown, however. It had to tweak its product mix, for example, to better reflect customers’ new economic realities. While shoppers are still committed to buying high-quality pet-nutrition products, they are no longer looking to splurge on extrava- gant items like cashmere dog sweaters and handmade, Swarovski crystal-embossed leashes and collars, which used to be hot sellers. “Sensing the shift in the market, we
began to unwind that product category and we refocused our merchandising mix on less expensive products,” Ari explains.
Pet Pantry also has been forced to wrangle with suppliers over increasing commodity and transportation costs that have caused pet food prices to spike. Prices for commodities like wild bird seed and sunflower seeds for instance, are up anywhere from 2 percent to 10 percent, depending on the manufacturer—a tough pill to swallow, since inventory makes
up a large chunk of Pet Pantry’s overall operating budget. The situation presents
a double whammy for Pet Pantry: The company is stuck paying higher prices for products at a time when its consumers are looking for lower prices in the stores.
“It’s a constant battle between fair pricing on the shelf and the margin integrity of our business,” Ari Jacobson explains. “We cannot always raise prices in order to make up the difference, so we are forced to fight hard with our suppli- ers to negotiate better pricing in order
to maintain a competitive price for our customers.”
For now, it seems Pet Pantry is win- ning the David versus Goliath battle.
Store growth has been strong across all its locations, and the new stores are besting expectations to date. Ultimately, though, the Jacobsons believe the company’s success is less about savvy financial methodologies and strategic competitive initiatives, and more about staying true to an old-school, community-based retail approach that reso- nates with modern customers in this region. “We believe consumers continue to sup- port our brand versus other pet food stores because we are a local, family-owned busi- ness with deep roots in our communities,” Adam says. “We truly care about them and their pets and we believe they feel it.”
That’s a sentiment Pet Pantry is bank- ing on.
Amy Roach Partridge is a veteran business writer and editor based in Thornwood. She has long been a cat lover, but if her 5-year- old daughter gets her way, she will soon be browsing the pet store aisles for puppy paraphernalia.
93
westchestermagazine.com