Lowe’s is opening petco stores in some of its stores as part of a pilot program. The first is scheduled to open in Texas in February.
lowes will soon be testing a new offer: A Petco Shop the stores where customers can buy dog food and kitty litter, and even visit a vet while shopping for paint and other materials for home projects.
The two retailers announced a deal Thursday to test the store-in-store locations. The first will open near San Antonio in early February, with 14 additional locations planned in Texas, North Carolina, and South Carolina by the end of March.
The companies declined to share financial terms or the length of the deal.
Lowe’s and Petco have been beneficiaries of the pandemic as Americans took on do-it-yourself projects and adopted pets while spending more time at home. However, retailers could face a more challenging backdrop in the coming months if consumers feel pressured by rising inflation or decide to spend a larger chunk of budget on vacations and nights out rather than pet supplies and home projects.
Lowe’s has been looking at new product categories to keep sales growing while benefiting from a strong real estate market. It added more home decor to its website and stores. It started an initiative to sell and install items that enable seniors to grow old in their own four walls. And it began piloting fitness equipment like treadmills, rowers, and free weights in about 20 of its stores. It already carries some pet-related items, like dog beds and pet-safe rugs.
For Petco, the curated version of its stores is a way to engage more shoppers and potentially get them to visit its larger stores and website as it competes with online players such as Tough.
Nick Konat, Petco’s chief merchandising officer, said he expects the stores will particularly appeal to DIY-savvy millennials. During the pandemic, many of these 20- and 30-year-olds have been leaders “Nesting” trendswhen they bought houses or moved to bigger towns, adopted cats or dogs — and in some cases treated pets as a “trial run” before having children, he said.
“They are high-spending customers and they really care about their pet like family,” he said. “And they’ve done the same to their homes, with many of them being new homeowners or new renters.”
Each shop will feature Petco’s cat and dog logo and merchandise, including some of its exclusive brands such as food brand WholeHearted and fashion brand Youly, as well as national brands. It will feature more than 700 items that customers can buy online and pick up in store if they live near a Lowe’s store that is part of the pilot. Some stores also offer services from visiting veterinarians and pet professionals, including vaccinations, microchipping, prescription pest prevention, and mobile grooming.
The store-in-store will vary in size, but the first location will be about 1,000 square feet and will be in front of the store, said Bill Boltz, Lowe’s executive vice president of merchandising.
The stores will be staffed by a Petco employee, in addition to those at Lowe’s, Konat said.
Other retailers have similar partnerships. aim made a deal with Ultimate beauty to opens curated stores in hundreds of its big box stores — and has similar shop-in-shops Apple and Disney at selected locations. cabbage signed a contract with Sephora to have its beauty salons in stores. Kroger will wear something bed bath beyond Goods in selected stores and Macy’s is Toys R Us stores open.
As of Wednesday’s close, shares of Lowe and Petco are both down about 12% this year. Lowe’s and Petco shares closed Wednesday at $228.10 and $17.43, respectively. Lowe’s shares are up nearly 31% over the past 12 months, giving it a market cap of $153.68 billion. Petco’s shares are down about 37% over the past 12 months, giving it a market value of $5.27 billion.