Pet Supplies Plus Expands as Americans Splurge on Animals

A small chocolate poodle on the grass. dezy/Shutterstock

A specialty store owned by America’s largest privately held pet supplies retailer is boosting its footprint in Tennessee and Texas, as young animal owners continue to fuel growth in the country’s $124 billion pet industry.

Pet Supplies Plus, a subsidiary of NASDAQ-listed Franchise Group, Inc., has sold more than two dozen franchises of its Wag N’ Wash brand to the company’s largest franchise partner, Pet Supplies Plus, announced today. The franchise operator, US Retail Holdings, plans to open 29 Wag N’ Wash stores over the next four years, mainly in Dallas, Texas, and Nashville, Tennessee.

Pet Supplies Plus has more than 640 locations in 40 states, making it the third-largest pet retailer in the United States in terms of store count, behind PetSmart and Petco. The Livonia, Michigan-based company sells a variety of pet-oriented goods and services, from foods and toys to dog grooming and pet medication. In February, Pet Supplies Plus acquired Wag N’ Wash, a small Colorado-based chain geared toward dogs and cats.

US Retail Holdings currently operates 49 Pet Supplies Plus stores in the South and Midwest, including a number of stores in Dallas and Nashville. The company said in March that it planned to add 20 Pet Supplies Plus stores to its portfolio over the next five years.

Franchise Group owns a number of brands, including American Freight, Silvan Learning, and The Vitamin Shoppe. The company spent about $700 million last year to purchase Pet Supplies Group from private equity firm Sentinel Capital Partners.

Sales in existing Pet Supplies Stores grew 6.2 percent in the third quarter, Franchise Group disclosed in an earnings call on Nov. 3. Franchise Group had total revenue of $1.1 billion during the quarter, with financial results above expectations for five of its six operating companies.

Americans spent $123.6 billion on their pets in 2021, up from $103.6 billion the previous year, according to the American Pet Products Association, an industry group. Pet food and treats made up $50 billion of the total, followed by supplies, live animals, and over-the-counter medicine, at $29.8 billion.

Morgan Stanley estimates that there are 5 million more pets in the United States than in 2019, with the number of pet-owning households growing by 4 percent. The investment bank projects an 8 percent compound annual growth rate for the pet industry by 2030, making it one of the fastest-growing retail segments. Household spending is expected to climb to $1,320 per pet by 2025 and $1,897 by 2030.

Pet ownership is increasing the most among people aged 18 to 24. The age bracket accounted for 32 percent of those who had bought their most recent pet in the last six months, according to Morgan Stanley survey data as of June this year.