High-end food and clothes retailer Woolworths has announced that it will buy privately owned pet retailer Absolute Pets as it expands into pet care, which it believes is a fast-growing market with “substantial growth potential”.
It will now compete with Checkers, which owns a smaller chain of pet stores called Petshop Science, as competition between the two retailers for the upper-middle-class consumer hots up.
More expensive and specialised pet food brands are not sold in grocery stores, but are only available in specialist stores or at veterinarians. This means if retailers want to capture the upper-end pet market, they need to own a specialised chain. Pet ownership also increased during the Covid-19 pandemic as people spent more time at home.
“It is also an increasingly important category for Woolworths customers, who consider their pets an integral part of their families,” the company, valued at about R67.3bn on the JSE, said in Tuesday’s announcement.
“The acquisition of Absolute Pets will accelerate Woolworths' pet strategy by bringing together two strategically aligned businesses, and position the Woolworths group well to become the end-to-end pet care destination of choice in SA,” it said.
Absolute Pets, which is owned by Sanlam Private Equity and the retailer’s management, was established in 2005 and has since grown its pawprint to 150 stores across SA, including online, pet spas and pet services.
The cash deal, subject to regulatory approval, will see Woolworths acquire 93.45% of the business upfront and the rest over a set period after the transaction has been wrapped up, with the Absolute Pets management team continuing to head the company under the current brand.
The amount of the deal was not disclosed.
CEO Roy Baggatini said at the year-end results in August that Woolworths was hoping to increase its stake in the pet market.
“We’re also building out our pet business, where we currently hold only a very small share of the R7.5bn market, that's growing in the double digits. We also know that a lot of our Woolies customers consider their pets to be an integral part of their family.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.