Pet project

The Bunnings effect has swept across a swathe of retail sectors. Australians can wander through one-stop warehouses full of hardware, office supplies, groceries, clothing, furniture, automotive accessories and pharmaceuticals.

But until 2006, pet supplies didn’t enjoy the same ubiquity. This was an opportunity for brothers Nick Greenhalgh and David Rowe, who envisioned a warehouse-style pet supply store that incorporated quality products, expert advice and wholesale prices.

That year, they established the first PetO store in Sydney’s Northern Beaches. Today, PetO is a US$108 million (A$150 million) business with outlets across Australia and, as CEO Mike Hollis tells The CEO Magazine, the opportunities for further growth keep coming.

“We have 58 stores at the moment, but when you add in the grooming salons and vets, we have over 100 businesses,” he says.

“Just over two years ago, Woolworths acquired PetStock and had to divest 41 stores, which we picked up. That took us from being a Sydney-based business to a national entity. We operate in all states other than South Australia.”

Strategic reinvention

The PetO portfolio includes 25 grooming salons and, crucially, 25 vet clinics.

“We are a one-stop shop, particularly for dogs and cats. We do provide essentials for rabbits, guinea pigs and other animals, but it’s only two percent of the store space,” Hollis explains.

“We also don’t sell animals. That’s one of our values: we will never sell a live animal. We believe in adoption first.”

Hollis joined PetO as a result of the PetStock acquisition, and he says it was a challenging prospect.

“It was a fun call to receive. I was in semi-retirement, but I came in as an advisor around the acquisition,” he recalls.

“The brothers wanted to know how to scale the business and prepare it for a larger entity. Just a year ago, they persuaded me to become CEO, bless them.”

One of his’ first hurdles was to reinvent the incoming 41 PetStock stores, which did sell live animals.

“They had birds, fish and rabbits in cages, but they’re all gone now,” he says. “They had to learn to do things very differently and so did we.

“Not only did we go through the change of physically rebranding these stores and changing mindsets, but we had to protect the PetO DNA as we did so.”

Ambitious plans

Now, the company is emerging from that transition stage much stronger, and Hollis believes further growth is right around the corner.

“Our ambition is to reach 100 retail stores in the next two or three years,” he says. “Right now, we’re the number three player in the market, but we’re the only one of those three that could acquire smaller businesses. That’s an opportunity for us.”

Before that can happen, Hollis says he and PetO General Manager of Product and Brand, Joy Fong, will be spending time with suppliers, including Real Pet Food Company, to get them across their vision for the next three-to-five years.

“We’ll show them what we’re planning and invite them to join us on the journey,” he explains.

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One aspect of the PetO plan is to create an in-house product label that big suppliers can leverage.

“We want win–win relationships, and that’s a way to do it,” Hollis says. “They win in terms of growing their market share and volume, and we do the same.”

PetO’s suppliers come in all sizes and offer the market some unique products, he adds.

“We’ve got a supplier out in Western Australia who sent us a dog treat made from air-dried camel,” he reveals. “The dogs in the office went mental for it, so every dog in Australia is going to love it.

“It’s great that we’re small enough to partner with smaller producers like that, agile enough to try certain products in specific markets, but big enough to take them to a national scale.”

Real Pet Food Company is one of PetO’s most prominent and collaborative brands and suppliers, along with Royal Canin and Hill’s Science Diet. Hollis says that as a family-owned brand, PetO offers these industry heavyweights the dexterity of an independent and the muscle of a bigger player.

“One of the things we’re very conscious of is we don’t want to become a big corporate animal, so to speak,” he points out.

“We’re approaching that scale, but we’ve got to protect the real DNA of the business and remain able to make decisions quickly. We don’t have massive layers of bureaucracy.”

Celebrating culture

Hollis combats these wolves at the door by maintaining an open line of communication with his stores.

“I started my career in Tesco in the United Kingdom and was with them for 20-odd years,” he says.

“But the last job I had in the United Kingdom was a family business, and that teaches you the importance of a business’ culture. You don’t hide behind rules and processes; you employ the right people with the right values. You empower people to make decisions and try new things. If it doesn’t work, you try something else.

“I try to visit every PetO store every quarter and talk with the team to understand their challenges and celebrate their successes.”

Hollis says there’s another unique element of PetO that he often sees in-store.

“Having worked in retail all my career, when you’re working with pets, I can say you don’t see many angry customers because pets calm them down,” he says with a laugh.

“People come to our stores to spoil their pets rotten. There’s a lot of love in there.”

That translates to hiring, which has served the company well over his tenure.

“We get so many more applicants than we did even a year ago, and we look for pet parents,” Hollis confirms. “We tell our customers: We know what you’re going through, because we’re pet parents ourselves. That’s why we pride ourselves on price and advice.”