Finding a competitive advantage in the pet retail industry in 2026 appears to be a daunting task. The sector is feeling the pinch from online players that offer a wide variety of products and competitive pricing, as NielsenIQ notes in its industry trends report.
E-commerce and the digital transformation are undoubtedly heaping pressure on retailers, squeezing margins, shifting consumer behaviors and causing disruption to day-to-day operations.
But is it all doom and gloom for brick-and-mortar retail?
No. Despite the challenging landscape there is a real opportunity for businesses to turn disruption into advantage – using the very physical assets ‘under pressure’. Far from being a liability, the physical store, in my view, is the single biggest (and irreplaceable) asset independent and chain pet stores hold; a platform with which to create trust, demonstrate value and turn visitors into lifelong customers.
The strategy is straightforward: to provide an in-store experience that online platforms can’t compete with. It’s what we call “Pet Retail Theatre” and it’s the key to not just surviving, but thriving, in this evolving retail landscape.
Time to hold your nerve
It all comes down to experience. While online outlets may win on convenience, they can’t compete with the senses, human expertise and innovation that a well-run store provides. This is a physical store’s commercial differentiator – allowing you to showcase not just your stock, but your business capability and expertise.
Investing in experiential retail – engaging, interactive displays, live demonstrations, in-store workshops, expert-led sessions – is essential. It can increase dwell time, add tangible value and deepen customer relationships, converting passive browsers into purposeful buyers.
Central to this is the responsible sale of live animals from quality and regulated sources. When done professionally and humanely – with animal well-being front and center – live animals offer a critical competitive edge. You wouldn’t imagine a garden center without plants, so why a pet store without pets?
Thoughtfully designed, species-appropriate spaces that prioritize animal welfare and enrichment while creating clear viewing and engagement can instill trust and drive sales. A hands-on experience where the customer can see, touch and learn about their soon-to-be-pet, with support from knowledgeable staff, develops an emotional and trust-based relationship that just can’t be replicated online.
Retailers must also evolve their proposition to fit the times. Take Petco, for example, which expanded its offerings to incorporate veterinary services in store through its Vetco brand, positioning itself as a one-stop shop destination for all of a pet’s needs. Combined with omnichannel conveniences, such as in-store collection or local delivery readiness, businesses can adapt to cater to the various needs of the customer, while still leading them back to the shop floor.
Money, money, money
The global economic situation continues to generate uncertainty across the pet and vet sectors. The International Monetary Fund (IMF) forecast for 2026 puts the United States’ gross domestic product (GDP) at 2.1%, which is an improvement on its forecast in July, but well behind 2024 (2.8%).
Veterinary visitation habits in the U.S. are down by almost 3% year-to-date (YTD), according to the iVET360 2025 Benchmark Report. A recent whitepaper from Vetsource corroborates this decline, with data from the U.S. showing that pet owners are spending less in clinics on therapeutic diets, parasiticides and pharmaceuticals. Pet owners’ increasing usage of online pharmacies erodes a key revenue stream for veterinary clinics, showing how retail disruption is also reaching clinical care.
There are early indicators of a shift in pet ownership patterns, with the growth in cat ownership outpacing dogs in some markets, though average cat spend remains below that per dog. Given the different buying needs and patterns of dog and cat owners, there are commercial implications for this shift. Physical retailers should look to create differentiated value propositions for pet owners; membership clubs for dog owners can help address ownership costs that span both retail and veterinary and support owners in keeping their pets healthy, while generating recurring revenue.
Part of the family
It is not just the cost of living that is on the rise, so is our devotion to our pets who we increasingly see as family members. This might sound obvious, as pets have always been part of the family, but never more so than today; 97% of pet parents consider their pets as family, including 51% who say they count as much as human members, according to the Pew Research Center.
Pet humanization is not a trend but a cultural shift. Consumers are prioritizing quality, enrichment and wellbeing that mirror human care, encompassing everything from premium nutrition and healthcare to personalized services, grooming and wearable health devices. This shift will continue to drive product and service innovation across retail and veterinary care in 2026 and shape demand for higher standards, clear communication and personalized experiences.
The veterinary sector
Veterinary clinics can seize this opportunity by prioritizing welfare-led design and making it easier for clients to interact and stay connected with their pets receiving care – whether that’s live updates, streamlined check-ins or clear communication with owners on their pet’s health and care plans.
A first-class clinic can only start with a first-class floor plan. Leaning into the emotional bond between owners and their pets, clinics should put wellbeing at the heart of the patient journey, from the reception and waiting areas through to examination rooms and recovery wards.
Noise reduction (within kennels and the wider clinic), adequate lighting and ventilation, species-appropriate environments and operational flow are all key factors to consider. Dedicated waiting rooms, wards and specialized treatment areas for different species are now best practice, addressing distinct stress triggers and handling needs and creating safe, comfortable spaces for more efficient care and better clinical outcomes.
The benefits of these approaches are multifold: reducing animal stress, improving clinical outcomes and driving greater client satisfaction. These investments also improve the working environment and wellbeing of veterinary teams, many of whom are under great strain from ever-increasing workloads.
Transparency is an increasingly popular trend, with open layouts and glass partitions to showcase the quality of care being delivered, effectively removing the traditional divide between front and back of house, allowing teams to showcase the quality of care being delivered.
Retailers and clinics should focus their marketing to highlight the growing human-pet bond and encourage pet parents not to skip check-ups, routine appointments and follow-up examinations. It’s not about guilt tripping – this runs the risk of corroding trust between you and the customer – but empathetic education on the benefits of preventative care.
Gaining a competitive edge
For those looking to gain a competitive edge in 2026, remember that the benefits of e-commerce are also its Achilles heel. Lean into your strengths that the web cannot replicate and position animal wellbeing at the heart of your operations. Pet retailers and veterinary practices must invest in in-store and in-clinic experiences that draw people in, build loyalty and keep them coming back. That’s the key to building resilience in a shifting market.
Matthew Bubear is the CEO of CASCO Pet, a leading manufacturer of world-class animal habitats and veterinary kenneling. A disruptive innovator and entrepreneur, Matthew has more than 30 years of experience in the industry, with a passion for animal wellness at the heart of everything he does.
