Traditionally, most supermarkets dedicate the majority of pet aisle stockkeeping units to dog and cat items. However, a handful of grocers have begun to re-evaluate the array of animal species they cater to and, consequently, products designed for hamsters, birds, fish, ferrets, snakes and other more unusual pets are starting to make an appearance in some stores.According to statistics from Information

Traditionally, most supermarkets dedicate the majority of pet aisle stockkeeping units to dog and cat items. However, a handful of grocers have begun to re-evaluate the array of animal species they cater to and, consequently, products designed for hamsters, birds, fish, ferrets, snakes and other more unusual pets are starting to make an appearance in some stores.

According to statistics from Information Resources Inc., Chicago, for the 52 weeks ended Sept. 8, 2002, non-dog/cat pet food sales in total U.S. supermarkets, drug and mass merchandisers, excluding Wal-Mart, were $173 million, an increase of 2.9% over the previous year. Unit sales were 55,101,476, a 1.4% increase, and the average weekly items sold per store were 24.1, a growth of 0.9 from the previous year.

A 2001-2002 pet owners survey provided by the American Pet Products Manufacturers Association, Greenwich, Conn., revealed that nearly 40 million households in the United States own a dog and 34.7 million own a cat. Yet, the popularity of other animals is increasing, with 12.2 million households owning freshwater fish; 0.7 million having saltwater fish; 6.9 million households having a pet bird; and 5.5 million owning some sort of small animal, which can include anything from rabbits, gerbils and guinea pigs to hedgehogs and potbelly pigs.

The APPMA survey also revealed where pet owners tend to purchase pet supplies. According to the results, owners of dogs, cats, birds, small animals and fish overwhelmingly choose to stock up on pet supplies at discount stores such as Wal-Mart, Kmart and Target. Small pet stores and grocery stores were next and, surprisingly, pet superstores like PetsMart and Petco were consumers' third choice for purchasing these items.

The Penn Traffic Co., which operates 216 stores in six states, has subtly increased the variety of pet products it carries in its stores, aside from the standard dog and cat items. "We offer products for all of the more popular small animals, including birds, fish, hamsters, ferrets and snakes, but we don't put as much of an emphasis on products for these animals as we do on products for cats and dogs," said Marc Jampole, spokesman. "The section for these other animals is definitely there, but tends to be small in our supermarkets."

In order to compete against big box retailers and pet supply stores, Penn Traffic's stores offer a wide variety of brands, types of products and even package sizes. And, the stores have recently begun to carry premium dog and cat foods such as Iams and Purina ONE. "One of our strategies is to offer more 'gourmet' foods for cats and dogs," he said. According to Jampole, while price and variety enable Penn Traffic stores to compete, they have an additional advantage over pet supply stores in that consumers are already making routine trips to the supermarket and, therefore, purchasing pet food there becomes more of a convenience. Haggen, Bellingham, Wash., is hyping its pet aisle through the use of aggressive promotions. The company's stores, which operate under the name Haggen Food and Pharmacy, are currently offering shoppers a pet club that enables them to save $5 on pet supplies for every $50 they spend on similar pet products.

The pet club, aptly entitled "Preferred Pets," boasts the slogan, "A club designed to help you reward your best friend, your pet!" The Haggen loyalty card must be used in order to get the $5 rebate good toward a future purchase of pet products.

However, other retailers told SN they take a much different approach to the pet aisle. Fresh Encounter, Findlay, Ohio, views the category as nothing but a convenience for its consumers. Eric Anderson, senior marketing manager for Fresh Encounter, said direct competition with pet supply stores seems futile, and points to the small size of the chain's stores as the main reason for its lack of aggressiveness in the category.

"The category killers like Pet Supply and Petco have made it nearly impossible for independent grocers to compete," said Anderson. "We mostly concentrate on dog and cat products since these are still the top two species of pets people have. We do have a little bit of space dedicated to birds and fish, but it's mostly dog- and cat-related."

Fresh Encounter carries everything from regular and diet formula pet food to specialized treats, pet medication and a select few grooming items.

"I liken the pet category to diapers," Anderson said. "The Wal-Marts of the world offer so many varieties at low price points that we can't compete effectively, so we simply try to get consumers to buy these items while grocery shopping in our stores."

Consequently, Fresh Encounter occasionally promotes an array of convenience items simultaneously as a reminder to their shoppers that they carry the extras they might not expect to find in a supermarket.

"We promote them like seasonal items and try to get people thinking that if they need something at the last minute, they can get it from us," he said.

"This includes pet food, diapers, seasonal candies and even things like light bulbs and extension cords that they might not normally have on their grocery list."

In the future, Anderson expects the "category killers" and mass retailers to take even more of the pet aisle share. As a result, Fresh Encounter will potentially diminish the number of offerings for various pet species and ultimately carry the most popular brands only, he said.

Highland Park Markets, Glastonbury, Conn., also boasts some pet items other than cat and dog products, but according to grocery manager Tim Cummiskey, doesn't allot even a small amount of space within the pet aisle for such goods. -

"We carry some bird, hamster and fish foods and other similar products, but our main items in the pet aisle are predominantly for cats and dogs," said Cummiskey. "We have everything else for different types of pets on a small endcap since they aren't the big sellers."

By merchandising the second-tier pet items in this manner, the supermarket is able to easily move the endcap from one location to another to make room for more important products if necessary. And, by keeping these products out of the pet aisle, there's more room for a wide variety of dog and cat SKUs, which are undoubtedly in the highest demand, he said.

"From my experience with pet-owning shoppers, those that have more exotic or unusual pets have a stronger tendency to go to a pet supply store or other stores to buy food and other products," he said. "We have some customers who have fish, hamsters or pets like that, so we carry a small selection of pet supplies for them, but we don't even promote those types of products in weekly circulars."

Instead, Highland Park advertises special pricing and sales virtually every week on cat and dog items and assumes that consumers with other types of pets will easily see the pet endcaps.

Dahl's Food Markets' pet aisles look much like the average aisles in many smaller, independent chains. "We just don't do that much business in the pet aisle in general," said Ross Nixon, vice president of merchandising for Dahl's, Des Moines, Iowa. "We have the typical cat and dog supplements and some fish and gerbil, but we keep all of this to a minimum and really don't promote the category very much."

While Nixon admits that there are some shoppers who routinely purchase their pet supplements from Dahl's stores, the overall number of consumers who see smaller supermarkets as a destination for finding animal supplies isn't very high.

"Just like a lot of other chains, pet supplements is more of a convenience category for us, so we don't go overboard trying to compete with the big box retailers or pet supply stores," he said.