The size that counts and the 7 dwarfs we cannot see

Petros Blitsas

Ιts been 25 years since the first super premium pet food entered the Greek pet market and started to change its scenery.

Throughout the years many things have changed at all market levels (importers, distributors, consumers, trainers, breeders, kennels etc). Yet, despite these changes the whole structure had not managed to seal its grounds and as a result today its a very attractive and unprotected market for many aspiring intruders. There are many “open doors” (weaknesses) and the saying “come one, come all” would perfectly describe the today’s situation.

1. “Door”: Retail Chains
For the time being for most independent pet shops, pet retail chains do not pose a “threat”. The same belief was held by the local grocery stores when the the first supermarket chain was created in Greece, the same belief was held by local electronic devices stores before the first retail chain was created etc. The same mistaken belief always repeats itself as a farce in all markets.
Indeed, if someone today compares the market size (stores number) and the total retail chain stores number, they do not look like “threatening”. Still, we have to keep in mind that:
(a) retail chains (existing or new ones) would lawfully expand and evolve as there are enormous growth margins.
(b) these “small” (today) retail chains can easily evolve like the once emerging grocery chains that according to official data, in 2017 accounted for the 88% of the total food and beverages retailing turnover!
(c) while the retail chains will grow and expand, the market will start to attract foreign pet retail chains. This can happen in many ways, through mergers, acquisitions or simply as new entrants.
Such progresses may seem distant to many but unfortunately reality is quite different. These developments are not expected in the next century but in the next 2-5 years time.
Also, there are many who hold that their personal relationship with their customers offers a “safe shelter”. Still, we would advice them to rethink how themselves act as consumers, the power of a “big name” in their minds and how this “shelter” did not prevent retail chains from developing in other markets and/or countries.

2. “Door”: ONLINE retailers
Many may have not noticed or may even not understand the issue of online retailers but it is something that grows fast and will bring major changes to the whole market structure (distributors – pet-vet – consumers).
The producers’ and/or owners’ of private labels need for selling their products in more reasonable prices to the ultimate consumer, have push them to produce and dirstribute their products exclusively through online retailers. If you serf the internet you will find amazing products in amazing prices and if you “look” to import these brands as distributors, you will get as an answer that these products are made only for online retailers.

3. “Door”: ONLINE pet shops
A well known European grain free dog product is sold in a Greek pet shop for 74€.
The same product in sold in Greece online for 63.50€, while the price for the same product on a European online shop is 45,88€.
While some pet shop still have high sales as the elder consumers that do not use PC return to their shops, while some consumers still resist to the economic pressures and have not yet turn to other more economic alternatives, while some retail chains are still not so consumer friendly, while the number of pet owners is growing, while the web ‘dangers’ stop some consumers from buying online….while…while…the petshops do not see this visible threat. They do not see that the market structure is full of “termites” that are gnawing it slowly.
If you are a petshop owner, devote some time and make youself a research for online stores (both Greek and foreign) that sell products in Greece. Do some price comparisons with your products and you will wonder for many things regarding your business.

4. “Door”: Greece has the highest prices in Europe apart from Cyprus
No, neither the distributors nor the petshops are crooks as many may inititally think. The Greek market, due to the huge number of distributors and petshops is divided in many small pieces which are not enough to maintain this number. This fact combined with a 24% VAT results in rather expensive products for the Greek consumers. To add, this phenomenon regards not only the pet sector but also many other sectors of the Greek economy.
If you search German or French or other online European pet retailers you will realize how expensive these products are sold in Greece. Researches in 2017 have shown that the average consumer is in constant search.
Primarily based on prices and offers and secondly based on distance. Additionally, the average consumer does not forgive at all.
That’s why he changes habits and suppliers/stores every once in a while.

5. “Door”: Product Flow and Support
Everyone had suffered from this “Open Door”. If we exclued the two multinational companies that have constant product flow and support, 99% of the rest companies have left petshops and consumer without products. As a consequence, they turn to other alternatives.

6. “Door”: Reduced cash flow (in distributors, pet shop, consumers)
If you have understand the five previous points and if you do not have “political blinkers”, you can realize that the cash flow of the Greek market is getting worse year by year. There are no investments while the Federal taxes and cuts are growing. The stores number is increasing, the chain retailers are growing, the e-commerse is expanding but the pie is not getting bigger. Instead, its getting more and more fragmented. The market indicators are getting worse and the shares are not enough for anyone. Consequently, the market players are competing hard.
As competition is increasing, the offers are squeezing profit margins. EVERYONE wants to sell, its a matter of survival. Nonetheless, these moves are destroying your brand’s value and loyalty. Still, that’s reality and it will continue as such. Within this uncontrollable competitive landscape, the bet is whether the chain retailers and online stores will manage to vanish the traditional pet market (as it has happened in other markets) or if the traditional petshops will evolve, adapt and transform in a strong competitor.

7. “Door”: Lack of identity
Indeed, the petshop or pet/vet identity has been improved during the last years but it is still far from being imprinted on consumers mind as: a “professional-specialty” products and services point of sale.
There is still anarchy in stores allocation per area/city/region, in out-store and in-store appearance, as well as in their customer approach and problem solving methods. For those who disagree with this point of view, I urge them to do themselves a small research by asking consumers regarding what they think about petshops.
To conclude, the existance of all the above mentioned ‘problems’ do not make the Greek market necessarily problematic or non-attractive, in the contrary they make it rather attractive! The Greek market is a very attractive bride that is available and looks for her groom… herself, as apparently her parents and siblings are occupied with their problems, dreams and illusions.
This October Pets Today Exhibition or Pets Today magazine, could play a rather important role in all these, if they held separate forums for the distributors and the petshops. This would provide a platform where the different opinions would be heard, the problems would be listed and developments would be routed.