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Earlier this week, the liquidators were called in to oversee the final days of Pet Central, a South Island-based pet retail chain.

I hate to hear when retail staff lose their jobs; they don’t get paid much as it is and they work longer hours at the times of year when most of us wouldn’t (think pre- and post-Christmas). In the pet care business, staff are also predominantly female and so a loss like this one is also an issue for women.

New Zealand’s economy isn’t that great right now and businesses are failing. The good news is that good staff are hard to find and so I wish the best for the retail workers, the groomers and those who staffed the day care. I hope they find work quickly.

And now I put my business hat on. Here’s why I am not particularly surprised at Pet Central’s demise:

1. It seemed to be growing too fast. Since launching the Pet Central brand, the business decided to compete with other large retail chains – namely Animates and Petstock. From what I could see, though, it had few points of difference. It spent a lot on advertising with bus wraps and billboards. It seemed to want to market strongly on being NZ-owned and then, when it opened its Papanui flagship store in 2020, it included a day care and cafe. The cafe didn’t make it and was closed for quite a while before undergoing a ‘relaunch.’ If a cafe failed the first time around, it was unlikely to suddenly thrive particularly when the Papanui store is located literally across the road from the Northlands Mall food court and hospitality precinct. Hospitality is a mean business.
2. In big retail, I’m not convinced being NZ owned and operated means that much. A good example is Mitre 10 (NZ owned) vs Bunnings (Australian owned). If you want your big retail hardware fix, most people have a preference but seems to be based on prices, products and location rather than country of ownership. Countdown is Australian owned, Pak N Save is Kiwi owned. Do supermarket shoppers really care that much when time and convenience are at stake?
3. Pet Central was easily the highest priced chain of all the big pet retail chains. Kiwi consumers are a price-driven lot. We are widely known as a low wage economy. When times are good, people are willing to pay more. With a cost of living crisis, they become more discerning.
4. Combine this with the fact that there are only two major wholesalers in the pet industry in this country which means all the stores buy from the same place for a large range of products. You can’t mark up a product significantly from your competitors and retain loyalty amongst a large portion of customers; smaller retailers excel at growing customer loyalty and providing service which enables them to survive.
5. Pet Central was sold about a year ago to a new owner. What has already been reported to the media is that under the new owner, staff were seeing signs of mismanagement. When I spoke to the liquidator earlier this week, he said that suppliers were in the shops re-possessing stock for which they had not been paid. Whatever remains (and it didn’t sound like much) will be sold.
6. This is not the first pet business that has gone bust in recent years – and that’s just in Christchurch. In 2021, there was Kuri which closed leaving debts of almost $1 million when it collapsed. This business remains trading at only one location in Christchurch, with different ownership. In 2022, there was The Barkery which opened in April and was closed by October. Promoted as a social enterprise, it was still a business that needed to make money before it could return profits to its nominated charities. Now, in 2023, it is Pet Central.
7. It takes a lot of resource and time to run a successful retail business and that is before you consider the resources you need to expand. Commercial leases are expensive and the more staff you employ, the higher your wage bill and associated costs like Kiwisaver contributions and ACC levies. Cash flow needs to be carefully managed and suppliers must be paid.

But here is the good news, pet owners probably won’t miss Pet Central for long because you can find products elsewhere. As I said, every pet store has to buy from the same distributors in New Zealand for a lot of the product lines. It’s one reason why customers who reported no stock at Pet Central in recent weeks could easily go and find what they needed somewhere else.

For services like grooming and day care, there are other businesses where these services are core business and not an add-on to retail.

And here’s the gem: there are a lot of niche and great products that you can buy from smaller retailers and online. Christchurch and Canterbury are well-served, for example, for raw pet food suppliers. Take the time to research and you will find what you need.

A lot of very good products are not sold to large retailers because they want unrealistically low wholesale prices which they can mark up. A niche product/producer can’t survive at the margins that big retail expects. Smaller businesses are often more agile at sourcing new products for consumers, too.

If you want to support Made in New Zealand, get shopping online and find the many products available to you. You don’t need big retail for this.

There will always be a place in a modern economy for big retailers; you’ve still got choice. In another year, Pet Central will be a distant memory for many, a fond memory for some, and a sour one for those who have not been paid.

Kathleen Crisley, Fear-Free certified professional and specialist in dog massage, rehabilitation and canine fitness,  The Balanced Dog, Christchurch, New Zealand