Sales of pet products through nontraditional outlets—wholesale, dollar, convenience, department, home furnishings/housewares, home improvement/hardware/garden, sporting goods and Internet/catalog stores—totaled $2.9 billion in 2005, up 8.1 percent over 2004, according to “Market Trends: Pet Products and Shoppers in Nontraditional Retail Outlets.” That means pet products sales in nontraditional outlets are growing faster than sales in traditional pet outlets, which posted only a 4 percent average growth rate.

That situation is likely to continue through 2010, with pet food sales in nontraditional outlets growing 6 percent annually and pet supplies and accessories in nontraditional outlets growing 10 percent annually.

Nontraditional pet outlets are jumping on the pet bandwagon to capitalize on positive press being generated by gift/luxury products, functional products and high-tech products for pets.

And smaller manufacturers are eager to sell merchandise to nontraditional outlets because “relentless consolidation” in traditional pet channels is limiting their ability to grow. In fact, Packaged Facts said, startup companies are already finding it practically impossible to gain and maintain a foothold in traditional channels regardless of their ability to be innovative.

”Wholesale clubs, dollar stores and convenience stores continue to add stores at a rapid clip, attracting a wider pool of shoppers on a more frequent basis, often at the expense of traditional retailers (especially supermarkets),” the report said.

Home improvement/hardware/garden stores also boast impressive penetration numbers, with more than three-fifths of U.S. households—including 34.9 million pet supply-purchasing households—shopping this channel.

Based on projected growth rates for the overall market, Packaged Facts predicts a tilt toward wholesale clubs, which garner more than half of pet products sales in nontraditional outlets. However, the highest levels of growth are expected to come in Internet/catalog sales.

The home improvement/hardware/garden store sector will slowly but steadily increase its presence in the pet supplies sector, the report said.. Local hardware stores in areas not well-served by pet specialty stores are especially well-positioned to sell pet supplies, in part by focusing on synergies with their garden departments and in part by tapping into the specific customer-service needs of rural consumers.

For more information, or to purchase the full report, visit www.packagedfacts.com/pub/1087709.html or www.marketresearch.com. [May 2006 PET AGE]