American home improvement retailer Lowe’s Companies, Inc. (NYSE: LOW) is launching a pilot program to open shops for American pet retailer Petco Health and Wellness Company, Inc. (WOOF) in some of its outlets.
The step is aimed at diversifying its current home improvement offerings to other segments, including dog food, health & wellness supplies, and services for pets.
Following the news, shares of LOW rose more than 2.2% before ending the day slightly down at $225.93. Meanwhile, WOOF popped 2.5% to close at $17.86 on January 27.
Home Furnishings and Pet Health Under One Roof
In 2021, retailers struggled to manage both toplines and bottom lines due to the pandemic-driven lockdowns, coupled with supply chain issues and raw material shortages. As the economy reopens, companies are trying ways to attract more customers and stave off competition.
Lowe’s is known to have a pet-friendly environment, and already hosts a selection of pet products including Stainmaster PetProtect carpets, dog beds, dog doors, and more. Adding Petco stores to its outlets will ensure that Petco loyalists find a new stop for their pet’s care, including veterinary visits and grooming services.
As per Packaged Facts, with adjustments from Petco’s internal estimates, more than 11 million new pets have entered U.S. homes since the start of the pandemic. Meanwhile, a survey by TRUE Global Intelligence, on behalf of Lowe’s showcased that-67% of respondents have found their greatest comfort in their pets, while nearly half have found that comfort in their homes.
Lowe’s seeks to increase its customer base by offering pet products and services under one roof, along with its home improvements and fittings products. The idea behind the concept emerged as the pandemic compelled Americans to spend more time in the comfort of their homes and created deeper bonds with their pets.
The first of its kind Lowe’s + Petco store is expected to open at Lowe’s Alamo Ranch, Texas location in early February. By the end of March 2022, Lowe’s plans to expand the concept to another 14 stores at Lowe’s locations in Texas, North Carolina, and South Carolina.
The products can be purchased at the outlets or can be picked up by placing orders on Lowes.com, through contactless pickup lockers or at the customer service desks.
Excited with the launch, Lowe’s executive VP of merchandising, Bill Boltz, said, “This partnership enhances the total home solution we offer them by bringing home improvement and pet care products, services, and expertise together under one roof.”
Petco’s chief merchandising officer, Nick Konat, said, “Bringing Petco’s pet care expertise, high-quality products, and veterinary and grooming services to Lowe’s helps make it easier than ever to create healthy, happy homes for pet parents and the pets they love.”
Overall, Lowe’s stock has a Strong Buy consensus rating based on 15 Buys and 3 Holds. The average Lowe’s price target of $283.61 implies 25.5% upside potential to current levels. Shares have gained 37.3% over the past year.
TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into LOW’s performance.
In December, Lowe’s website traffic recorded a modest 0.59% year-over-year increase in monthly visits. Similarly, year-to-date website traffic growth increased by 13.27% compared to the same period last year.
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