The Business of Compassion (Part 1 of 6): When Pets Became Big Business (#771)
Updated: 16 hours ago
The Remarkable Rise of PetSmart and the Commercialization of the Human-Animal Bond
There was a time when owning a dog or cat was a relatively uncomplicated financial proposition.
Dogs ate dog food, often purchased at the supermarket.
Cats ate cat food.
Veterinary visits were generally reserved for vaccinations, injuries, and illness.
Grooming was frequently performed at home.
Pet insurance was uncommon, specialized diets were relatively limited, and few owners contemplated spending thousands of dollars on sophisticated diagnostic procedures or advanced medical treatments.
That world has changed.
Today, companion animals sleep in our beds, travel with us, attend daycare, receive specialized diets, and undergo medical procedures that would have been unimaginable in veterinary practice only a few decades ago.
We increasingly describe our pets as members of the family.
And where there is emotional attachment, there is commercial opportunity.
The transformation of the human-animal bond has been accompanied by the emergence of an enormous industry encompassing pet food, pharmaceuticals, veterinary medicine, grooming, boarding, insurance, technology, and countless other products and services.
Few companies illustrate this transformation more clearly than PetSmart.
What began as a modest pet-food warehouse in Arizona has become one of North America's largest pet-retailing enterprises, with thousands of commercial relationships, tens of thousands of employees, and an increasingly important presence in the wider animal-care industry.
PetSmart’s history tells us something about the changing relationship between people and animals.
But it also raises questions about what happens when affection for animals becomes the foundation of a multibillion-dollar business.
A Warehouse in Phoenix
PetSmart began in 1986 when Jim and Janice Dougherty established a business called PetFood Warehouse in Phoenix, Arizona.
Their idea was straightforward.
Rather than purchasing pet food and supplies from traditional pet shops or supermarkets, customers could visit a large warehouse-style store offering a broad selection of products at competitive prices.
The concept reflected a broader transformation in American retailing.
Warehouse stores, discount chains, and large specialty retailers were challenging traditional small businesses by offering greater selection, lower prices, and the convenience of purchasing everything in one location.
The Doughertys recognized that pet owners represented a growing consumer market.
Their business expanded rapidly.
By the late 1980s, the company had adopted the name PETsMART, reflecting an ambition to become more than a warehouse selling pet food.
The name itself was clever.
It suggested that shopping at the store was a smart decision for people who cared about their animals.
But the company's development would eventually extend far beyond retailing.
From Products to Services
During the 1990s, PetSmart began transforming its business model.
Pet food and supplies remained central, but the company increasingly recognized that pet owners needed services as well as products.
Grooming salons, obedience training, boarding facilities, and veterinary services became part of the PetSmart experience.
This was an important commercial development.
Pet food is purchased repeatedly, but it is also a highly competitive retail product.
Services create different opportunities.
A customer might purchase food every month, arrange grooming every six weeks, enroll a puppy in obedience classes, and seek veterinary care several times a year.
Each visit strengthens the relationship between the customer and the business.
The company was no longer simply selling products for animals.
It was becoming a destination for people who owned animals.
PetSmart also developed relationships with veterinary hospital operators, including Banfield Pet Hospital, which established veterinary facilities within many PetSmart stores.
The arrangement offered obvious advantages.
Customers could obtain veterinary services while shopping for their pets.
Veterinary hospitals gained access to an established customer base and convenient retail locations.
But it also represented an important change in the relationship between veterinary medicine and commerce.
Traditionally, veterinary practices were independently owned professional businesses.
Increasingly, veterinary services were becoming integrated into larger commercial networks.
The veterinary clinic was no longer necessarily a separate destination.
It could become part of a retail experience.
The Human-Animal Bond Becomes an Economic Force
The expansion of PetSmart coincided with profound changes in how society regarded companion animals.
Dogs and cats were increasingly viewed as family members rather than simply animals living in the household.
This change was reflected in language.
People became pet parents.
Animals became fur babies.
Veterinary care became part of the broader conversation about family health and well-being.
The emotional significance of companion animals was increasingly recognized.
For many people, particularly those living alone, animals provided companionship, emotional support, and a sense of purpose.
These developments were positive in many respects.
Greater emotional attachment encouraged better nutrition, preventive healthcare, improved housing, and increased willingness to seek veterinary treatment.
Animals benefited from the growing recognition that their health and welfare mattered.
But the same emotional attachment created extraordinary commercial opportunities.
A person who considers a dog to be a member of the family may be willing to spend substantially more on that animal than someone who regards it primarily as a working animal or household pet.
Businesses recognized this.
Specialized diets proliferated.
Grooming became more elaborate.
Boarding facilities evolved into pet resorts.
Pet insurance expanded.
Veterinary medicine adopted increasingly sophisticated technologies.
The American Pet Products Association estimates that annual spending on pets in the United States now exceeds $150 billion.
What was once a relatively modest sector of household expenditure has become a major component of the consumer economy.
And PetSmart was exceptionally well positioned to benefit.
The Rise of the Pet Superstore
As PetSmart expanded across the United States and Canada, its stores became familiar features of suburban shopping centers.
The company's success reflected several interconnected developments.
First, pet ownership was widespread and relatively resilient to economic fluctuations.
Second, many pet-related purchases were recurring necessities rather than occasional discretionary expenditures.
Third, the growing emotional importance of companion animals encouraged consumers to purchase additional products and services.
Finally, the company's scale created advantages in purchasing, distribution, marketing, and customer recognition.
PetSmart could negotiate with suppliers, introduce private-label products, and offer services that smaller independent retailers might struggle to provide.
The business grew into an extensive North American network.
Today, PetSmart operates approximately 1,700 stores across the United States, Canada, and Puerto Rico.
Although frequently described as a global company, its direct retail operations remain concentrated in North America.
Its international significance lies partly in its supply chains, financial relationships, and influence on the wider companion-animal industry.
The PetSmart story also illustrates a familiar consequence of corporate expansion.
As large retail chains grow, smaller independent businesses face increasing competition.
The neighborhood pet shop, like the independent bookstore or hardware store, must compete with the purchasing power, advertising budgets, and convenience offered by large corporate retailers.
Some survive by offering specialized expertise and personal service.
Others disappear.
Whether consumers ultimately benefit depends upon more than price alone.
Choice, service quality, employee knowledge, and the long-term health of local businesses also matter.
A New Kind of Customer Relationship
One of the most important aspects of PetSmart's business model was its ability to establish relationships with customers at multiple stages of an animal's life.
Consider the owner of a new puppy.
The first purchases might include food, a collar, a leash, bedding, toys, and training equipment.
The puppy might subsequently attend obedience classes, receive grooming services, and visit a veterinary hospital located within the same retail complex.
As the animal ages, its needs change.
Specialized diets, medications, mobility aids, and other products may become necessary.
The customer relationship can continue throughout the animal's life.
From a commercial perspective, this is an attractive model.
Customer loyalty can be maintained over many years.
From the owner's perspective, convenience may be equally attractive.
But the arrangement also introduces an important question.
When the same commercial environment provides products, services, and access to healthcare, how clearly are the interests of the customer, the animal, and the business distinguished?
There is nothing inherently wrong with offering multiple services in one location.
Indeed, integrated services can improve convenience and access.
The concern arises when commercial incentives influence decisions that should be based primarily upon animal welfare or professional judgment.
This distinction would become increasingly important as the veterinary industry itself underwent corporate consolidation.
The Internet Changes Everything
By the early 2000s, PetSmart faced a challenge that was transforming retail businesses around the world:
The internet.
Online shopping offered consumers convenience, competitive pricing, home delivery, and access to an enormous range of products.
Pet food was particularly well suited to recurring online purchases.
Why drive to a store to purchase a heavy bag of dog food when it could be delivered directly to the front door?
Companies such as Amazon demonstrated the potential of online retailing.
Within the pet industry, Chewy emerged as a particularly formidable competitor.
Founded in 2011, Chewy developed an online business emphasizing customer service, convenience, and recurring deliveries of pet food and supplies.
Its growth challenged the assumption that pet owners would continue visiting physical stores for routine purchases.
PetSmart responded dramatically.
In 2017, it acquired Chewy in a transaction valued at approximately $3.35 billion.
At the time, it was one of the largest acquisitions of an e-commerce business.
The transaction demonstrated how seriously PetSmart regarded the threat posed by online competition.
Rather than attempting to defeat Chewy solely through its own online operations, PetSmart purchased the rapidly growing competitor.
The acquisition also demonstrated the extraordinary financial value attached to relationships with pet owners.
Chewy was not simply selling pet food.
It was developing a direct, recurring relationship with millions of customers.
That relationship had become worth billions of dollars.
Chewy subsequently became publicly traded in 2019, and its ownership relationship with PetSmart evolved through additional transactions.
Nevertheless, the acquisition remains a defining episode in PetSmart's history.
It illustrated the extent to which the companion-animal industry had become a major arena for corporate investment.
From Public Company to Private Ownership
An even more consequential transformation had occurred two years earlier.
In 2015, PetSmart was acquired by a consortium led by the international private equity firm BC Partners in a transaction valued at approximately $8.7 billion.
The acquisition ended PetSmart's status as a publicly traded company.
It also marked a fundamental change in the financial structure of the business.
PetSmart was no longer accountable to public shareholders through the same reporting and disclosure requirements applicable to publicly traded companies.
Instead, it became privately owned by investment organizations seeking financial returns.
Private equity investment is not inherently problematic.
Investment firms can provide capital, management expertise, and opportunities for expansion.
They can help businesses become more efficient and competitive.
But private equity introduces particular financial expectations.
Investors generally seek to increase the value of acquired businesses and ultimately realize a return on their investment.
This may involve expansion, acquisitions, restructuring, debt financing, or changes in operating practices.
In a conventional retail business, these decisions are primarily commercial.
In a business closely associated with animal welfare and veterinary services, their implications may be more complicated.
Decisions concerning staffing, employee training, service delivery, and operating costs can affect animals as well as customers.
The interests of investors, employees, customers, and animals may coincide.
But they are not necessarily identical.
The acquisition of PetSmart by BC Partners therefore marked more than a change in ownership.
It represented the growing recognition among financial investors that the human–animal bond had become an exceptionally valuable commercial asset.
A Business Built on Affection
There is something unusual about the economics of the companion animal industry.
Most commercial enterprises depend upon consumers wanting or needing particular products.
The pet industry depends upon something more personal:
Affection.
People purchase food, toys, grooming services, and veterinary care because they care about their animals.
They want them to be healthy, comfortable, and happy.
They may also experience guilt when they cannot afford something they believe their animal needs.
This emotional dimension creates opportunities for businesses to provide genuinely valuable products and services.
But it also creates vulnerabilities.
Consumers may find it difficult to distinguish between necessary care and optional expenditure.
They may be particularly susceptible to marketing that associates higher spending with better ownership.
And when an animal is ill, financial decisions become emotionally charged.
Veterinary professionals understand these tensions.
They regularly encounter owners struggling to reconcile their affection for an animal with the financial realities of treatment.
The commercialization of the human–animal bond therefore raises questions that extend well beyond retailing.
What responsibilities do businesses have when their customers' purchasing decisions are strongly influenced by emotional attachment?
How should commercial enterprises balance profitability with animal welfare?
And how can veterinary professionals maintain independent judgment within increasingly commercialized systems of animal care?
These questions have become central to the future of the veterinary profession.
The Emergence of PetSmart Charities
There is another important dimension to the PetSmart story.
In 1994, the company established PetSmart Charities, a nonprofit organization dedicated to improving animal welfare.
The charity developed programs supporting animal adoption, shelters, rescue organizations, and eventually access to veterinary care.
Its accomplishments have been substantial.
Millions of animals have found homes through adoption programs associated with PetSmart stores, and hundreds of millions of dollars have been directed toward animal-welfare initiatives.
PetSmart Charities operates as a legally separate nonprofit organization.
Its charitable mission is distinct from the commercial objectives of PetSmart.
Nevertheless, the two organizations share a name, history, public identity, and important operational relationships.
This arrangement illustrates another aspect of the modern companion-animal industry.
Commercial success and charitable activity can coexist.
A business can generate profits while supporting initiatives that improve animal welfare.
Indeed, commercial infrastructure may provide valuable opportunities for charitable programs.
But the relationship also raises questions about the independence of charitable decision-making and the reputational benefits that philanthropy provides to commercial enterprises.
Those questions deserve careful examination.
They will be the subject of a later article in this series.
When Compassion Becomes Commerce
The history of PetSmart is, in many respects, an American business success story.
Its founders recognized a changing consumer market and developed a retail model that responded effectively to that opportunity.
The company expanded, diversified, adapted to technological change, and became a major participant in the companion-animal economy.
Its development has provided convenience, products, services, and employment opportunities.
Through its associated charitable organization, it has also contributed substantially to animal welfare.
These accomplishments should be recognized.
But the PetSmart story is also part of a much larger transformation.
The human–animal bond, once primarily a personal relationship between people and their animals, has become the foundation of an enormous commercial industry.
That industry now attracts multinational corporations, institutional investors, and private equity firms.
The financial value of companion animals is no longer measured simply by the cost of food or veterinary care.
It is reflected in corporate acquisitions, investment portfolios, and multibillion-dollar business valuations.
There is nothing inherently wrong with businesses profiting from products and services that improve the lives of animals.
Indeed, responsible commercial enterprise can contribute greatly to animal welfare.
The difficulty arises when the pursuit of financial returns begins to influence decisions that should be guided by the interests of animals and the people who care for them.
The central challenge is not to separate commerce from compassion.
It is to ensure that commerce does not compromise compassion.
PetSmart's history demonstrates how successfully affection for animals can be transformed into economic value.
Its subsequent history raises a more difficult question.
When the welfare of animals becomes an investment opportunity, who ensures that the interests of those animals remain paramount?
That question leads directly to the next article.
Coming Next
The Business of Compassion Part 2 of 6:
PetSmart and Private Equity. Who Really Benefits?
The acquisition of PetSmart by BC Partners, the subsequent involvement of Apollo, and the growing influence of financial investors in the companion-animal industry raise important questions about ownership, profitability, transparency, and accountability.
What happens when the human-animal bond becomes an asset in a private equity portfolio?
And whose interests ultimately determine how the business operates?
Disclaimer
This is an independent editorial series.
This series is not affiliated with, sponsored by, or endorsed by PetSmart or PetSmart Charities.
Sources
PetSmart. About PetSmart: Company History and Overview. PetSmart Corporate. https://petsmartcorporate.com/about-petsmart
American Pet Products Association (APPA). State of the Industry Report. Recent annual editions. https://americanpetproducts.org/2026-state-of-the-industry
BC Partners. BC Partners-Led Consortium Completes Acquisition of PetSmart. 2015. https://investor.chewy.com/news-and-events/news/news-details/2017/PetSmart-Completes-Acquisition-of-Chewy/default.aspx
U.S. Securities and Exchange Commission. PetSmart Acquisition Announcement and Transaction Documentation. March 2015. https://www.sec.gov/Archives/edgar/data/863157/000119312515087596/d887827dex991.htm
PetSmart. Acquisition of Chewy. Corporate announcements, 2017. https://investor.chewy.com/news-and-events/news/news-details/2017/PetSmart-Completes-Acquisition-of-Chewy/default.aspx
Chewy, Inc. Annual Reports and Securities Filings. 2019 onward. https://investor.chewy.com/financials/annual-reports/default.aspx
PetSmart. 2025 Corporate Social Responsibility Report. https://petsmartcorporate.com/our-social-responsibility
PetSmart Charities. About Us: History, Mission, and Impact. https://petsmartcharities.org/about-us
Apollo Global Management. Apollo Funds to Make Strategic Equity Investment in PetSmart. July 2023. https://ir.apollo.com/news-events/press-releases/detail/458/apollo-funds-to-make-strategic-equity-investment-in-petsmart
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