While Pet Circle's sales went up, profits did the opposite with its losses jumping over $26 million.
👉 Background: Pet Circle was founded back in 2011 by an investment banker and data scientist - aka the dynamic duo of pet food. Pet Circle offered everything you’re too lazy to get from your local pet store and delivers it to your door. Everything from kibble to squeaky toys to flea treatments. In its first decade, it grew rapidly, hitting a $1 billion valuation by 2021.
👉 What happened: Despite remaining a private company, its latest corporate accounts show revenue jumping to $385 million in 2024. But while sales went up, profits did the opposite with its losses jumping over $26 million — or more than 23% jump from last year.
👉 What else: Despite the growing loss, Pet Circle reckons its new pharmacy and insurance arms will drive growth and profit — a path well travelled by other retailers.
What's the key learning?
💡Retailers are increasingly using their loyal customer bases to shift into higher margin verticals. For Pet Circle, we’d be talking things like insurance, pharmacy and online vet consultations. While staples like pet food keep customers coming back regularly, they don’t offer much room for profit.
💡Once a customer trusts your brand, it’s easier to cross-sell offerings with better margins. So, Pet Circle sees margin growth by white-labelling offerings from other providers.
💡We’ve seen other companies do this too, like Coles who has white-labelled:
Sign up for Flux and join 100,000 members of the Flux family
