👉 Background: Woolworths Holdings is the retail behemoth behind Woolworths supermarkets as well as Big W. Previously, it owned Dan Murphy’s, BWS, Cellarmasters and many other liquor brands. In 2019, those liquor brands were spun into a smaller biz within Woolworths called Endeavour Group.

👉 What happened: In 2021, the Endeavour Group was listed on the ASX as a separately listed company. But it wasn’t a total break up because Woolies still owned just under 15% of Endeavour Group.

👉 What else: Now, Woolies has sold 5.5% of their stake in Endeavour Group for $636m, which gives them cash for a brand, spankin' new purchase. And it has just been revealed that they will spend $586m to purchase a 55% stake in PetStock. It's not their first rodeo in this space either.

What's the key learning?

💡From little investments, big investments grow. Woolies first launched a joint venture for pet insurance called PetSure in 2020. Then it invested in an online pet goods business called PetCulture in 2021.

💡These smaller investments allowed Woolworths to learn about the pet space, gather data and feedback from the industry and build relationships with the key players.

💡Woolies would have seen that Australia is in a pet boom.

• The pet care industry is expected to grow faster than alcohol retailers in the coming year
• Australians are expected to spend nearly $31 billion of just dogs and cats a year

So a major investment in pet goods retailer PETStock could be just what the vet ordered to ride this pet boom.