Photo courtesy of Petco
A new Petco in the Houston suburb of Aldine was the first to house a Thrive veterinary clinic. As in Aldine, all clinics are to be located near the store entrance for high visibility.
Since Petco opened its first in-store veterinary clinic in October in suburban Houston, the number of clinics in stores of the national chain has grown to eight, with another four scheduled to open by the end of January.
How many more Petcos will feature clinics in the foreseeable future is a competitive secret, but the company indicated that offering full-time veterinary services is one way to meet what it perceives as customer desire for a complete range of care and services for their pets.
Petco’s foray into in-store veterinary clinics draws comparisons to its retail rival PetSmart, which has housed Banfield Pet Hospital clinics since 1994 and counts 866 clinics in its 1,600 locations today. Dr. Whitney Miller, Petco director of veterinary medicine, said that replicating and competing against the PetSmart/Banfield partnership is not what motivated Petco’s move. Instead, Miller described the action as a next logical step to meet consumer demand and a desire by and support from new owners to broaden store offerings.
“We … changed hands of ownership a couple of years ago, and I think we have some strong supports from the top level right now to being nimble as a company and looking at ways we can change and expand to continue to grow, as well as meeting the demands of … customers,” Miller said.
Petco was acquired by CVC Capital Partners, a private equity firm based in Luxembourg, and the Canada Pension Plan Investment Board in November 2015, after merger talks between Petco and PetSmart failed. Petco operates more than 1,500 stores in the United States, Puerto Rico and Mexico.
Petco clinics are going into new or remodeled stores that can accommodate the clinic footprint and are located in attractive markets, Miller said. The first clinic opened three months ago in Aldine, Texas, north of Houston. Of the 12 clinics planned to open first, eight are in Texas, three in California and one in Colorado.
Texas is home territory for Thrive Affordable Pet Care, an Austin-based company enlisted to operate 10 of the first 12 Petco store clinics. Petco chose Thrive as a partner after investigating major corporate players, smaller organizations and independent practitioners, Miller said. Thrive is a 2-year-old company with seven standalone clinics in Texas.
“They have a really good team in place that can grow rapidly, as well as be a good partner with the goals of Petco,” Miller said.
The companies describe the clinics as a joint venture. Thrive CEO Odis Pirtle declined to divulge the particulars of the business relationship.
As for Thrive, Pirtle said the company was established in 2015 by Dr. Jasen Trautwein. “Our goal is to provide care for those pet owners not [already] seeking care, as well as to serve pet owners looking for a different value proposition,” he said. Pirtle is a former sales executive with the pharmaceutical company Zoetis. He also worked for Pfizer, from which Zoetis was spun off.
Elaborating on the “affordability” niche that Thrive seeks to occupy, Pirtle said: “We’ve identified and created proprietary business practices that allow us to serve pet owners at a much more affordable rate without sacrificing the quality of care. In most cases, our pricing structure is up to 30 percent less than other practices for similar procedures [or] medications.”
The company’s rapid expansion with Petco is fueling a concerted search for employees. “We expect to hire over 100 veterinarians and about 300 technicians and professional staff prior to the end of 2018,” Pirtle said.
Thrive is part of a much larger operation, Pathway, a veterinary management company that owns clinics under multiple brand names. Pathway recently was in the news as one of three companies that bought hospitals required by the Federal Trade Commission to be divested during the acquisition by Mars Inc. of VCA Inc. in 2017.
Pathway’s website shows that it owns 125 clinics in 26 states. Pathway picked up more than one-third of those clinics when it purchased Eye Care for Animals in October. The list of Pathway locations does not include Thrive’s standalone or Petco-based clinics.
A second veterinary business working with Petco to open in-store clinics is The Pet Vet. Owned by Dr. Danny Cox, The Pet Vet has since 2009 operated a clinic in Frisco, Texas, in leased space in a Petco. That clinic was not part of Petco's national initiative to add veterinary services in stores. Under Petco's new venture, The Pet Vet will operate store-based clinics in Highland Village and Addison, Texas.
Miller said Petco’s longtime presence in Southern California (its headquarters are in San Diego), combined with the region’s high growth, makes the area a strong market for piloting new services. Likewise, Colorado is a high-growth area, Miller said, with a high rate of pet ownership.
The clinics are located up front, immediately visible to customers as they enter the store. Thrive exam fees are set at $10 to $15, depending on location. The cost of other services may be closer to market prices, Miller said, but the clinics offer customizable packages as a way to bundle fees to attract thrifty pet owners. Through an online appointment system, pet owners may choose services and know the price going in. The Pet Vet clinics will operate differently from Thrive's, according to Cox, with exam fees at $55 and a broader suite of services.
While veterinarians at independent clinics might see in-store clinics as a threat, Miller said, the Petco-based clinics are not designed to directly compete with traditional practices because store-clinic offerings are limited by factors such as square footage and store hours.
“We can’t do everything within our space,” she said, “and we would never pretend or say that we can be everything to everybody. We are going to need those partnerships within the local veterinary community, whether it be for emergency needs, referral needs, even general-practice needs that are better served at a local practice versus in a Thrive or a wellness clinic space.”
Further, Miller suggested, Petco’s desire to house clinics may offer independent veterinarians opportunities: In some markets, over the long term, Petco might choose to partner with independent veterinarians, she said.
Petco’s visiting vaccination clinics, known as Vetco, will continue to operate. “We’re looking to have multiple options for folks so that it increases accessibility across the board,” Miller said.
Another major retailer testing the concept of in-store veterinary clinics is Wal-Mart Stores Inc. In September 2016, a walk-in, limited-service veterinary clinic opened in a Wal-Mart in Port Richey, Florida. Dr. Douglas Spiker, who co-owns the clinic with his wife, Christine Battista, told the VIN News Service at the time that he anticipated expanding into more Wal-Mart stores. Battista said last month that the company currently has no such plans to report.
This article has been changed from the original to reflect that The Pet Vet as well as Thrive Affordable Pet Care will operate Petco in-store clinics.
— Edie Lau contributed to this report.