In case you haven’t been following the latest trends in the pet retail sector, the fundamentals behind pet store real estate have rarely looked stronger. The pet industry is projected to reach $277 billion in US, with an expected 8% compound annual growth rate through 2030. This expansion is being fueled by Millennials and Gen Z entering their prime pet-owning years — and more importantly, these demographics are consistently outspending prior generations.

For owners of net-leased assets occupied by PetSmart, Petco, and Pet Supplies Plus, this demographic shift translates into a larger, more durable revenue base supporting store-level performance.

Equally important is the industry’s demonstrated resilience. During the 2008 financial crisis, pet industry sales grew 5.1%, and during the 2020 COVID recession, the sector expanded 16.2%, significantly outperforming the broader U.S. economy’s 4.3% growth. Few retail categories can point to that type of counter-cyclical performance.

While broader retail continues to recalibrate toward hybrid and digital-first models, leading pet retailers remain active operators with strong omnichannel capabilities and recurring customer demand. Pet ownership in the U.S. is near historic highs, with nearly 70% of households owning a pet today — and given the 8–15 year life cycle of pet ownership, this creates long-term stability in consumer spending patterns.

From a real estate perspective, the combination of demographic tailwinds, recession resistance, and durable consumer behavior reinforces the attractiveness of NNN pet retail assets in today’s environment.

As the clear market leader in North American specialty pet retail, PetSmart has continued to demonstrate operating resilience and balance sheet improvement over the past several years. Following the post-pandemic normalization period, the company has focused on margin stabilization, cost discipline, and debt reduction initiatives designed to reinforce long-term credit strength.

With annual revenues estimated at over $12 billion and a nationwide footprint of approximately 1,600 stores, PetSmart benefits from significant scale advantages in procurement, private-label development, and omnichannel fulfillment. Recent performance reflects continued strength in services — including grooming, veterinary partnerships, and training — which generate higher-margin recurring revenue and support traffic durability across economic cycles.

From a tariff perspective, PetSmart’s core consumables category is also relatively insulated versus many broader retail concepts. Only ~3–4% of U.S. pet food consumption relies on imports, with the majority of consumption supplied domestically and much of the remaining import exposure tied to countries such as Canada and Mexico that benefit from preferential trade frameworks. For net lease investors, that dynamic helps limit cost volatility risk in the most frequently purchased portion of the basket, reinforcing the stability of PetSmart’s underlying demand profile.

The second-largest player in the sector, Petco, is showing tangible signs of a disciplined turnaround under CEO Joel Anderson. After a challenging period marked by margin compression and elevated leverage, the company re-financed $1.5B debt on the books with a new $750M long-term debt issuance in Q4 2025, and has now posted multiple consecutive quarters of improved profitability and operating income. Recent earnings reports reflect positive net income and meaningful progress in cost control processes, inventory discipline, and debt reduction. Anderson’s strategy has focused on right-sizing the retail footprint, strengthening core merchandising, and driving margin expansion through operational efficiencies. For real estate investors, this signals improving credit stability at the tenant level and a leadership team willing to make bold, proactive decisions to enhance long-term enterprise value.

Pet Supplies Plus – Franchise Growth & Expansion Momentum

Pet Supplies Plus continues to distinguish itself through strong franchise-driven growth. The brand reported double-digit sales momentum and is actively expanding its footprint, with 25+ new store openings in 2025 and a robust development pipeline for 2026. With approximately $2 billion in annual revenue and consistent recognition in national franchise rankings, Pet Supplies Plus has reinforced its position as one of the most stable and scalable pet retail concepts in North America. Its neighborhood-store model, combined with steady franchisee demand, provides investors with another compelling tenant profile within the pet retail NNN space.