Pet companies face rising overhead as logistics costs climb
Bottom line
Pet companies across the sector are reporting higher selling, general, and administrative expenses as they absorb rising logistics, technology, and expansion costs, according to a new GlobalPETS analysis of 2025 and 2026 results. The outlet found that five of eight major pet companies it reviewed posted year-over-year increases in SG&A as a share of revenue, even though the group average held flat at 24.3%. Company filings and earnings materials point to a common mix of pressures: store growth, cloud and SaaS spending, automation and IT projects, supply chain changes, and freight or distribution costs. Pet Valu, for example, cited higher compensation, store-network growth, and cloud-services spending, while Central Garden & Pet booked SG&A charges tied to facility consolidation and the wind-down of U.K. pet operations. (globalpetindustry.com)
Why it matters: For veterinary professionals, the story is less about accounting jargon than what it signals about the broader pet-care economy. As retailers and manufacturers face higher overhead, they may push harder on pricing, private-label strategy, automation, omnichannel fulfillment, and service-line growth to protect margins. That matters to clinics because pet parents are already becoming more selective in how they spend, even as they continue to prioritize essential healthcare. Morgan Stanley said in June 2026 that veterinary care remains one of the most resilient categories, with services accounting for more than 40% of pet-industry spending in 2025 and likely rising further. (morganstanley.com)
What to watch: Watch upcoming quarterly filings for whether freight, technology, and expansion costs start to ease, or whether companies keep shifting investment toward higher-margin services, digital channels, and operational efficiency. (s23.q4cdn.com)
Pet companies are entering a more expensive operating environment, and the pressure is increasingly visible below the revenue line. A new GlobalPETS analysis says five of eight major pet-sector companies reported higher SG&A expenses as a percentage of revenue in 2025 or 2026, driven by a familiar set of costs: logistics, technology, automation, and geographic or store expansion. While the average SG&A ratio across the group stayed flat at 24.3%, the underlying trend suggests many operators are spending more just to support growth and maintain competitiveness. (globalpetindustry.com)
The timing fits a broader transition in the pet industry. After several years of unusually strong pandemic-era demand, growth is slowing and consumers are becoming more cost-conscious. Morgan Stanley Research said in June 2026 that pet spending is still resilient, but increasingly selective, with affordability pressures reshaping where households spend and what they delay. In that environment, companies are still investing, but they’re doing it while facing tighter margin conditions and a more cautious consumer backdrop. (morganstanley.com)
The company-level details help explain the trend. Pet Valu said its higher expense base reflected compensation, depreciation and store expenses from corporate-store growth, and higher cloud-services spending. It also separately identified transformation costs tied to new IT systems, SaaS arrangements, e-commerce and omnichannel capabilities, and supply-chain initiatives including duplicative warehousing and distribution costs during a distribution-center transition. (investors.petvalu.com)
Other public companies show a more mixed picture, but with similar cost themes. Petco’s fiscal 2025 annual report said SG&A as a percentage of net sales improved to 36.6% from 37.9% a year earlier, yet the company still highlighted freight, warehousing, occupancy, labor, marketing, and debt-service pressures in its operating cash needs. Chewy’s fiscal 2025 SG&A ratio improved modestly to 21.2% from 21.5%, but the company also pointed to ongoing investments in technology and major capital spending tied to fulfillment, veterinary clinics, pharmacy capabilities, and fresh and frozen infrastructure. Central Garden & Pet, meanwhile, recorded SG&A charges related to facility consolidation and the strategic wind-down of its U.K. pet operations, while continuing to frame 2026 around cost efficiencies and targeted growth investments. (ebs.publicnow.com)
Industry commentary suggests these costs aren’t simply temporary noise. GlobalPETS said grocery and pet executives have been flagging labor inflation, operational expenses, store expansion, and growing investments in IT, AI, and automation as major pressure points. Morgan Stanley’s view adds another layer: as pet parents pull back on discretionary purchases, companies with stronger digital positioning, subscription models, and exposure to essential services may be better placed to defend growth. That’s an important distinction, because higher SG&A can be a warning sign, but it can also reflect deliberate investment in capabilities companies believe they’ll need in a slower-growth market. (globalpetindustry.com)
Why it matters: For veterinary professionals, rising SG&A across pet retail and manufacturing is a useful signal about the commercial environment around the clinic. If suppliers, retailers, and pharmacy-adjacent businesses continue to face higher fulfillment, technology, and expansion costs, some of that pressure may show up in product pricing, promotional intensity, service bundling, or sharper competition for recurring pet-parent spending. At the same time, healthcare appears to be holding its place as a priority category: Morgan Stanley said veterinary services are gaining share, and that services made up more than 40% of pet-industry spending in 2025. For clinics, that combination could mean a more value-sensitive client, but not necessarily a less engaged one, especially when care is framed as essential. (morganstanley.com)
The other practical takeaway is that more pet companies are spending to build systems, channels, and infrastructure that overlap with veterinary care delivery, including online pharmacy, omnichannel fulfillment, subscription models, and clinic footprints. Chewy’s investment in veterinary clinics and pharmacy capabilities is one example, and Pet Valu’s omnichannel and supply-chain spending is another. Those moves don’t change the central role of the veterinary team, but they do shape the ecosystem around convenience, prescription access, and how pet parents compare service options. (publicnow.com)
What to watch: The next round of quarterly earnings should show whether SG&A pressure starts to moderate as transformation projects mature, or whether companies keep absorbing elevated logistics and technology costs while betting on services, digital channels, and selective expansion to drive the next phase of growth. (ir.central.com)