Dive Brief:

• Petco on Tuesday announced the hire of Tariq Hassan as chief marketing officer, reporting to CEO Ron Coughlin. Most recently, Hassan was senior vice president of global brand strategy and head of marketing for wealth management at Bank of America Merrill Lynch, according to a company press release.

• Hassan has more than 20 years of global marketing experience in brand strategy, digital and performance marketing, communications, innovation and insights, the company said. He's had marketing roles with several brands, including: Pepsi, Gatorade, Frito Lay, Coors, Mars, Emirates, Cadillac, Mercedes-Benz, Johnson & Johnson and Visa. 

• Previously, consultant Jodi Watson served as acting CMO at Petco. The retailer recently expanded to Canada through a partnership with Canadian Tire and over the summer expanded its online pet health and wellness concept, PetCoach, to brick-and-mortar stores. 

   

Dive Insight:

Petco and rival PetSmart are locked in battle as Amazon moves assertively into the increasingly lucrative retail space and online upstarts begin to make their mark.

Petco and PetSmart both enjoy advantages thanks to their brick-and-mortar store fleets — despite the fact that physical store sales have declined at both over the past two years — because they're able to offer services like grooming, training and healthcare, according to a recent report from Moody's Investors Service. In particular, analysts pointed to more robust in-store service offerings at PetSmart than Petco, an estimated 12% of revenue versus 8% respectively. PetSmart is the largest pet service provider, Moody's noted​, which gives them the advantage of additional store traffic and a relatively safe position given the high barrier to entry for competitors.

Growing pet ownership is leading Americans to spend more on food, toys and other pet products, making pet supplies retail a bright spot in an otherwise tumultuous retail landscape. But the fiercely competitive market leaves little room for error, and the debt levels of both major retailers complicate that further, Moody's warned.

Both are highly leveraged by their private equity owners, according to Moody's. "Petco's financial policies have been subdued compared to PetSmart," Moody's analyst Manoj Chadha​ said last month. "Although Petco distributed $100 million to shareholders in fiscal 2017 it has also gradually lowered its debt load."