18 hours ago
8
Opinion
Updated July 20, 2026 — 3:49pm,first published 3:00pm
Twenty years ago, Coles then-boss John Fletcher had an epiphany: people were starting to treat their pets like people. Pet owners spent $15 more per shop than those without an animal in the house, Coles declared in 2006. It planned to cash in.
The strategy wasn’t enough to save Fletcher. By 2007, he was out as Woolworths dominated the supermarket wars, though pets stayed a trend. Two decades on, everything old is new again. By the start of this month, Coles was on the cusp of buying the Greencross vet and Petbarn big box chains for about $4 billion.
Then, last week, Coles boss Leah Weckert decided to pull the pin. There are plenty of reasons that Coles’ investors were lukewarm to the prospect of Coles making a major investment into Greencross – not the least of which was the price.
The widely speculated price of $3.9 million is a big lick of capital – an amount that could represent “peak pooch”.
Coles called its decision disciplined. That was certainly easier after news leaked and investors voted with their feet, putting pressure on the company to conserve its capital.
Four years ago, Woolworths spent $586 million for a foothold in Petstock, a provider of pet food, toys, vet clinics, grooming salons and even animal adoption hubs.
The Woolworths deal valued Petstock at (what at the time seemed to be) a staggering $1 billion. To provide some context, the Petstock deal was done in the same week that private equity operator Anchorage Capital bought 100 per cent of high-end department store group David Jones for a mere $130 million. In the intervening years David Jones has financially struggled and Petstock has grown, so the valuation disparity now makes sense.
Woolworths’ then-chief executive Brad Banducci was all smiles when posing for celebratory photos with his beloved cavalier cocker spaniel cross, Juno.
Meanwhile, Greencross inks $2 billion in annual revenue and it’s reported to be making $400 million profit before interest, tax and depreciation.
It is difficult to deny that the growth in the provision of pet goods and services is a trend that retains some steam.
Its current owner TPG Capital paid $675 million for the business seven years ago, so had the Coles deal been consummated, it would have been a massive payday for this private equity vendor, which is now contemplating a public float of the business.
That would’ve been a particular balm to the private equity outfit’s local boss, Joel Thickins, soon after being convicted of negligent driving and refusing a breath test. Thickins’ Greencross payout wasn’t to be.
It is difficult to deny that the growth in the provision of pet goods and services is a trend that retains some steam – and Coles already stocks plenty of pet food and accessories – but there is a strong argument to be made for the supermarket industry spending its capital and management resources focusing on the current and not insignificant challenges it faces.
The sector will remain capital thirsty as the major players continue to integrate technology into supply chain and logistics to better manage digital distribution channels that are increasingly adopted by customers.
They are up against the masters of online logistics and fulfillment, Amazon, whose infiltration into grocery retailing continues to grow.
The big supermarket operators are currently also in a highly contested fight for market share – and one that has come with an expensive investment into lowering prices.
And despite Woolworths’ successful foray into the pet business, the two large supermarket groups have a chequered history of success when they have strayed outside their core competence.
Woolworths exited the last of its bottle shop and pubs investments in 2024, its ownership of Big W has been largely patchy, and its foray 10 years ago into establishing a hardware big box chain, Masters, was a legendary and very costly disaster.
And then there is the legion of yield obsessed investors who would rather see profits pumped into dividends ahead of dogs.
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