On the Shelf6 min readJuly 20, 2026

Private Label in Pet Retail, 2016-2026: The Margin Play That Won

Chewy, Petco, PetSmart and Pet Supplies Plus all built house brands into their biggest margin lever over the past decade. Here's what the numbers actually show, and what's left for a store that can't build one.

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A decade ago, a pet chain's own-label bag of dog food sat in the discount corner, priced to move and styled to disappear. Today it is the reason the finance team can tell you the store's real margin story.

2016 to 2019: building the shelf quietly

Petco introduced WholeHearted, its flagship owned dog and cat food line, in 2016, pitched as premium nutrition priced a step below the national brands next to it. Chewy was running the same play on the DTC side with a stack of house names - American Journey, Tiny Tiger, Bones & Chews - that most shoppers assumed were third-party brands. By its third quarter of fiscal 2019, Chewy's private-brand assortment had grown more than 80% year over year and private-brand sales were up more than 60% in the quarter alone, on total quarterly sales of $1.23 billion, then-CEO Sumit Singh told investors. The private label lane was already outgrowing the rest of the business before most shoppers noticed it existed.

The margin logic chains are actually chasing

The pitch to the boardroom is simple math. At scale, Chewy's private brands are expected to run about 500 basis points higher gross margin than the rest of the business, and consumables - food, treats, litter - are $50 billion to $60 billion of the roughly $90 billion pet food and supplies market Chewy is chasing. Petco ran the same play earlier and at larger scale: in fiscal 2020, its owned brands, led by WholeHearted, Reddy and Well & Good, generated $1.2 billion in sales, about 27% of total product sales, after growing at a 13% compound annual rate from fiscal 2018. That is a quarter of a public company's product revenue running through house brands it designs, sources and prices itself.

Where the mix sits now

Chewy's private label penetration currently sits in the low-to-mid-single-digit percent of net sales, well behind Petco's historical run rate, but the company's stated long-term target is low-to-mid teens. Chewy's fourth-quarter fiscal 2025 gross margin hit 29.4%, up 90 basis points year over year, and it is guiding to a 6.6% to 6.8% adjusted EBITDA margin for 2026, roughly 100 basis points of expansion, with private label mix cited as a driver. In May 2026, Chewy folded four separate house brands - American Journey, Tiny Tiger, True Acre Foods and Bones & Chews - plus its Frisco litter and waste line, into a single umbrella called Chewy Made, a consolidation the company says is meant to deepen its participation in consumables and make its own products easier to recognize.

Petco's owned assortment - WholeHearted, Reddy, So Phresh and Well & Good - was still a "meaningful contributor to enterprise sales" in fiscal 2025, per its most recent annual report, though the company has stopped disclosing a specific percentage. Pet Supplies Plus now runs at least six house labels across consumables - Redford Naturals, OptimPlus, Mitten's Morsels, Mitten's Pickins, Hartwick Fields and Wixom Ranch Natural Chews - plus hard-goods lines Play On and Fins First, and its CEO has called private brands "essential to the success" of the chain. PetSmart's own site lists ten store brands: Authority, Simply Nourish, Top Paw, Top Fin, Great Choice, All Living Things, Arcadia Trail, Joyhound, Right Choice and Whisker City. And it is not confined to pet specialty: Costco sells its Kirkland Signature "Nature's Domain" dog and cat food exclusively to members, a reminder that the mass and club channel runs the identical playbook.

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The category split the headline number hides

Nationally, private-label pet care sales reached $5.5 billion in the 52 weeks ending July 13, 2025, up 2.4% year over year, according to Circana data compiled for the Private Label Manufacturers Association. But that headline number flattens a real split. Private label owns the hard-goods aisle outright: dog furniture (91.8% share), crates and kennels (89.9%), cat litter boxes (85.6%), and collars, leashes and harnesses (83.8%). It owns almost none of the categories that actually drive repeat visits: dry dog food sits at 15.4% share, wet cat food at 10.1%, small-animal food at 9.5%.

Private label owns nine of every ten dog beds sold and roughly one in seven bags of dry dog food - and the food aisle is where the real fight is.

What gets pushed off the shelf

This is where the retailer's incentive and the vendor's shelf space stop lining up. Consolidating four brands into one, as Chewy just did with Chewy Made, is not cosmetic, it is assortment planning: fewer names to allocate search results and end caps to, more consistent margin per facing. The math pulls shelf and search real estate toward the owned label first and leaves the long tail of mid-tier national brands to fight over what's left. Private label is not immune to the same cost pressure it is supposed to buffer against, either: on Petco's third-quarter 2025 earnings call, executives specifically flagged tariffs hitting "the private label supplies area," even as total company gross margin still expanded 75 basis points.

What this means for the shelf

For the store owner: You cannot out-scale Chewy's or Petco's private label economics, and launching a house brand to compete with them on their terms is a losing bet on volume alone. Your margin lever is different: it's the brands they won't stock.

For the buyer/category manager: The chains have ceded almost none of the fast-moving food aisle to private label (dry dog food is still 15.4% national share), which is exactly where an independent's curated, harder-to-source brands still win a customer who already defected to Chewy for litter and leashes.

For the brand/DTC operator: If your product sits in a category where private label already owns 80%-plus share - containment, furniture, grooming basics - assume the chain relationship is a shrinking shelf, not a growing one, and plan distribution accordingly.

How we're thinking about it

The decade's real story isn't that private label got bigger. It's that it got smarter about where to be big. Chains stopped trying to own everything and started owning the categories where a bag or a bed is functionally interchangeable, then let independents and national brands fight it out in the aisle where formulation, sourcing and a knowledgeable staffer actually change a buying decision.

That's the opening for an independent, not a threat to route around. A store trying to match Chewy on assortment breadth or Petco on owned-brand margin is fighting on the chains' terrain with a fraction of their volume. A store leaning into what private label still barely touches - therapeutic diets, small-batch and regional brands, the lines chains won't risk a slot on - is fighting on terrain private label has already conceded.

We expect that gap to widen, not close, as Chewy Made and its counterparts consolidate further. The more efficiently a chain runs its owned-brand supply chain, the less patience it has for the long tail of brands that used to fill out its food aisle, and the more of that tail ends up exclusively on independent shelves.

The Bottom Line

Private label now runs a quarter or more of the big chains' product revenue, but it still owns less than a fifth of the pet food aisle - which is exactly the gap an independent that curates well can still make a living in.

Sources

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