Pet Valu Holdings Ltd. is enhancing its in-store experience with a redesigned layout that highlights its rapidly growing “culinary” category, a segment that includes frozen and raw pet food. The initiative, detailed in a new equity research report by Martin Landry of Stifel Nicolaus Canada Inc., underscores the retailer’s strategy to increase traffic, improve customer engagement, and strengthen its competitive position in Canada’s $8 billion pet food market.
By year-end 2025, Pet Valu plans to implement the new design in 120 corporate stores nationwide. The updated format places greater emphasis on visibility and convenience, particularly for frozen and freeze-dried pet food products — areas that have demonstrated strong growth and customer loyalty.
Culinary Pet Food: The Fastest-Growing Segment at Pet Valu
According to Stifel’s analysis, Pet Valu has consolidated several previously distinct categories, including frozen raw food, freeze-dried raw food, gently cooked food, frozen treats, and frozen snacks, into a single “culinary” umbrella. This approach creates more cohesive merchandising and helps communicate clearly with consumers who are increasingly looking for high-quality, minimally processed nutrition for their pets.
The report notes that culinary products are a key traffic driver, generating more than twice the number of store visits and leading to annual spending levels more than double that of a traditional customer. This insight reinforces the strategic importance of the Pet Valu new store layout, which places these high-engagement products front and centre.
The category’s growth trajectory has been impressive. Over the past several years, sales in the culinary segment have expanded at a rate exceeding 20 percent annually, making it the fastest-growing component within Pet Valu’s consumables offering. Management estimates that the segment accounts for roughly five percent of the total Canadian pet food market, suggesting significant room for further expansion.
Design Features Enhance Visibility and Shopper Engagement
The redesigned Pet Valu new store layout emphasizes visibility and accessibility, especially for frozen foods. Each updated location now features up to six cooler doors, compared with the previous two to four, positioned prominently near the store entrance. The goal is to draw immediate attention to the culinary category while integrating complementary product groupings.
Freeze-dried raw foods are placed adjacent to the coolers, strategically positioned as an introductory step for pet owners transitioning from traditional kibble. Toys and accessories are displayed nearby to encourage impulse purchases that complement mealtime products. Additionally, a cooler dedicated to frozen treats is now located near the checkout counter, offering a final opportunity for add-on sales.
Enhanced signage and improved lighting have also been incorporated to create a more engaging and educational environment. The result is a layout designed to support exploration while emphasizing Pet Valu’s authority in pet nutrition. According to Stifel, the company’s investment in store design updates totals about $70,000 to $80,000 per location, representing a modest capital outlay within the broader context of its annual capital expenditure program.
Private Label Expansion: Performatrin Culinary Takes Centre Stage
A key element of the new merchandising strategy is the introduction of Performatrin Culinary, Pet Valu’s private label brand launched in spring 2024. The brand encompasses frozen raw and gently cooked meals, now occupying 30 to 40 percent of cooler space in stores that have adopted the new format. These products complement existing offerings from major suppliers, including Ontario-based Big Country Raw, which remains the leading brand in the frozen food category.
Performatrin Culinary reinforces Pet Valu’s positioning as both a retailer and a brand developer. By expanding its private label offerings, the company can enhance margins and control quality while differentiating itself from competitors. The inclusion of high-quality, proprietary frozen meals and gently cooked products further aligns Pet Valu with broader consumer trends toward natural, nutrient-dense pet food options.
Stifel’s report highlights examples from the product lineup: Performatrin Culinary raw meals retail at approximately $19.99 for a four-pound package, while gently cooked dinners are priced at $9.99 for 14 ounces. The Performatrin Ultra freeze-dried collection, meanwhile, sells for around $14.99 for a 3.5-ounce pack, positioning the brand firmly within the premium pet food segment.
Rising Demand for Raw and Minimally Processed Pet Foods
Consumer preference for raw and lightly processed pet food continues to rise, driven by perceptions of health benefits such as improved digestion, a shinier coat, better weight control, stronger teeth, and a more resilient immune system. While these claims are not universally supported by clinical data, they have resonated strongly with pet owners seeking to replicate human “wellness” trends in their pets’ diets.
Unlike some competitors, Pet Valu does not sell fresh raw products due to their limited shelf life — typically only one to two months. Instead, the company focuses on frozen and freeze-dried formats, which preserve nutritional integrity while offering greater convenience and safety. Freeze-dried products in particular have become popular among consumers looking for portability and ease of storage, even at higher price points compared to frozen alternatives.
The company’s culinary expansion capitalizes on this trend while differentiating itself from online competitors, many of which lack cold storage logistics infrastructure. Stifel’s analysts describe the frozen category as “resistant to online competition,” giving Pet Valu a structural advantage in maintaining in-store traffic and building loyalty through specialized offerings.
Training Associates to Support an Elevated Customer Experience
Recognizing that pet owners are arriving with more knowledge and higher expectations, Pet Valu has invested significantly in employee training as part of its culinary initiative. Associates are being trained to provide detailed guidance on the nutritional differences between frozen, freeze-dried, and gently cooked foods, as well as portioning and transition recommendations.
The enhanced training aims to ensure that staff can meet customer inquiries with confidence and accuracy. Stifel notes that this focus on expertise supports the company’s brand positioning as a trusted destination for premium pet care advice. It also builds on Pet Valu’s reputation for customer service—an attribute that has helped the retailer maintain strong loyalty despite increasing competition from online and big-box channels.
Financial Perspective: Strategic Investment with Long-Term Payoff
From an investor standpoint, Stifel maintains a Buy rating on Pet Valu shares with a C$40.00 target price, up from the current trading level of C$34.89 at the time of the report’s publication. Analysts Martin Landry and Jesse Kestenbaum project that revenue will grow from C$1.19 billion in FY2025 to C$1.25 billion in FY2026, while adjusted EBITDA is expected to rise from C$260.6 million to C$276.4 million over the same period.
The investment thesis highlights three primary points: First, same-store sales growth is improving after six quarters of declining traffic, driven in part by interest in the culinary offering. Second, the Canadian pet food sector remains one of the most stable segments in consumer retail, having recorded only a single annual decline in the past 30 years. Third, Pet Valu’s valuation, currently at 18.5 times forward earnings, remains in line with historical averages, suggesting potential upside as same-store sales accelerate.
The Stifel report concludes that Pet Valu’s capital investments—approximately $10 million to retrofit 120 stores—represent a measured and efficient strategy to enhance long-term profitability. The analysts describe the initiative as consistent with the company’s return-on-invested-capital (ROIC) hurdles, even with slightly lower product margins in the frozen category due to higher cold chain logistics costs.
A Category Built for Traffic and Loyalty
The appeal of the Pet Valu new store layout lies in its ability to attract and retain a specific type of customer: one who is willing to invest in premium nutrition for their pets and seeks ongoing expert advice. Stifel’s findings indicate that these customers not only visit stores more frequently but also spend more per visit, effectively boosting the lifetime value of each relationship.
By foregrounding frozen and raw foods, categories that are not easily replicated online, Pet Valu reinforces its relevance as a brick-and-mortar destination. The strategy aligns with broader retail trends, as specialty chains differentiate themselves through experience, education, and exclusive product offerings. The company’s focus on private label innovation and in-store expertise also positions it strongly within an increasingly competitive market that includes established Canadian retailers and digital entrants such as Chewy, which expanded into Canada in 2023.
Pet Valu’s Market Position and Outlook
Founded in 1976 and headquartered in Markham, Ontario, Pet Valu operates a network of more than 800 stores across Canada, including both corporate and franchised locations. The company’s focus on premium pet products and services, such as food, accessories, grooming, and self-serve dog wash stations, has established it as a leader in the Canadian specialty pet retail sector.
With over 1,800 employees nationwide, the company continues to invest in growth initiatives that emphasize innovation and customer engagement. The rollout of the Pet Valu new store layout represents the latest phase in its evolution, marrying operational efficiency with an elevated in-store experience.
While Stifel acknowledges potential risks, including currency fluctuations, franchise performance variability, and competitive pressure from new entrants, the overall outlook remains positive. Analysts describe Pet Valu’s industry segment as defensive, offering investors exposure to a resilient category that has proven durable across economic cycles.
Reinforcing Brand Leadership Through Innovation
Pet Valu’s strategy reflects a deliberate effort to balance innovation with operational discipline. The emphasis on culinary products, combined with enhanced store design and employee education, demonstrates a clear understanding of shifting consumer values in the pet care sector.
As Stifel’s report notes, the company “has found the right formula to elevate its frozen food offering.” The rollout of the new design across corporate stores marks a significant step in that direction, ensuring consistent execution while gathering insights for potential adoption by franchise partners.
For customers, the experience offers a space to learn about nutrition, discover new products, and build lasting relationships with knowledgeable staff. For investors, the changes represent a calculated move to drive traffic and sales in a sustainable way.
