Chewy and Petco Bet on Health Clinics, Smarter Autoship, and AI to Grow Without Discounts

At the Goldman Sachs Consumer and Retail Conference, America's two biggest pet specialty retailers laid out matching playbooks: lean into health services, make Autoship and loyalty programs work harder, and put AI to work on service costs instead of cutting prices.

By Good Company Editorial Desk

The News

Chewy and Petco, the two largest pet retailers in the United States, used the Goldman Sachs Global Consumer and Retail Conference to show how they plan to keep growing in a tougher consumer environment, and their roadmaps look remarkably similar. Both companies said they will chase top-line growth and margin gains through technology, recurring purchases, and integrated services rather than promotions, according to GlobalPETS reporting on the conference.

Chewy CEO Sumit Singh said the company is preparing to launch a new and improved Chewy+ membership program, though he offered no details on the changes. He also confirmed that after acquiring the veterinary platform Modern Animal in April, Chewy is not actively shopping for other deals, but added: "But if we do, it will be in the health space."

Petco CEO Joel Anderson outlined a parallel push on the loyalty and private-label fronts. The company is simplifying its Petco Perks program while tightening the integration between retail and services, and it plans to shrink its owned-brand portfolio to 7 labels over the next 12 to 18 months, folding smaller brands under the Petco name. "When you have that many different brands, you have to put marketing dollars into it. So this will make our marketing spend more efficient," Anderson said.

On pricing, both CEOs took discounts off the table. Singh said Chewy is not entering a broad investment cycle, explaining: "When you hear the word investment, I do not want you to hear promotions. I mean durable, non-dilutive growth type of investments." He named health clinics and AI-driven savings as the two main levers. Anderson struck the same note for Petco: "As a specialty retailer, price is important. But it is not how we are going to win. So we have got to stay close on price, but it is not a winning strategy for us to go up against Amazon and Walmart and try and lead our way through price." Petco expects prices to stay stable through the rest of 2026.

Why It Matters

This is the first time both retailers have publicly framed their next growth phase in nearly identical terms, and the message is that the era of buying growth with discounts is over. Instead, the battleground is recurring revenue and services. Health and veterinary offerings sit at the center of both strategies, with Chewy continuing to fold its vet-clinic footprint into its platform and Petco trying to turn its existing stores into a services funnel.

The services funnel is where Petco's loyalty revamp comes in. Anderson said the company can now see how customers move across its whole ecosystem, and he described using that view to cross-sell: "Now we can really see across all the ecosystem, what services they are using, what products they are buying. With Petco Perks now, we can reactivate old customers. We can encourage grooming customers to buy food from us or food customers to use our vet services." The company is specifically targeting store visitors who have never tried its vet services: "We know every customer that walks in a store that has not used our vet services. Let's share that knowledge through our Petco Perks and entice them to use vet services."

Chewy is applying the same cross-sell logic to Autoship, historically a food-and-medication vehicle, and trying to expand it into new merchandise categories using signals from pet profiles. Singh said: "Our effort now is ingesting those [consumer signals] and getting the customer to attach other lines of merch categories into the Autoship product, expanding Autoship beyond food and meds."

For the brands selling through these retailers, the implications are concrete. Petco consolidating to 7 owned brands means fewer slots and more competition for shelf and digital space, while Chewy's push to attach more categories to Autoship makes subscription-readiness a bigger part of the assortment conversation.

The Numbers

The economics behind the strategies show why both companies are leaning on subscriptions and services. At Chewy, the average order value for Autoship orders runs mid-single-digit percentages higher than for non-Autoship orders, the company said, and Chewy is using customer data to predict when orders are due and intervene with reminders when buying patterns slip. Petco said its in-stock rate on Autoship is approaching 100 percent, and its omnichannel customers generate 5 times the net sales per active customer of shoppers who use fewer parts of its ecosystem.

The health bet has already moved the needle at Chewy. The company's push into vet clinics, pharmacies, and insurance, branded as Chewy Health, accounted for roughly $4 billion, or 44 percent, of the roughly $9 billion in incremental revenue Chewy added over the past six years, according to analysis of Singh's conference remarks reported by News Network Space. Singh has also characterized pet health as a roughly $50 billion total addressable market, including an estimated $12 billion to $15 billion in products such as medications, prescription diets, supplements, and flea-and-tick treatments, according to American Banking News.

AI is shifting from experiment to operating leverage. Chewy expects AI to reduce its costs by about $50 million in fiscal 2027, up from the low tens of millions this fiscal year, Singh said on the company's second-quarter earnings call, per RetailWit and PYMNTS reporting. The company said its customer-facing assistant, Cai, had been live less than a month and already resolved about 30 percent of customer chats without a human agent, while a voice agent named Callie handles appointment confirmations and follow-ups at select Chewy Vet Care clinics.

What To Watch

First, watch what Chewy+ actually becomes when it launches. The revamp of Chewy's membership program, paired with the Autoship expansion into new categories, will show how aggressively the company intends to turn one-time buyers into recurring, multi-category subscribers.

Second, watch Petco's owned-brand consolidation. Cutting down to 7 brands in 12 to 18 months is a margin play, but it will test whether loyalists of absorbed brands follow them under the Petco name or wander to competitors.

Third, watch AI execution. Singh described customer-facing AI agents that "essentially unify customer signals and manage each customer relationship on a one-on-one basis without us spending broad marketing dollars on customers," while Petco's Anderson cautioned that customer adoption of agentic AI is "still very small as it relates to our space." Whoever converts AI from a cost tool into a conversion tool first gets a durable edge.

Finally, watch the health land grab. Both companies are investing in fresh and frozen food (Petco added fridges to stores in the first half of 2026 and is rolling out fresh food rolls for dogs from Hill's Pet Nutrition Science Diet) and in keeping more prescriptions inside their own ecosystems. With Chewy's health business already exceeding its own forecasts, expect the next round of competition to play out in clinics and pharmacies as much as in aisles.

Sources

GlobalPETS, "Chewy and Petco target growth through AI, loyalty and recurring sales" (Oct. 4, 2026): https://globalpetindustry.com/news/chewy-and-petco-target-growth-through-ai-loyalty-and-recurring-sales/

News Network Space, "Proven Growth Story or Turnaround Bet?" (Sept. 2026): https://newsnetwork.space/proven-growth-story-or-turnaround-bet/

American Banking News, "Chewy Eyes Pet Health, AI and Clinics to Drive Its Next Growth Phase" (Sept. 18, 2026): https://www.americanbankingnews.com/2026/09/18/chewy-eyes-pet-health-ai-and-clinics-to-drive-its-next-growth-phase.html

RetailWit, "Chewy Puts a $50 Million Price Tag on AI Productivity" (Sept. 2026): https://retailwit.com/chewy-puts-50-million-price-tag-on-ai-productivity/

PYMNTS, "Chewy Puts a $50 Million Price Tag on AI Productivity" (Sept. 18, 2026): https://www.pymnts.com/news/artificial-intelligence/2026/chewy-puts-50-million-dollar-price-tag-ai-productivity/