Deal DetailsPromoted 09-15-2012 at 12:04 PM View Original Post
Note, you must be Pals Rewards Member (free to join)
This discount is only good on SATURDAY 9/15 and you need a PALS card [petco.com]! Remember to ACT SURPRISED when you get 50% off - it's supposed to be a mystery!
Mystery savings amount of 10%, 15%, 25%, or 50% will be applied at checkout. Present coupon and Pals Rewards card to receive this offer. Not valid on the purchase of gift cards, prior purchases, online or with any other coupon offer. Void if copied, transferred and where prohibited by law. Single-use coupon, limit one per household. Valid at either Petco or Unleashed by Petco. Valid on in-stock products only (not services, such as Grooming). Selection varies by store. Valid only on 9/15/12.
See my statement below in regards to the usage of this coupon.
Keeping in mind that overall profit margin factors in labor and real estate costs, as well as utilities and of course merchandise costs, then it is very safe to assume that the merchandise markup must be way more than 30% to offset these other expenses in order to have an overall 30% profit margin. Aside from the variable cost of merchandise, the labor and real estate costs and utilities are fairly fixed costs: i.e. Paid regardless of sales volume amount (paid if the store has $0 sales or $10,000 sales).
Therefore, I think it is quite reasonable to assume the markup on retail items is probably at least 100% vs wholesale costs. So this coupon for 50% off probably means for one day Petco averaged selling at around wholesale price. Good for revenue, bad for profit margin, probably didn't lose much money, if any.
To clarify the math- for every $100 petco currently sells we can assume $30 is profit, based on petsmarts profit margin.
Now let's assume that out of that $70, only $40 is the wholesale cost of merchandise. This means $30 is allocated to the fixed costs of labor, etc I laid out above.
Continuing on, let's say Petco sells the $100 of merchandise for $50. The variable cost of the merchandise in this case is still $40, so petco is 'making' $10 off the sale. Now that $10 might not cover the $30 in fixed costs above, but those fixed costs would have been paid REGARDLESS. This means if petco had not sold anything, they still would have paid that $30.
Now, assume because of this promotion, petco sold 5 times as much stuff as it would normally have sold. This means $500 worth of merchandise where it would have normally sold only $100.
The sales price was $250, the variable cost was $200 ($40 x 5). The fixed cost remains the same, at $30. So petco still made $20 overall in this scenario, just at a lower profit margin.
Considering the lowest coupon amount was 10% off, anyone with a coupon at a normal sales volume level buying their regular $100 worth of stuff would have paid $90, and petco would have made the same $20 profit, albeit at a much higher margin percentage.
TL;DR: I may not have exact numbers, but I do in fact have a good idea what petco's margins are.
Petco changed the 50% off page at about 2PM PST so it prints a 10% coupon. DO NOT USE 50% LINK IN THE OP - it's 10% now.
PETCO CHANGED THE DIRECT LINK TO THE COUPON GRAPHIC at ~5pm PST
THERE ARE NO LEGITIMATE SOURCES FOR THE COUPON NOW, ONLY PDF AND JPG IMAGES. Stores have been told to limit the coupon to a max savings of $25, so if you have a 50% off, only buy $50 worth of stuff. (Who wants to call corporate and complain if you are an actual P.A.L.S member?)
50% off works EVERYWHERE.
Screen grab of 50% coupon: http://slickdeals.net/forums/showpost.php?p=
PDF file was printed directly from the OP link before Petco changed it. On the bottom part of the page, it has the petco website link.
If you're in Long Island NY - Go to the Wantagh Grand Opening - Special deals on everything, combined w/ coupon Realllllyy Slick