Pet Stores in Shopping Centers Face Mounting Profit Pressure

Pet retailers operating in Russian shopping centers saw a sharp decline in profitability in 2025 despite relatively stable sales, highlighting the growing financial pressure on brick-and-mortar stores. According to a study by real estate consultancy Nikoliers, inflation-adjusted revenue among pet stores fell by just 1% year-on-year, while operating profit dropped by 37%.

Compared with other retail categories, pet stores ranked among the weakest performers. Fitness operators posted 33% revenue growth and a 38% increase in profit, while foodservice businesses expanded revenue by 15%, although profits edged down by 1%. Grocery retailers also recorded 15% revenue growth despite a 2% decline in profit, and cosmetics and beauty retailers increased revenue by 14% while maintaining a slight improvement in profitability.

Other categories experiencing declining sales included consumer electronics, where revenue fell 7% and profit declined 27%; children’s goods, down 11% in revenue and 46% in profit; home improvement and DIY retailers, down 4% and 10%, respectively; and sporting goods retailers, where both revenue and profit decreased by 4% and 27%.

For pet retailers, the findings suggest that maintaining sales volumes is no longer enough to ensure sustainable store economics. While the study does not identify the specific reasons behind the decline, factors such as occupancy costs, rising operating expenses, increasing competition from e-commerce and changing consumer traffic patterns are likely contributing to margin pressure.

The results are consistent with broader changes in Russia’s shopping center sector. Previous Zooinform reporting, citing Focus Technologies, showed that mall footfall declined by 3% in 2025, while Commercial Real Estate reported the closure of 10 shopping centers during the year. At the same time, landlords continue to rebalance tenant mixes, allocating more space to foodservice, fitness, entertainment and service-oriented concepts, which already occupy up to 30% of leasable space and could account for as much as 50% in the future.

The Nikoliers study reinforces this shift, with categories built around frequent visits, leisure and services delivering the strongest financial performance. For pet retailers, the findings suggest that success in shopping centers increasingly depends on store format, tenant adjacency, customer traffic quality and the ability to integrate physical retail with advisory services and digital sales channels rather than relying on location alone.

The report does not indicate a decline in the pet retail market as a whole. Its conclusions apply specifically to the sample of shopping center tenants analyzed by Nikoliers. Nevertheless, the 37% drop in profitability underscores the need for retailers operating in malls to reassess store economics and compare the performance of shopping center locations with alternative retail formats.