Once a $1bn business, Pet Circle profits have been hurt by heavy hitters entering the market

Once-celebrated ‘unicorn’ retailer Pet Circle has posted a $36.9m loss as competition from retail giants Woolworths and Bunnings bites into the online pet retailer’s margins.

Pet Circle co-founder Mike Frizell stepped down as chief executive after 15 years.

Pet Circle, the online pets goods retailer that hit “unicorn” status a few years ago and has professional athletes across AFL, rugby and cricket in its shareholder ranks, has had a blowout in losses.

Co-founded by former investment banker Mike Frizell, Pet Circle was the toast of the start-up sector a few years ago as its value hit $1bn, give it unicorn status. Successful funding rounds brought in investors from the sporting world as well as businesses such as Prysm Capital, TDM Growth Partners, Baillie Gifford and AirTree Ventures.

But heightened competition that has triggered price wars, as well as cashed-up players such as Woolworths and Bunnings entering an increasingly crowded market has pressured margins.

Latest accounts lodged by Pet Circle with the corporate regulator bear the scars of that intense competition, such as price deflation, as well as a sharp drop in the company’s profit margins.

Pet Circle has reported a slip in full-year sales to $373.42m for fiscal 2025, down from $384.53m in 2024.

Full-year product margin reduced by 156 basis points, the company repeated in its results summary, compared with the previous period as competition stayed high throughout the year.

This led to a blowout of its full-year losses to $36.9m from $26.4m in 2024.

In August Mr Frizell stepped down as chief executive, bringing in former Woolworths e-commerce executive and Menulog Australia boss Alistair Venn to run the company.

In 2022 Mr Frizell had high hopes for the start-up as he closed off a series-C $125m funding round that he said would be used to accelerate Pet Circle’s growth plans, including a 24-hour Vet Squad service.

As many as 20 professional athletes across AFL, soccer, rugby league and cricket invested through Athletic Ventures, an investment syndicate for former and current elite athletes founded by former Fremantle and GWS Giants midfielder Matt de Boer.

The pet-care and products sector is believed to be worth as much as $10bn annually and enjoyed a spending boost from the pandemic as more people took on pets to improve their wellbeing.

However growth in pet ownership has stabilised, and bigger retailers such as Woolworths and Bunnings have stepped into the sector.

Hardware chain Bunnings in 2023 launched pets products alongside its more traditional DIY and trades products, and which followed a move by Woolworths in 2022 to spend $586m on buying a controlling stake in pets business Petspiration.