Chewy facing softening new customer growth

Historically, Chewy’s revenue growth was largely driven by a growing customer count. However, following the pandemic boom, Net Sales per Active Customer (NSPAC) has become the larger contributor to top-line growth amid an elevated inflationary environment, while Chewy’s customer count growth has slowed dramatically. 

According to Earnest Analytics Orion transaction data, the customer count decline is primarily driven by an inability to attract new customers, which are nearly 50% lower on a monthly basis in 2023 compared to the average monthly adds from 2019 to 2022. While the number of reactivated customers has also slowed, the deterioration of new customer additions is more pronounced. These trends suggest Chewy’s target core consumer base may be saturated and customer count may grow much more in-line with the overall industry.