It was! I got that information from a biased source though, I worked with Petco corporate.

The idea is: you operate at a loss to undercut your competitors, in hopes you'll attract long time customers. Eventually, they either ramp up costs, or legitimately have a way to cut down the costs of operations. Usually, it's the latter.

If I remember correctly, most of their money was also spent on marketing, which honestly worked. We'll see how that continues to play out, though.