There are a lot of reasons why one company purchases another. Increasing profits by reducing competition is one of the least common reasons. Generally speaking, businesses acquiring other businesses within the same industry but not performing the same function is a healthy function in any industry that is undergoing consolidation. If the effect of this were to inhibit competition, Petsmart, NLS, and other companies would be encouraged and within their rights to file anti trust complaints to the DoJ.
The online retailing supply side has not been reduced in magnitude therefore there is no economic reason for prices to rise. Similarly, the brick and mortar retail supply side has not been reduced in magnitude therefore there is no economic reason for prices to rise.
What has happened at least along one line of reasoning is that Petco has obtained more purchasing power vis a vis the food, equipment, etc suppliers and may be able to reduce inventories, reduce the cost of goods sold, headcount, etc. to produce more profits and/or to reduce prices to consumers. Petco also might simply have wanted a significant increase in the on-line market and decided that this was a better alternative than building that structure from scratch.
Improving the efficiency of a fragmented industry via consolidation without achieving monopoly power does not normally lead to higher prices.
