According to the American Pet Products Association (APPA), 62% of U.S. households own a pet. This equates to 72.9 million homes. Dogs lead the pack, followed by cats and fresh water fish. Pets are big business for U.S. retailers. For as long as the nation’s annual spending on pets has been measured, the tab has risen without interruption. APPA reports that collective spending for 2011 came in at more than $50 billion — a significant increase over 2010, when pet owners spent a total of $48 billion.
Times may be tough and many shoppers are cutting back on eating out and their spending at the grocery store. Yet, few are dialing down dollars spent on their pets. A few impressive numbers:
• $19.5 billion was spent on pet food in 2011 (up from $18.8 billion).
• Supplies and over-the-counter medicines grew to $11.4 billion (up from $10.9 billion).
• Likewise, dollar growth was measured for vet care, grooming and boarding.
• Contrary to trends in “human food,” national pet food brands increased their category share by 1.2% points to 86.7% in 2011.
• On the other hand, private-label non-food pet supplies increased 15%, while all nonfood pet supplies grew only 1% in the same period.
Specialty pet retailers like PetSmart and Petco continue their expansion and growth plans, and PetSmart has posted an earnings growth rate of more than 10% for the past 10 quarters. Pretty impressive.
Other developments in the pet food markets are very much like trends seen in regular food. For example, retailers are increasingly featuring multiple quality tiers with private-brand foods on the one hand, and gourmet selections on the other.
With overall food spending in a dip, retailers are capitalizing on America’s love for pets. Supermarkets offer several aisles of food, snacks and toys. Many are organizing pet adoption events and have started pet clubs rewarding discounts for repeat purchases, much like regular loyalty programs.
Curious to learn more on how you can capitalize on the booming pet business? Whether your shopper audience prefers to buy gourmet pet food or perhaps has switched to private brands, Buxton can help you with household level data to hit home on the ever-expanding array of pet foods and products.