Sales of pet products and services rose 5% in 2009 to reach $53 billion -- an increase of $2.5 billion despite the recession, according to market research publisher Packaged Facts.
The company attributes the economy-bucking performance to factors that ensure an even better performance in 2010 and 2011, says Don Montuori, publisher of Rockville, Md.-based Packaged Facts. "Chief among these factors is the human/animal bond, which is an excellent insulator against recessionary cutbacks, and the 'pet parent' sentiment has never been higher," Montuori says.
The pet market includes veterinary services, pet food, non-food pet supplies, and non-medial pet services. Pent-up pet parent demand for products and services that both enhance pet health and pamper animal companions will begin to kick in during 2010. Packaged Facts projects that sales will reach $72 billion by 2014.
Many pet owners are as unlikely to seriously cut back on spending for the "pet" family as they are for their "human" family, and in many cases would do so only after reducing spending on their own less essential needs, Montuori says. Such tendencies have typified the behavior of pet owners across the economic spectrum, be they affluent or middle class consumers. Even pet owners who may have cut back in other areas continued to spend on small indulgences for their pets, which explains the increase in sales of items such as dog treats and cat snacks during 2009.
"Although economic recovery is underway, no one expects consumer confidence and spending to rebound to pre-recession levels overnight, with most economists predicting a slow recovery," according to the report, which was authored by David Lummis, senior pet market analyst for Packaged Facts. "As a consequence, no pet market participant can afford to sit back during 2010, or to ignore recessionary effects on consumer shopping patterns that could linger for years. To weather the economic storm, many Americans have reprioritized shopping lists along essential vs. discretionary lines, reevaluated channel loyalties based on appeals including convenience and value, and traded across categories and brands -- all trends likely to continue for the foreseeable future."
The economic downturn is favorable to value channels and brands, and relatively strong pet product sales in mass-market channels during 2009 bear this out, according to the report. Assuming a slow recovery, mass channels will continue to have the upper hand in 2001, Packaged Facts predicts, and as of early 2010 PetSmart and Petco are clearly already on the offensive with price-cutting promotional marketing programs. By the end of 2010, however, Packaged Facts expects the retail playing field to be more level, with those premium-inclined shoppers that may have defected to mass returning to pet specialty as pent-up demand for higher-quality fare kicks.
The word "restraint" will continue to characterize how Americans shop and what they buy during 2010 and 2011, making value appeals based on pet health and safety, professionalism, practicality, convenience and comfort more important than ever in wooing the nation's 61 million pet-owning households and meeting the needs of their nearly 400 million pets, according to the report. "At the same time, developments like the ongoing celebrity influx into the market -- the most recent big gun being Martha Stewart (whose middle name, by the way, is 'practical') -- suggest there's plenty of room for pet pampering and indulgence positioned squarely on the human/animal bond."
Packaged Facts' pet market study details retail channel trends including the increasingly aggressive competitive differentiation between pet specialty and mass-market suppliers and retailers, cross-channel shopping vs. shopper loyalty, and the growing role of non-traditional channels including the Internet.