In 2008 and 2009 the Pet Industry took a dip. Retail Sales still went up but in terms of the amount of Pet goods and services, the consumer actually bought less – just paid more – in each of these successive years.
In 2010 this turned around as both Retail $ AND the amount purchased rebounded strongly. We’ll take a closer look at the period from 2009 to 2014 – by industry segment as this recent market performance has a direct bearing on the future.
There are 4 segments in the Pet Market as recognized by the USBLS:
- Veterinary Services
- Non-veterinary Services
- Pet Food
- Pets, Supplies and Accessories
We’ll divide this into 3 Posts: Services, Food & Supplies and Total Market.
For this 2009-14 period analysis of this and other segments, we’ll establish our “Base” year as 2009. All changes will be relative to this year’s numbers.
We’ll start with Veterinary Services:
Here’s a “Visual” comparing Retail $ to Sales adjusted to 2009 to remove price increases:
Veterinary Services Market 2009-2014 Recap
- Retail for services grew 26.7% (average annual growth rate 4.85%)
- CPI (Prices) went up 18% (average annual increase 3.37%)
- 70% of this segment’s growth was from price increases
- Adjusted growth (factoring out prices): 7.3% (average annual growth rate 1.42%)
- 2011 & 2012 – Years of ever increasing prices cause consumer reaction. They bought less in terms of the amount of services – just paid more in two successive years.
- 2013 – Market still has not yet got back to 2010 levels in terms of the amount of purchases.
- The estimated increase in retail purchases of 6.1% for 2014 seems ambitious. Moreover, the supply segment is seeing a rapid growth in OTC meds and supplements as the consumers look for home remedies.
Now we’ll consider Non-Vet Services like grooming and boarding.
Here’s a “Visual” comparing Retail $ to Sales adjusted to remove price increases:
Non-Veterinary Services Market 2009-2014 Recap
- Retail for Non-Vet services grew 40.8% (average annual growth rate 7.08%)
- CPI (Prices) went up 12.3% (average annual increase 2.35%)
- Only 1/3 of this segment’s growth was from price increases!
- Adjusted growth (factoring out prices) – 25.4% (average annual growth rate 4.63%)
- Every year minimum adjusted growth rate of 3.5%
- 2012 – Market enjoys spectacular growth – 9.8% retail and even 6.8% after price adjustments
- This is a small but fast growing segment. No indication of hitting a pricing wall…yet. As this segment becomes larger with more participating consumers, pricing pressure may become an issue.
In our next Post, we’ll look at the Pets & Supplies and Pet Food Segments.