Market Has Bite
As Americans adjusted to spending more time at home during the pandemic, there was a buying spree for pets. Similar bursts of demand were seen in other pockets of the market such as home exercise solutions and streaming services. Now, as people emerge from their COVID-19 hibernations, some of these buying habits are being reversed.
Not so for the pet market. A recent survey by the American Pet Products Association revealed that 14% of respondents cited the pandemic as the reason for their pet purchase. While pet adoptions have slowed, spending on those recent additions to the family is holding steady.
Industry observers note that spending on pets is significantly higher now compared to before the pandemic in 2019. The category is growing at a faster rate than grocery spending. Packaged Facts reported $123 billion was spent on pets last year, a 19.3% increase over the previous year. The number is significantly higher than the 7.3% growth rate posted in 2019.
Part of the reason for the bigger spend is due to what people are buying for their pets. It seems owners want only the best for their furry friends and are willing to pay up for premium and fresh foods.
Babies and Older Pets Too
These trends are good news for pet purveyors like Chewy (CHWY) and Petco (WOOF). Both are attempting to anticipate spending habits and the changing needs of owners as pets move through different life stages. The initial spend for basics like a food bowl or toy will later be reallocated to healthcare needs as the pet ages.
To capture their piece of revenue, pet stores are expanding health services such as insurance, veterinary services, and in-store pharmacies. While pet owners may cheer a one stop option for all their pets needs, the retailers are feeling the pressure amid fierce competition
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