Americans Defy Inflation When Spending on Pets
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
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.