Shoppers Splurge on High-Quality Pet Food
With inflation at multi-decade-year high, many consumers are adjusting their shopping habits to save money. That said, there’s one category where shoppers have refused to cut back: high-quality pet food.
Both Chewy (CHWY) and Petco (WOOF) recently reported that there has been no significant trade down by consumers in pet food. In other words, pet owners are still willing to splurge on expensive high-quality pet food despite their budgets being squeezed. This shows younger generations take their pet’s health and wellness very seriously, with a corresponding willingness to spend cash.
Ron Coughlin, the CEO of Petco, has stated that “pet parents are driving one of the biggest trends that the pet industry has seen.” He notes consumers increasingly seek human-grade food for their pets.
This trend is being led by Millennials and Gen Z, who prefer to feed their pets real food as opposed to highly-processed kibbles. But there have been some cuts observed. Both Petco and Chewy report lower spending on things like leashes and toys.
Pet supply retailers are using this data to introduce new product lines focused on pet health and wellness.
Finding Ways To Compete
Pet-centric firms like Petco and Chewy find it increasingly difficult to compete with the likes of Amazon (AMZN) and Walmart (WMT), which sell just about every product you can think of. In response, Petco and Chewy are looking to develop new pet wellness products and services in order to lure in Millenial and Gen Z shoppers.
For example, Chewy just recently expanded its pet health offerings with a new line of wellness and insurance services called CarePlus. Additionally, Petco is partnering with the makers of Clif Bar to create a similar high-quality bar for pets. Each company seems comfortable betting that pet owners will continue to prioritize their pet’s health and wellness despite worsening economic conditions.
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