Pet Industry Insight

The Pet Industry in a Changing Economy

As an industry we have been extremely lucky with huge growth over the past decade, even during former tough economic times. But, for the first time since most of us can remember, today’s climate is affecting even our beloved industry. Fortunately, not as heavily as other industries such as travel. But, nonetheless, it has people thinking and examining their own spending and business strategies.

The changing economy on the pet industry is a mixed bag. For retailers, prices are finally reaching a point where even the most resilient in our country are starting to rethink each trip to the store. People aren’t just hopping into the car to run out for a single item or two, they’re waiting until a whole list can be generated and handled in a single trip. For a person to go specifically to a pet store, they need to get something they can’t find anywhere else. And, if they’re at a grocery store, they are more likely now to get their pet products there and save an additional trip. As a result, we see more non-traditional outlets carry pet supplies. This puts new pressure on pet stores to find compelling and creative ways to attract customers such as adding specialty services such as grooming or boarding. An added challenge to these stores is the rise in the use of the internet to shop as those purchases enable consumers to avoid the cost of gas altogether.

For manufacturers, this economy is also a mixed bag. Because the pet industry is such a fragmented industry, in some cases the smaller companies are finding it easier to thrive than some of the larger, multi-product/multi-animal companies. Even higher end boutiques and products are feeling less of a direct impact because their consumer is less likely to feel the pinch of rising prices. But, we’re seeing a migration away from middle of the pack items as those consumers are now looking for value priced products. This polarization is causing many companies to rethink where they are putting their emphasis.

Even with these changes, thankfully because we consider pets part of the family, we will tend to cut back or stop spending in most areas before we cut back on our pets. While many are feeling pressure, the industry as a whole continues to grow. Pet specialty services, veterinary services and high end products are flourishing and driving the overall industry in an upward direction. I am confident that the pet industry and the US economy will survive even this current bind. Things will change for sure - some of them permanently - but we will still move ahead. Today's successful business will respond quickly to these coming changes and take advantage of their strengths to become strong competitors.