Pet Retailers Poised for Growth
Retailers targeting children and pets may be better insulated
from a potential slowdown in consumer spending, according to
a semi-annual report by Standard & Poor’s Equity Research
Services (New York).
According to “Retailing: Specialty Industry Survey,”
working adults who view their pets as full-fledged family
members equal to humans will continue to spend money on them
despite higher interest rates, gas prices and the dampening
effect of a declining housing market—putting pet supply
retailers in a better position to weather a slowdown in consumer
spending.
“While consumer spending is slowing, we still project
it to grow 2.5 percent for the rest of the year, which is
below our full-year forecast of 3.1 percent and well below
2005’s growth of 3.5 percent,” said Michael Souers,
specialty retail analyst for Standard & Poor’s Equity
Research Services. “When spending slows, adults are
more likely to cut back on spending for themselves before
they cut back on their spending on children or pets. Parents
will forgo a lot of things before they cut into their kids’
allowances or downgrade their pet’s lifestyle.”
Standard & Poor’s Equity Research cited PetSmart
Inc. (Phoenix) as being well-positioned to grow despite the
slowdown in consumer spending. S&P has a “Strong
Buy” recommendation for PetSmart due to the growing
trend of pet pampering and the growth of pet accessories.
Standard & Poor’s, a division of The McGraw-Hill
Cos., is a leading provider of financial market intelligence.
[November 2006 PET AGE]
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