A Closer Look at U.S. Pet Industry Sales in 2018

April 10, 2019

By: The Pet Business Professor

According to John Gibbons, president of A GPS for Pet Businesses, based on numbers from the American Pet Products Association (APPA), the total U.S. Pet Industry increased $3.05B (4.4%) in 2018 to $72.56B. This is slightly more than last year’s increase of 4.1% and very consistent with the 4+% annual growth rate since 2011. There was one notable exception to the “norm”. In 2016 the industry grew 10.7% due to an upward adjustment in Food $ which research had shown to be too conservative. However, the industry has gotten “back on track” in the last 2 years.

As you recall, 2017 brought considerable excitement with a record low inflation rate of 0.4%. This meant that 90.2% of the increase was a real increase in the amount of pet products and services sold. In 2018, the pricing turned up by +1.25%, a more normal rate. Sales continued to grow but the amount of real growth fell to 70.6%, also a more normal number. However, these are “summary” numbers. Each segment has a different story to tell. In this report we’ll take a closer look at the performance of the total market and importantly, the individual segments. The report will cover 2018, but also put this year’s numbers into perspective for the period from 2009 to 2018.

Here are the specifics from 2018.

-After record deflation of -1.1%, Pet Food segment pricing stayed low, maintaining the highly competitive market.

-The drop in live pet sales occurred as projected. This critical industry segment continues a gradual decline.

-Pet Supplies flipped from deflation to inflation, the highest rate since 2009. Sales surprisingly increased greater than anticipated, but 22% was due solely to price increases.

-The inflation rate in the Service segment more than doubled. This means that the drop in the amount of Services was actually -3.2%, 4 times greater than the drop in retail dollars.

-Veterinary pricing also moved up from a record low rate. This probably caused a slight reduction in frequency, so they didn’t meet the projection. 43% of the increase was due to inflation, which is actually low for this segment.

-The Total Pet Market was up 4.39% as the Product segments beat their projected numbers while the Service segments missed. The upturn in prices definitely hurt both Services and Veterinary, probably through reduced frequency. The Food segment retained “the low ground” in prices and continued to expand upgrades. The Supplies segment quite remarkably avoided the usual negative impact that inflation has on sales.

See the full report here.

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