Consumer Spending: Pandemic’s Impact on Pet Products

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The data from this report comes from the annual Consumer Expenditure Survey, which is managed by the U.S. Bureau of Labor Statistics, but is designed and conducted by the Census Bureau to ensure that it is a demographically accurate sample of the U.S. population.

The survey data is derived from over 42,000 consumer interviews and diaries. It measures the size and demographics of households, income, total spending and the specific expenditures on over 1,650 individual products and services, including pet categories.

The pandemic had a big and far reaching effect on U.S. households in 2020. Their sheer number fell by over one million (0.8 percent) as many individuals, especially the younger crowd, returned home or grouped together.

This is the first decline since they began keeping annual records. In the year 2020, spending fell 2.7 percent from 2019, which is not surprising. However, the results were mixed, with essential goods and services showing growth while the spending on the non-essential aspects of our lives declined. Income rose 1.7 percent in 2020, which was unexpected.

These results were also mixed as the top 20 percent of incomes made slightly less while the lower 80 percent made more. Mixed results were the norm in 2020. Let’s look at spending in the pet industry.

PET FOOD

For pet food last year, sales were $36.84 billion, up $5.65 billion (18.1 percent). This came from a $6.77 billion lift in the first half and a $1.12 billion drop in the second half. Consumers binge bought pet food early on in the pandemic. This slowed in the second half, but spending was still far above the old “normal.” Consumers spent 40.8 percent more but 15.7 percent less often, reflecting a strong move to online subscription ordering.

PETS & SUPPLIES

Last year’s sales were $15.16 billion, down 9.8 percent due to a $0.53 billion drop in the first half and a $1.12 billion drop in the second. Supplies have become very price sensitive, and prices continued to inflate through the first half of 2020. A lift is to be expected as pet parents spent more time at home with their pet children. It didn’t happen, because the buying patterns had changed and consumers moved strongly online for food. They often just added supplies to their orders. With fewer in-store visits, impulse purchases fell sharply. Consumers spent 3.6 percent less, 5.8 percent less often.

PET SERVICES

Sales for pet services in 2020 also were down for the year, dropping 20.1 percent to end the year at a total of $6.89 billion. This came from a $0.78 billion drop in the first half and a $0.95 billion drop in the second. Many services-only outlets were not essential so there were closures and pet parents generally used less services. The result was the biggest sales drop in history as sales returned to the same level as 2016-17.

VETERINARY SERVICES

This sector saw an increase in last year’s sales which were up $3.05 billion (14.0 percent). Sales dipped in the first half of 2020 then rebounded with a huge lift in the second half. Only 26 percent of the 2019 to 2020 increase came from inflation, a big change from recent years. Consumers spent 12.8 percent more, 1.8 percent more often. Frequency was up slightly. The big difference was that pet parents “took care of business” and got the needed procedures done.

TOTAL PET

Total 2020 pet sales saw a 14 percent increase up $5.3 billion from the previous year. There was a $4.35 billion increase in the first half and a $0.95 billion increase in the second. Overall consumers spent more, but less often. Food was again the big driver but the overall focus of pet parents in the pandemic was on “needs” as veterinary services also had a big lift. Spending in the more discretionary segments, supplies and services had significant drops in sales. Like the overall marketplace, the pet industry saw both positive and negative impacts from the pandemic. However, our pets are definitely “essential” so the overall result was on the plus side.

John Gibbons has over 40 years of experience in consumer products, including 32 years in the pet industry. Throughout his career, his focus has been on sales, marketing and strategic planning to build companies. The results speak for themselves, as he produced an annual increase in sales every year. If you would like to see more Pet Industry data, check out his Pet Business Professor website.