Report: US Pet Services Spending Surpasses $9B, Up $2.21B in 2021

Except for a small decline in 2017, non-vet pet services had shown slow but consistent growth in recent years. In 2018, that changed as spending grew a spectacular $1.95 billion to $8.72 billion.

According to John Gibbons, the Pet Business Professor and president of A GPS for Pet Businesses, The number of outlets offering pet services has grown rapidly and consumers have opted for the convenience. However, spending plummeted -$1.73 billion in 2020 due to COVID closures and restrictions. 2021 brought a strong recovery as spending grew by $2.21 billion (+32.0 percent) a new record and hit $9.1 billion, also a record. In this report we will drill down into the data to see what groups drove the recovery. 

(Note: All numbers in this report come from or are calculated by using data from the U.S. BLS Consumer Expenditure Surveys)

Services spending per consumer unit (CU)  in 2021 was $68.13, up from $52.53 in 2020. A 2021 pet CU (68 percent of all CUs) spent $100.19.

More specifically, the 32.0 percent increase in Total Pet Services spending came as a result of:

• 1.8 percent more households
• Spending 9.18 percent more $
• 18.78 percent more often

The chart below gives a visual overview of recent spending on pet services.

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After the big lift in 2018, spending essentially flattened out in 2019. Increased availability and convenience of Services has radically driven up the spending on Services. This happened despite a return to a more normal inflation rate, 2.4 percent. However, inflation grew even stronger, 2.5+ percent and in the second half of 2019 spending declined for the first time in 18 months. The 2020 pandemic brought restrictions and closures which drove spending radically down. In 2021, the recovery began and accelerated in the second half of the year. Now, let’s look at some specific demographics of 2021 services spending.

First, by Income Group.

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Like 2018, all groups spent more in 2021. However, the biggest lifts came from higher incomes, $100K+. The <$70K groups had small increases and in fact, their 2021 spending was basically even with 2016. The 2021 50/50 dividing line in spending for services was $133,000. That is up from $123,000 last year and from $125,000 in 2019. It is still by far the highest of any segment. It is readily apparent that income is overwhelmingly the primary driver in pet services spending.

• <30K (25.5% of CU’s) – $22.47 per CU (+14.3%) – $0.77B, Up $0.11B (+16.8%) – This segment is getting smaller and money is tight, so services spending is less of an option. The lift did push their Services spending up to their 2016>2018 level.
• $30>70K (29.7% of CU’s) – $38.53 per CU (+7.2%) – $1.53B, Up $0.06B (+4.2%) – In 2020, they had the only increase and finished second in spending to the $150K> group. In 2021, they fell to third place, but they are the only group to spend more in both 2020 and 2021.
• $70>100K (14.8% of CU’s) – $52.60 per CU (+25.6%) – $1.04B, Up $0.22B (+26.4%) – The spending of this middle income group had slowly but consistently grown since 2016. Then came the pandemic and spending plummeted in 2020, even falling below 2016. They rebounded somewhat in 2021, but the spending is still below 2018 and 2019.
• $100>150K (14.2% of CU’s) – $97.92 per CU (+55.7%) – $1.86B, Up $0.67B (+56.6%) – They had strong consistent growth from 2016>2019. In 2020 they had the biggest drop, -40 percent. They came back in 2021 but below 2018 and 2019 spending.
• $150K> (15.8% of CU’s) – $185.52 per CU (+24.5%) – $3.91B, Up $1.15B (+41.6%) – They moved steadily down after peaking in 2018. Spending took off in 2021. Their CU Services spending is now two to nine times more than other groups.

Now, let’s look at spending by age group.

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All age groups but 45>54 spent more on services in 2021. This highest income group fell from the top spot, which they had occupied since 2019 to No. 3. The biggest lifts came from 35>44-year-olds and 55>64-year-olds. Here are the specifics:

• 75> (10.9% of CU’s) – $31.76 per CU (+37.5%) – $0.46B – Up $0.12B (+35.6%) This group has the greatest need for pet services, but money is always an issue. In 2019, they had the biggest increase. In 2020, they gave it all back. In 2021, spending surged with a big increase in frequency. 1.4% fewer CU’s spent 4.2% more money, 32.0% more often.
• 65>74 (16.1% of CU’s) – $63.47 per CU (+33.3%) – $1.36B – Up $0.39B (+40.1%). This group is also very value conscious and growing in numbers. From 2016 to 2019, their spending was very stable. In 2020, it fell 20 percent due to a big drop in frequency. In 2021, they came back strong. 5.1% more CU’s spent 11.2% more money, 20.0% more often.
• 55>64 (18.5% of CU’s) $84.25 per CU (+58.5%) – $2.09B – Up $0.75B (+56.3%) After a big drop in 2017, they began to slowly increase services spending. A big drop in frequency drove spending down in 2020, but they had a strong recovery and took the top spot in pet services spending in 2021. 1.4% fewer CUs spent 28.5% more $, 23.4% more often.
• 45>54 (16.7% of CU’s)- $75.57 per CU (+0.3%) – $1.68B – Down $0.02B (-1.2%) This highest income group was No. 1 in services spending until 2016. They regained the top spot in 2019 and held on in 2020 despite a 20 percent drop in frequency. In 2021, they increased frequency but spending fell and they are now No. 3. 1.5% fewer CU’s spent 8.4% less $, 9.4% more often.
• 35>44 (17.2% of CU’s) – $89.32 per CU (+56.9%) – $2.05B – Up $0.78B (+61.3%) Spending exploded in 2018 with a $1 billion increase pushing them to No. 1. In 2019 and 2020, spending fell. In 2021, they had the largest increase and moved up to No. 2 in services spending. 2.8% more CU’s spent 18.6% more $,32.3% more often.
• 25>34 (15.7% of CU’s) – $60.85 per CU (+15.1%) – $1.28B – Up $0.17B (+15.4%) This group of Millennials “found” the services segment in 2018. Their spending slowly fell in 2019 and 2020 but reached a record high in 2021 due solely to a big increase in frequency. 0.2% more CU’s spent 6.0% less $, 22.5% more often.
• <25 (4.9% of CU’s) – $27.44 per CU (-15.4%) – $0.18B – Up $0.02B (+10.9%) After 2018 spending fell and stabilized. In 2021 CUs radically increased but frequency plummeted. 31.1% more CU’s spent 46.7% more $, 42.4% less often.

In 2020, 62 percent of the $1.7 billion decrease in services spending came from the age 55> groups. In 2021, only 45>54-year-olds spent less and the biggest increase was from the age 35>44 group. However, the groups over 55 years old accounted for $1.26 billion (57 percent) of the record $2.21 billion increase. The old folks had a strong pandemic recovery.

Finally, here are some key demographic “movers” that drove the big lift in pet services spending in 2021. The segments that are outlined in black “flipped” from first to last, or vice versa, from 2020. A red outline stayed the same.

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You see the turmoil in 2021 as no segment held its position and 10 of 12 categories had at least one flip. However, unlike 2020, the turmoil was positive as nine segments flipped from last to first and five categories had no segments that spent less on services. In fact, 86 of 96 segments (90 percent) spent more on Services. This beat the previous best of 88 percent in 2018 and was a big change from 2020 when 79 percent spent less.

You see from the graph that the biggest positives were all substantially larger than the biggest decreases. This speaks to the strength and widespread nature of the lift in spending in the segments. We should also note that regardless of race/ethnicity, your housing arrangements, the number of people in your household, the region of the country or the type of area that you lived in, you spent more on pet services. That’s a pretty all-encompassing lift.

Nine of the winners flipped from last to first. This shows that the big services spenders understandably lost the most due to pandemic restrictions and closures. However, they bounced back strong because Pet Services are a regular part of their pet parenting. The winners also demonstrate the importance of income to Services. While this segment has become more demographically widespread, higher incomes dominate. Eight of the 12 winners are either first or second in income in their categories. The only winner that is somewhat of a surprise is 35>44-year-olds. Usually the groups over 45-year-olds dominate.

Almost all of the losers are not unexpected. Once again, if we look at income, eight of 12 are at or near the bottom in income in their category. Two are not – the 45>54-year-olds and Asians have the highest income in their category. Asians are not a surprise loser. Apparently, cultural differences cause them to spend less on their pets than other racial/ethnic groups. The high-income 45>54-year-olds are a surprise. They have been at or near the top in services spending for years. In 2021 they finished third. It looks like they may have value shopped for a better price.

With 90 percent of demographic segments spending more on Services, the recovery was strong and widespread. There are no truly unique patterns, but one trend should be noted. Income is becoming even more important in Services spending. The 50/50 income dividing line in services spending is now up to $133,000. That is 50 percent more than the average CU income and 90 percent more than the median income. Twenty five percent of CUs account for 50 percent of services spending and 72 percent of the $2.2 billion lift.

Overview: After the huge lift in 2018, Services spending plateaued in 2019. There were a lot of ups and downs, but overall, the segment remained essentially stable at its new elevated level of spending. That changed with the pandemic in 2020. Like many retail services segments, Pet services outlets were deemed nonessential and subject to restrictions. This resulted in a radically reduced frequency of visits and was the biggest reason behind the 20 percent drop in spending.

The year 2021 brought a strong recovery with the biggest increase in history. The segments that were hit the hardest by the pandemic generally had the strongest recovery. However, the recovery had a widespread demographic reach. In recent years, with the increasing humanization of our pets, Pet services have become more important to pet parents and the pet industry. For pet retail outlets, offering services provides a key point of differentiation and a reason to shop in their store. You can’t get your dog groomed online. Like other segments, services has experienced strong inflation in 2022. In the past, this has minimally impacted this income driven segment. When the data is available, Gibbons will examine it and release an updated report.