Retail Channel Monthly $ Update – October Final & November Advance

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Time for our monthly update on U.S. retail sales by channel. The current COVID-19 crisis has caused turmoil in the Retail Marketplace. Consumer spending behavior has changed and continues to evolve. In this report we will track the changes and migration between channels. We will do that with data from two reports provided by the U.S. Census Bureau.

The Reports are the Monthly Retail Sales Report and the Advance Retail Sales Report. Both are derived from sales data gathered from retailers across the U.S. and are published monthly at the same time. The Advance Report has a smaller sample size so it can be published quickly – approximately 2 weeks after month end. The Monthly Final Report includes data from all respondents, so it takes longer to compile the data – about 6 weeks. Although the sample size for the Advance report is smaller, the results over the years have proven it to be statistically accurate with the final monthly reports. The biggest difference is that the full sample in the Final report allows us to “drill” a little deeper into the retail channels.

To get the full picture in our monthly channel update we will look at the latest release of both reports. We will begin with the Final Retail Report from October and then move to the Advance Retail Report for November. This will also allow us to better track the consumers’ evolving spending behavior in terms of channel migration.

Both reports include the following:

  • Total Retail, Restaurants, Auto, Gas Stations and Relevant Retail (removing Restaurants, Auto and Gas)
  • Individual Channel Data – This will be more detailed in the “Final” reports and we fill focus on Pet Relevant Channels

The information will be presented in detailed charts to facilitate visual comparison between groups/channels of:

  • Current Month change – % & $ vs previous month
  • Current Month change – % & $ vs same month in 2019
  • Current YTD change – % & $ vs 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the October Final report. The retail market hit bottom in April then began to recover. October saw a new peak and $ are still growing vs 2019. Here are the major retail groups. (The Data in all graphs is Actual, Not Seasonally Adjusted)

The final total is $1.0B less than the Advance report projected a month ago. All groups were slightly down. Relevant Retail: -$0.4B; Restaurants: -$0.3B; Auto: -$0.2B; Gas Stations: -$0.2B. All groups were up vs September and monthly Total Sales exceeded the previous peak in July. Driven by an exceptionally strong month from Relevant Retail and Auto, YTD Total $ales turned positive for the first time since February. The Auto segment is closing in on 2019 $ but Restaurants and Gas Stations are down -$192B. Relevant Retail remains the only positive group in YTD sales.

Now, let’s see how some Key Pet Relevant channels were doing in October.

  • Overall – $ in 10 of 11 groups were up vs September and 9 were up vs October 2019 and YTD. A strong month.
  • Building Material Stores – Their “Spring” lift continued through Summer and now into Fall. While sales peaked in June, they’re still showing double digit % increases vs 2019. Sporting Goods stores are not included in this group, but they have a similar Spring lift pattern. Their sales took off in May, peaked in June but continued to grow vs 2019. In June, their YTD $ vs 2019 turned positive and by October they were up 14.9%.
  • Food & Drug – After slowing in August & September, Supermarket $ were up again in October and are +$66.9B YTD. Drug Stores $ dipped in August but came back stronger in September and October. They’re +$12.4B YTD.
  • General Merchandise Stores – $ in Clubs/SuperCtrs bounced back after slowing in September and are up $28.5B vs 2019. $ Stores sales slowed from June>Sept but grew again in October and are now +12.6% vs 2019. Discount Dept. store sales were slowing before the pandemic. This trend has continued despite their small lift.
  • Office, Gift and Souvenir Stores – A big lift but still below 2019 $. They were hit hard and have a long way to go.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth vs 2019. Sales hit a new peak in October. Many new consumers have discovered online shopping and the behavior is likely to become habitual.
  • A/O Miscellaneous – This is a group of small to midsized specialty retailers – chains and independents. It includes Florists, Art Stores and Pet Stores (22 to 24% of total $). Pet Stores were usually essential, but most stores were not. The others began reopening in May and the number grew in June which produced an increase vs 2019. Sales peaked in July but have stabilized and remain strong vs 2019. In fact, YTD sales are up +10.3%.

The recovery began in May and accelerated in June>July as even more businesses began to re-open. The Relevant Retail Segment was positive in all measurements in May>July. In August>September $ slowed but were still strong vs 2019. In October sales grew to a new peak. The key drivers in the positive numbers vs 2019 remain the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm.  How are things progressing? Here are the Advance numbers for November.

April and May were the 2 biggest spending drops in history. In June, monthly sales increased for the first time since February and continued to grow in July. $ fell in Aug/Sept. but in October, all groups spent more, turning YTD Total Retail positive for the 1st time since February. $ dipped in November but not vs 2019 so the YTD $ vs 2019 increased.

Total Retail – Total Retail spending fell -$7.3B vs October but was up $13.5B vs November 2019. In February 2020 sales were up $60B, +6.6% YTD versus 2019. Then came COVID-19. We hit bottom at -$112B in May and began moving in the right direction. We broke even in October and are now up $14.5B in November but still down -$44.5B from February.

Restaurants – Spending fell -$6.5B from October and -$12.0B vs November 2019. $ales usually drop in November, but not -11.4%. Things remain Topsy Turvy. January and February, normally the 2 slowest months, are on top in 2020. In February YTD sales were up $9B. Then came the forced closures. Re-openings began in May but have run into problems with a resurgence of the virus. Delivery/Pickup can’t make up the difference as spending is now down $135.8B YTD.

Automobile & Gas Stations – When you are staying home your car becomes less of a focus in your life. Auto Dealers began combating this attitude with fantastic deals and a lot of advertising. Monthly $ turned positive versus 2019 in June and have maintained this pace. Although sales dipped in November, this group is now +0.01% YTD vs 2019. Gas Station $ales increased in May>July but fell in August & September. They turned up again in October but were down 10.4% in November. This group is now -$75.4B YTD. People are still not driving as much, for commuting or road trips.

Relevant Retail – Less Auto, Gas and Restaurants – Many non-essential businesses shuttered their doors in March but there was also a rash of binge/panic buying for “necessities” and a big lift in groceries as consumers focused on home cooking which drove spending up $19B. April brought a full month of closures and an end in binge buying, spending dropped $34B from March. In May, the overall market began to reopen so spending began to move in the right direction and this growth continued through July. $ales fell in Aug/Sept but turned up again in Oct/Nov. We should note that the monthly June>November $ are larger than all months in 2019 but December. The primary drivers have been Nonstore, Grocery and SuperCenters/Clubs & $ Stores along with an “extended” spring lift from the Hardware/Farm and Sporting Goods channels. The Relevant Retail group now has posted positive numbers versus last year and year to date for 7 consecutive months and is up $225.6B YTD (+6.8%) vs 2019. In May when the streak began, it was up +2.7%.

Now let’s look at what is happening in the individual retail channels across America. In November, consumer spending in the relevant retail market grew even more positive versus 2019. Let’s see where the $ came from. These groups are less defined than in the Final Monthly reports and we will look across the whole market, not just pet relevant outlets.

In October 11 of 13 channels beat last months $. In November it was down to 9. In September & October 10 channels beat the same month in 2019. This number dipped to 9 in November. In YTD $, 8 are showing an increase, the same as in September & October. The YTD decreases are coming from channels that are primarily nonessential businesses.

After April’s widespread closures there was a retail surge in May. Things truly opened up in June & July and sales continued to increase. In August & September, they slowed then grew again in October & November. Relevant Retail Channels are up $225.6B vs 2019. The essential channels are responsible for the YTD lift vs 2019, primarily:

  • Nonstore Retailers – Even more consumers are online shopping.
  • Food & Beverage, especially Grocery– Restaurant $ are still down so consumers continue to eat & drink at home.
  • Bldg Materials/Garden/Farm– A big Spring lift continues into the Summer/Fall as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – Sales slowed in April but came back in May and continue to grow vs 2019. This group turned the whole Gen Mdse channel positive. It clearly shows that value is still a consumer priority.

Regarding the Individual Large Channels

General Merchandise Stores – Sales grew as we move into the Christmas lift for GM. However, sales for both Regular and Discount Department were fading before the crisis. Club/SuperCtr/$ stores are still the big positive force. In April consumers dialed back their panic buying and spending on discretionary items was also down significantly. Since May we have seen consumer spending return to a more normal, strong pattern in the big and small stores that promise value.

Food and Beverage, plus Health & Personal Care Stores – Although $ were flat, the Grocery segment is still strong, +$70.9B YTD, due to the continuing big drop in restaurant sales. Monthly Sales fell in the Health, Personal Care group but have been up vs 2019 since June. Since August, the YTD $ have been positive. Drug Store $ growth was a key factor.

Clothing and Accessories; Electronic & Appliances; Home Furnishings – Except for September, monthly sales have grown every month since May. All groups increased sales vs October with Electronics/Appliances leading the way at +23.2%. All 3 channels are down significant percentages in YTD sales. Clothing Stores are by far the worst performers. In November they were down 19.2% vs November 2019 and 28.5% YTD. Together, these groups are down $85B vs 2019.

Building Material, Farm & Garden & Hardware – Sales peaked in late spring, as usual. However, this channel continues to benefit from consumers turning their focus to their home needs, including house and yard repair and improvements. This has extended their “Spring” lift into the Fall. $ were up 17.2% vs November 2019 and up +$47.6B (+13.4%) YTD.

Sporting Goods, Hobby and Book Stores – Book and Hobby stores are open and sales in Sporting Goods stores have taken off as Consumers are seeking outdoor recreation. Sales reached a new peak in November, up 10.1% vs last month and 14.0% vs November 2019. The $ exceeded all months in 2019, but December. In April YTD $ were -$3.4B. This deficit was wiped out in September and through November, YTD sales were +$3.0B (+4.3%). Their holiday lift has begun.

All Miscellaneous Stores – This group is mostly small to medium specialty stores – both chains and independents. Pet Stores are essential but most other stores are not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound in May and grew through July when they finally beat the monthly sales for 2019. In Aug>Sept sales plateaued. They turned up in October but are down again in November. In February, this group was up $2.6B YTD. Through November they are down -$2.7B, a difference of $5.3B. Recovery will be a long journey.

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis has only accelerated the ongoing movement to online retail. In February NonStore was up 8.6% YTD. In November monthly sales were the highest for any month in history and they are now up 22.6%, +$158.5B YTD. Their increase is 70% of the total $ increase for Relevant Retail Channels. They are the clear leader, and their performance far exceeds their 12.9% annual increase in 2019. 2020 has become a key turning point for NonStore Retailers.

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded along with their store sales in their regular channel. Whether they are up or down, their online sales are included in the totals.

Recap – April and May saw the 2 biggest year over year monthly sales declines in history. Restaurants, Auto and Gas Stations increased sales from May through July, but results have been mixed since then. All were down in September, up in October and down again in November. The Auto segment drew even in YTD $ vs 2019 in November but Restaurants and Gas Stations are still struggling. The Relevant Retail segment has been the only true positive. Sales slowed in Aug>Sep. but then began grow again, peaking in November. Their Monthly and YTD sales vs 2019 are now up for 7 consecutive months. Overall, they are +$225B YTD but for some segments in this group there is still a long way to go. Total Retail Sales peaked in October. Although $ dropped in November, Total Retail continued to exceed 2019. YTD Total Retail is now up +$14.5B (+0.3%) vs 2019. Unfortunately, the virus is surging, and retail restrictions are being reimposed in many areas. This will be a long battle. We will continue to monitor the data and provide you with regular updates.

 

 

 

 

2019 U.S. Pet Spending by Generation – Gen X CUs Still Spend the Most

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In 2019 Americans spent $77.44B on our companion animals, 0.94% of $8.3 Trillion in total expenditures. Pet Spending was down $0.16B (-0.2%), a marked change from 2 years of increases. There were a number of factors affecting pet spending in 2019. Food rebounded after the 2018 FDA warning on grain free dog food drove spending down. Tariffs on Supplies really hit home causing a huge drop in spending . Veterinary Services again had a small increase, but it was entirely driven by inflation. After the biggest lift in history, Services spending plateaued in 2019.

In this report we will look at how these factors and others affected the Pet Spending for today’s most “in demand” demographic measurement – by Generation. In 2019, we’ll see Gen Z for the first time and the oldest generations will be consolidated into 1 group. Using data from the US BLS Consumer Expenditure Survey we’ll look for answers.

We’ll start by defining the generations and looking at their share of U.S. Consumer Units (CUs are basically Households)

GENERATIONS DEFINED

Gen Z: Born after 1996

In 2019, Age under 23

Millennials: Born 1981 to 1996

In 2019, Age 23 to 38

Gen X: Born 1965 to 1980

In 2019, Age 39 to 54

Baby Boomers: Born 1946 to 1964

In 2019, Age 55 to 73

Silent/Greatest: Born before 1946

In 2019, Age 74+

  • Baby Boomers still have the largest number of CU’s at 43.1M and 32.6% of the total but they are losing ground. In fact, they have 1.9M fewer CU’s than in 2016.
  • The Oldest Generations will continue to lose CUs primarily due to death or movement to permanent care facilities.
  • Gen X has the second most CUs and are the most stable.
  • Millennials have the largest number of individuals, but they rank only third in the number of CU’s. Now, Gen Z appears for the first time. Together, these 2 youngest generations are growing fast, up 1.9M CUs in 2019.

Now let’s look at some key CU Characteristics

One significant change was the increase in homeownership. This was driven by the Gen Xers and Millennials and overcame a drop by Boomers. Separated from Gen Z, Millennial CU size also grew.

  • CU Size – CUs with 2+ people account for 69.8% of all U.S. CUs (down from 70.5% in 2018) and 78.2% of pet $ (down from 80.9% due to a spending drop by 2 person CUs and a lift by singles). Millennials are actively building their H/Hs. However, CU size, with all the related responsibilities, still peaks with the Gen Xers and then starts dropping. The Boomers are the last group with 2+ CUs but that will inevitably fade.
  • # Children < 18 – 27.9% of U.S. CU’s have children and they generate 29.0% of Pet Spending. Although Married Couples with children spent slightly less, CUs with children continue to earn their share. However, the story is more complex. Single parents spent $1.04B less, but the biggest decrease again came from Married Couple only CUs – down -$1.67B. Other “adults only” CUs, of any size spent significantly more on their pets, +$2.77B. Singles led the way with +$1.64B. Overall, there was no change in the # of children per CU in 2019 but there were changes within groups. Millennials, now separated from Gen Z, reported more children as did Gen X, while the number for Boomers was down. The Married with Children group tends to skew younger, but singles have higher numbers at both ends of the age range.
  • # Earners – While not as important as income, Pet spending is also tied to the number of earners in a CU. In 2019, 2+ person, 2 Earner CUs spent 52% more on their pets than 1 Earner CUs. As the chart shows, the “earning” is being done in America by the younger groups, peaking with Gen X and dropping significantly with the aging Boomers.
  • Homeownership – Owning and controlling your own space has been a major factor in increased Pet Ownership and spending. Driven by the younger groups, homeownership increased to 63.74% from 63.48%. There was a clear spending divide. Led by those with no Mtges (+$0.99B), Homeowners spent $1.13B more on their pets while Renters spent $1.29B less. As a result, the homeowners share of Total Pet Spending grew from 79.8% to 81.4%. One key to increased Pet Spending in 2019 was a paid off mortgage.
    • Gen Z are now the most common renters in society. Homeownership by Millennials has moved up to 43% but it is still only 67% of the national average and about 3/4 of the rate of Gen Xers and Boomers when they were the same age.
    • Gen Xers have been above the national avg since 2018 and Homeownership continues to increase with age.

Next, we’ll compare the Generations to the National Avg.:

In Income, Total CU Spending, Total Pet Spending and the Pet Share of Total CU Spending

CU National Avg: Income – $82,852; Total CU Spending – $62,949; Total Pet Spending – $593.51; Pet Share – 0.94%

  • Income – The Gen Xers are the leaders, but the gap narrowed with a 0.3% decrease. The Boomers earn 19% less but are the only other group to exceed the national avg. Income drops radically in the oldest group as they retire, and Gen Z is just getting started. Millennials’ income grew 12.8% but is less than the Boomers and only 75% of Gen Xers.
  • Total Spending – The Gen Xers make the most and spend the most but it’s not out of line with their income. Boomers also spend more than the average but their after tax income still supports it. The oldest & youngest groups are actually deficit spending in relation to their after tax The Millennials’ spending increased 8.2%, twice as much as Gen Xers. With increases in CUs, Income and Spending, the retail importance of Millennials is growing.
  • Pet Spending – Only 2 groups exceed the national average and for the second consecutive year, Gen X holds the top spot. Millennials are 3rd but are 26% below Boomers and 33% below Gen X. The oldest and youngest groups trail.
  • Pet Spending Share of Total Spending – The national number fell from 0.98% to 0.94%. The drop was due to a 10% decrease from Millennials/Gen Z and a 3% decrease from the oldest group. Gen X held their ground and Boomers are still the only group to spend more than 1% of their total on their pets. However, the most significant change is that in 2018 every group spent at least 0.92% of their total CU spending on their pets. In 2019 this minimum is down to 0.82%, with the youngest groups leading the way down.

Now, let’s look at Total Pet Spending by Generation in terms of market share as well as the actual annual $ spent for 2015 through 2019. The 2019 numbers are boxed in red (decrease) or green (increase) to note the change from 2018.

  • Boomers are still the biggest force in Pet Spending, but their share continues to fall – 36.6% from 46.8% in 2017.
  • There are definite age-related patterns which are readily apparent in the bar graph. Spending in the oldest group is relatively low and falling. In contrast, the two youngest groups are showing consistent year after year growth. The Boomers are in the middle. They still have the biggest share but are also the most likely group to have a strong reaction to trends, especially in this era of super premium foods. With their tremendous buying power, this can cause major spending swings impacting the whole industry. There was no swing in 2019 as their $ were down again.
  • In 2019, the Boomers spending fell -$0.88B and Silent/Greatest was down -$0.46. The Gen Xers and Millennials/Gen Z stepped up again, +$1.17B. However, they fell a little short.
  • Boomers – Ave CU spent $669.25 (-$2.78); 2019 Total Pet spending = $28.73B, Down -$0.88B (-3.0%)
    • 2015>2019: Down $3.42B; Their roller coaster stopped as spending continued down, now -10.6% from 2015.
  • Gen X – Ave CU spent $727.05 (+$18.73); 2019 Total Pet Spending = $25.75B, Up $0.59B (+2.4%)
    • 2015>2019: Up $7.49B; Their annual Pet spending growth since 2015 has been strong and consistent. Their increase of $7.49B in that time was just slightly behind Millennial/Gen Z.
  • Millennials + Gen Z – Ave CU spent $471.43 (-$15.42); 2019 Total Pet Spending = $17.50B, Up $0.58B (+3.4%)
    • 2015>2019: Up $7.77B; Their spending growth pattern since 2015 mirrors Gen X. However, they have the biggest increase in $, $7.77B, +80%.
      • Millennials Only – Ave CU spent $493.61; 2019 Total Pet Spending= $16.43B
      • Gen Z Only – Ave CU spent $280.09; 2019 Total Pet Spending= $1.07B
  • Silent + Greatest – Ave CU spent $388.85 (-$17.73); 2019 Total Pet Spending = $6.46B, Down $0.45B (-6.5%)
    • 2015>2019: Down $1.15B; They still spend a relatively high amount on their pets, but age is becoming a factor.

The older generations, including Boomers may be starting to fade as 2019 spending for both groups was below 2015. The younger generations are consistently increasing their annual spending which bodes well for the future.

Let’s look at the individual segments. First, Pet Food…

  • The trendy nature of Pet Food is more pronounced for the Boomers. In the older generations, pet ownership is fading. The younger groups are showing more consistent growth and Gen X led the way in the 2019 Food rebound.
  • The Millennials’ have led the way in food trends, including value shopping and they are the only group with an annual increase every year since 2015.
  • Boomers – Ave CU spent $294.51 (+$29.78); 2019 Pet Food spending = $12.56B, Up $0.78B (+6.6%)
    • 2015>2019: Down $3.01B– Spending plummeted in reaction to the FDA warning. The 2019 rebound fell far short.
  • Gen X – Ave CU spent $284.18 (+$50.13); 2019 Pet Food spending = $10.03B, Up $1.71B (+20.5%)
    • 2015>2019: Up $2.77B If this highest income group reacted to the FDA, it was to further upgrade their food.
  • Millennials + Gen Z – Ave CU spent $161.85 (-$12.91); 2019 Pet Food Spending $6.13B, Up $0.08B (+1.4%)
    • 2015>2019: Up $2.39B They are the only group with increased spending every year since 2015. They are growing in numbers and in their commitment to their pets. Since 2014 they have been the pioneer in food upgrades.
      • Millennials Only – Ave CU spent $171.55; 2019 Pet Food spending = $5.79B
      • Gen Z Only – Ave CU spent $34.76; 2019 Pet Food spending = $0.34B
  • Silent/Greatest – Ave CU spent $152.69 (-$10.70); 2019 Pet Food spending = $2.48B, Down $0.22B (-8.1%)
    • 2015>2019: Down $0.67B; They remain committed to their pets, but their numbers are starting to fade.

Pet Food Spending is driven by trends. In 2018, the FDA warning for grain free dog food created a turmoil. Boomers dialed back to more regular food. The younger groups were less affected. In 2019 It looks like Gen Xers may have upgraded to even more expensive varieties which helped fuel the big $ rebound. Now, let’s look at Supplies Spending.

  • Boomers still have the largest share but even with a $1.8B drop in spending, the younger groups have a big “presence” in Supplies. Gen Xers and Millennials/Gen Z together account for 55.8% of Supplies spending.
  • Baby Boomers – Ave CU spent $136.81 (-$20.00); 2019 Pet Supplies spending = $5.90B, Down $0.96B (-14.0%)
    • 2015>2019: Down $0.04B; Spending peaked 2017, then headed down probably due to the impact of tariffs.
  • Gen X – Ave CU spent $154.17 (-$38.03); 2019 Pet Supplies spending = $5.47B, Down $1.35B (-19.8%)
    • 2015>2019: Up $0.90B; Gen Xers generally perform best in Supplies and they are the leader in CU spending, but they too were affected by tariffs. They also further upgraded their Food and partially paid for it with Supplies $.
  • Millennials + Gen Z – Ave CU spent $118.17 (-$12.96); 2019 Pet Supplies spending = $4.34B, Down $0.23B (-5.0%)
    • 2015>2019: Up $1.11B; Supplies are still Millennials’ best performing segment. In 2016 they cut spending to fund increases in Food and Veterinary. They came back strong, +$1.8B by 2018 and were the least impacted by tariffs.
      • Millennials Only – Ave CU spent $118.64; 2018 Pet Supplies spending = $3.92B
      • Gen Z Only – Ave CU spent $114.01; 2018 Pet Supplies spending = $0.42B
  • Silent + Greatest – Ave CU spent $65.13 (-$23.94); 2019 Pet Supplies spending = $1.10B, Down $0.45B (-28.9%)
    • 2015>2019: Down $0.22B; Spending has been slowly increasing but this $ conscious group was hit hard by tariffs.

In 2016 most Consumers value shopped for the super premium food that they had upgraded to in 2015 and spent some of the saved money on Supplies. Supply prices dropped in 2017 and everyone under 72 years spent more! Late 2018 saw added tariffs. Boomers dialed back their purchase frequency. Everyone else was either unaffected or bought more, early. In 2019 the sharply rising prices drove spending down in all groups.

Next, we’ll turn our attention to the Service Segments. First, Non-Veterinary Pet Services

  • Gen Xers kept the top spot. The oldest group had the biggest increase, but the Gen X/Millennial share is still 56.0%.
  • Baby Boomers – Ave CU spent $64.50 (+1.51); 2019 Pet Services spending = $2.78B, Up $0.03B (+1.0%)
    • 2015>2019: Up $0.31B; Boomers still need Services. They held their ground after trending down for 2 years.
  • Gen X – Ave CU spent $85.60 (-$8.62); 2019 Pet Services spending = $3.04B, Down $0.31B (-8.1%)
    • 2015>2019: Up $0.92B; After the big lift in 2018, it’s likely that they looked for and found a better price.
  • Millennials + Gen Z – Ave CU spent $50.43 (-$4.28); 2019 Pet Services spending = $1.85B, Down $0.05B (-2.8%)
    • 2015>2019: Up $1.83B; Value shopping is also likely. The drop was less than Gen X because of 5+% more CUs.
      • Millennials Only – Ave CU spent $54.34; 2019 Pet Services spending = $1.80B
      • Gen Z – Ave CU spent $15.47; 2019 Pet Services spending = $0.06B
  • Silent + Greatest – Ave CU spent $56.38 (+$15.13); 2019 Pet Services spending = $0.95B, Up $0.24B (+33.0%)
    • 2015>2019: Up $0.31B; They definitely have a need. In 2019, they found the money.

This segment has always found a way to grow every year – until 2017. The small drop in spending was caused by An extremely competitive environment. Consumers increased frequency but paid less. In 2018, the increased number of outlets really hit home, especially for the younger groups and spending exploded. Value and Convenience in 2019 resulted in Gen Xers and Millennials looking for and finding a better deal while the oldest group “got on board”.

Now, Veterinary Services

  • Boomers are still the biggest spenders in this segment, but again they only lead Gen Xers because of more CUs.
  • The younger groups both have a consistently growing commitment to this Pet Parenting responsibility. The combined Veterinary spending of Millennials/Gen Z and Gen Xers has increased $6.23B (+101%) since 2015.
  • Boomers – Ave CU spent $173.43 (-14.07); 2019 Veterinary spending= $7.48B, Down $0.72B (-8.8%)
    • 2015>2019: Down $0.69B; Except for the lift in 2017, spending was consistent at $8B. In 2019, it turned down.
  • Gen X – Ave CU spent $203.10 (+$15.25); 2019 Veterinary spending= $7.21B, Up $0.54B (+8.1%)
    • 2015>2019: Up $2.90B; Since 2016, their Veterinary spending has exceeded the national CU Average. In 2018, they took over the top spot in CU spending. In 2019 they widened their lead over the Boomers.
  • Millennials + Gen Z– Ave CU spent $140.98 (+$14.73); 2019 Veterinary Spending $5.18B, Up $0.78B (+17.7%)
    • 2015>2019: Up $3.33B; Their CU spending is up 118% since 2015. Veterinary has become a much bigger priority.
      • Millennials Only – Ave CU spent $149.08; 2019 Veterinary spending = $4.92B
      • Gen Z Only – Ave CU spent $68.60; 2019 Veterinary spending = $0.25B
  • Silent + Greatest – Ave CU spent $114.65 (+$1.77); 2019 Veterinary spending $1.93B, Down $0.02B (-1.2%)
    • 2015>2019: Down $0.85B; Money is a priority, but so is their pets’ health. The $ decrease is just from fewer CUs.

Gen Xers and Millennials have consistently increased their commitment to Veterinary Services. In 2015, their share of Veterinary Spending was 36%. It is now 55.7% – a 55% increase. This is a big, fundamental change in spending behavior.

One last chart to compare the share of spending to the share of total CU’s to see who is “earning their share”.

  • Gen X Performance – Total: 122.3%; Food:119.7%; Supplies:121.3%; Services:131.2%; Veterinary:123.2%
    • In 2019 the Gen Xers kept the top spot in performance. They again “earned their share” in every industry segment as well as Total Pet. They have increased their Total Pet Spending every year since 2015. During this time, their spending has become more balanced and their performance has improved. The only reason that they are not the leaders in Total $ is that the Boomers have more CUs. Gen Xers range in age from 39 to 54 so they are just entering the peak earning years. Expect their commitment and pet spending to continue to grow.
  • Baby Boomers Performance–Total: 112.3%; Food:123.4%; Supplies:107.6 %; Services:98.9%; Veterinary: 105.2%
    • Boomers led the way in building the industry and are still the “top dogs” in $. They earn their share and in fact, are the still the spending leader in Total Pet and every segment but Services. However, their CU numbers are beginning to fall – down 1.9M (-4%) since 2016. Their Spending fell again, in 2019 but nothing like the record $6.5B drop in 2018. They should hold the lead in Pet $ for several more years and be a major force for many more, but the Gen Xers and then Millennials are preparing to take their turn at the top.
  • Millennials Performance – Total: 83.8%; Food:74.3%; Supplies:93.3%; Services:83.3%; Veterinary:90.4%
    • Like the Gen Xers, Millennials have increased their pet spending every year since 2015. Their spending is more evenly balanced, and performance has improved. They are growing in CU numbers but their future as the Pet Parenting spending leaders is still a long way off. They need increased income and a more stable home situation. They are educated and well connected. Indications are that they may lead the way in adopting new trends, especially in food. Their progress is good news, but in reality, their leadership is still more than a decade away.
  • Silent/Greatest Performance – Total: 64.6%; Food:62.4%; Supplies:51.2%; Services:86.4%; Veterinary:69.5%
    • Pet Parenting is more challenging in old age, but they remain committed. 0.88% of their total spending is on pets.
  • Gen Z Performance – Total: 48.7%; Food:38.6%; Supplies:89.7%; Services:23.7%; Veterinary:41.6%
    • They are just beginning so the numbers are low. Next year we’ll get the first measurement of their progress.

Baby Boomers are still the Pet $ leaders, but Gen Xers, followed by Millennials are ultimately the future of the industry. Both groups seem ready, willing and able to take their turn at the top. As these groups have risen, Pet Spending has become more balanced across the generations. This bodes well for the continued strong growth of the industry.