Retail Channel Monthly $ Update – February Final & March 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 – about 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.

We will look at the latest release of both reports. We will begin with the Final Retail Report from February and then move to the Advance Retail Report for March. Remember, February 2020 was pre-pandemic, but in March the impact began. We will continue to compare 2021 to both 2020 and 2019 to track the ongoing evolution of the retail market.

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 2020 and 2019
  • Current YTD change – % & $ vs 2020 and 2019
  • Monthly and Year To Date $ will also be shown for each group/channel

First, the February Final. Retail hit bottom in April then began to recover, hitting record $ in December. January & February $ fell but were monthly records. Here are the major retail groups. (All Data is Actual, Not Seasonally Adjusted)

The final total is $1.7B more than the Advance report projected a month ago. All Groups were up slightly but most of the positive change came from Auto: +$1.0B; Restaurants: +$0.5B; Relevant Retail: +$0.1B; Gas Stations: +$0.1B. All groups were down vs January, but Total Retail still set a February record. Total $ales broke $600B for the first time in December and continued to set monthly records in both January and February thanks to strong performances by Relevant Retail and Auto. Restaurants and Gas Stations continue to struggle although Gas Stations are now above both monthly and YTD 2019 $. Throughout the pandemic, Relevant Retail has been the driving force in the recovery.

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

  • Overall– All 11 channels were down vs January. However, 9 of 11 were up vs February 2020 and 2019 and all but one were up in YTD $ vs 2020 and 2019. 2021 continues its strong start.
  • Building Material Stores – Their strong lift continues. The ongoing surge came as a result of pandemic spending patterns developed in 2020. Consumers began focusing on their homes. They’re still showing double digit % increases. Farm Stores are leading the way, with 20+% increases in all measurements. Sporting Goods stores are not in this group, but they have a similar spending pattern. Sales took off in May, hitting a record peak in December. The lift continued into 2021. They are up 21.0% vs February 2020 and +28.8% YTD.
  • Food & Drug – Supermarkets finished 2020 up +$77.7B. Sales dipped slightly in both January and February but are still +8.4% YTD vs 2020. Drug Stores ended up +$17B (+5.7%) for 2020. Their $ also fell in January and February but are still +4.7% YTD vs 2020.
  • General Merchandise Stores – $ in all channels continue to fall from their December peak. Discount Department Store $ in February were down vs 2020 and 2019. In fact, their YTD $ are now essentially even with 2020. This shows that this channel was having problems even before the Pandemic. The growth slowed in Clubs/SuperCtrs and $ Stores. Combined, they were up 3.0% vs February 2020. However, their YTD sales are still up 8.8%.
  • Office, Gift & Souvenir Stores– Sales dropped again in February. They have negative numbers in all measurements. Recovery is a long way off.
  • Internet/Mail Order – The pandemic has accelerated this channel’s growth. Last February they were up 10.3% YTD vs 2019. This year they are up 29.0%. The pandemic lift spending pattern almost tripled the rate of increase.
  • 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>24% of total $). Pet Stores were usually essential, but most stores were not. Stores began reopening in May and the $ grew. Their 2020 total sales were up +11.6%. February YTD sales are +$1.6B (+11.6%) vs 2020. However, that is down from 2020 when they were +$2.5B (+21%) vs 2019.

The Relevant Retail Segment began recovery in May and reached a record level in December. $ plummeted in January & February but still set monthly records. Almost all members of this group are showing growth, but the key drivers are the Internet, Supermarkets, SuperCtrs/Clubs/$ Stores and Hdwe/Farm. Now, here are the Advance numbers for March.

2020 will always be a memorable year for both its traumas and triumphs. In April & May we experienced the 2 biggest retail spending drops in history, but the problems actually began in March. Sales increased slightly from February but were $34.1B less than March 2019. Retail sales began to recover in June and in October, YTD Total Retail turned positive for the 1st time since February. In December, Total Retail broke the $600B barrier – a historic first. While sales fell from their December peak, monthly sales records were set in both January and February. Then they took off again in March, breaking $600B again while setting a new monthly sales record of $627.9B. A March lift in sales from February is pretty normal but this is the first time in records going back to 1992 that March sales have exceeded those from the previous December. All of the major groups increased sales from February and Restaurants were the only group to register any negatives vs 2020 or 2019. As we progressed through 2020 and now into 2021, we have seen real evidence of the strength and resiliency of the U.S. Retail Market.

Total Retail – As we said, the Total Retail $ for March set a record for the most spending in any month in any year. The $627.9B was up $134.8B (+27.3%) from February and $146.4B (30.1%) more than March 2020. If you compare the YTD 2021 spending to 2019, you see an increase of $232.4B (+15.7%). That is an average annual spending increase of 7.6%. If you just looked at these topline numbers, you would not suspect that a spending crisis had ever happened. Always look below the surface.

Restaurants – This is the only big group with any negative measurements. Last February YTD sales were up 8.1% vs 2019. The Pandemic changed that. Restaurants started to close or cease in person dining in March and sales fell -$33.3B (-52.5%) compared to March 2019. Sales bottomed out in April at $30.1, the lowest April sales since 2003. Sales started to slowly increase in May but never reached a level higher than 88% compared to the previous year. 2021 did not start off well. Through February,  YTD sales were down -16.7% from pre-pandemic 2020 and -10.0% from 2019. That brings us to March. Sales took off, up $14.2B, 28.2% from February and 35.2% from March 2020. They reached $64.0B, the highest level since December of 2019. However, the $ were still down vs March 2019 and YTD $ were still below both 2020 and 2019. We’ll see how their recovery progresses in April. YTD Avg Growth Since 2019 = -3.8%

Auto (Motor Vehicle & Parts Dealers)   – Staying home causes your car to be less of a focus in your life. Sales began to fall in March and hit bottom in April. Auto Dealers began combating this “stay at home” attitude with fantastic deals and a lot of advertising. It worked. They finished 2020 up 1% vs 2019 and have returned to a strong positive pattern in 2021. The “attitude” grew amazingly positive in March as sales reached $145.2B. This was by far the biggest month in history. It beat the former leader, July 2020, by $28B. To show how well consumers responded to their campaign you just need to look at the data. This group has exceeded $110B in monthly sales only 9 times in history. 7 of those occurred after the onset of the pandemic.  YTD Avg Growth Since 2019 = +11.1%

Gas Stations – Gas Station $ales are a mixed bag. Obviously, if you drive less, you visit the gas station less often. Sales turned down in March 2020 and reached their low point in April. They moved up but generally stayed about 15% below 2019 levels for the rest of 2020. In February they were still behind 2020 in monthly and YTD $ but ahead of 2019 in both measurements. In March, sales skyrocketed to $45.6B, 28.4% more than February and a 35.7% increase over March 2020. They turned positive in all measurements vs both 2019 and 2020. It looks like they are beginning their comeback. However, there is another factor that must be considered – inflation. Gas prices can be pretty volatile. They dipped in the first 2 months of the pandemic but then returned to more normal levels for the balance of 2020. They began inflating in 2021 and spiked in March. The March 2021 prices were 22.5% above March 2020. That means that 63% of the 35.7% year over year lift came from just higher prices. Analyzing retail can be complicated. YTD Avg Growth = +3.0%

Relevant Retail – Less Auto, Gas and Restaurants – This is what we consider the “core” of U.S. retail and has traditionally accounted for about 60% of Total Retail Spending. When you look at the individual channels in this group, you see a variety of results due to many factors – non-essential closures, binge buying, online shopping and a consumer focus on “home”. However, overall, April 2020 was the only month in which spending in this group was down vs 2019. Monthly $ales exceeded $400B for the first time ever in December ($411B). They finished 2020 up $251B, +6.8%. Their performance was the only reason that Total Retail was able to finish 2020 with positive numbers, +0.6%. Sales fell in January but continued to set monthly records through February. In March they turned sharply up again, +22.6% from February. Currently, they are up $55.1B, +17.3% vs March 2020 and  +$113.1B, +12.7% YTD. The $373B spending in March is the third highest monthly total of all time, trailing only December 2020 and December 2019. We should also note that the Relevant Retail group has posted positive numbers versus last year and YTD for every month since April 2020 and their average YTD growth rate since 2019 now stands at +9.3%. More channels are turning positive, but the primary drivers continue to be Nonstore, Grocery, SuperCenters/Clubs/$ Stores plus a never ending “spring lift” from Hardware/Farm and Sporting Goods. 

Now let’s look at what is happening in the individual retail channels. March was a spectacular month. 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. We will continue to track 2021 monthly and YTD sales vs both 2020 and 2019.

Sales in all 13 channels were up vs February. 11 channels beat March 2020 $ and 12 beat March 2019 $. In YTD $ales, all channels beat 2020 and 10 were ahead of 2019. (Relevant Retail YTD Avg Annual Growth Rate since 2019 = +9.3%)

After hitting bottom in April 2020, Relevant Retail has now beaten the previous year’s $ for 11 consecutive months. The group set an all-time record of $410.9B in December and finished  2020 +$250.9B vs 2019. They have also started 2021 strong, with record sales in every month. Essential channels are still primarily responsible for the continued lift:

  • Nonstore Retailers – The biggest driver. Online shopping continues to grow in # of households and in $.
  • Food & Beverage – Grocery– Restaurant $ are improving but consumers continue to eat & drink more at home.
  • Bldg Materials/Garden/Farm– Their “Spring” lift continues unabated as consumers focus on their home.
  • SuperCtrs/Club/Value/$ Strs – They keep the GM channel positive. Value is still a major consumer priority.

Regarding the Individual Large Channels (Includes YTD Avg Annual Growth Rate since 2019)

General Merchandise Stores – Sales surged up from February producing all positive numbers overall. Department Stores $ were up vs 2020 but down vs 2019. They were having problems before the Pandemic. The growth by Club/SuperCtr/$ stores has slowed to +2.5% in March, down from +9.6% in January but these stores are still the key.

  • YTD Avg Annual Growth: All GM = +5.7%; Dept Stores = -4.3%; Club/SuprCtr/$ = +7.7%

Food and Beverage, plus Health & Personal Care Stores – Sales in Grocery were up 9.8% from February but down 16.6% from 2020 – No surprise, as March 2020 was a binge month. The Health, Personal Care group finished 2020 at +1.7%. 2021 has started even better. With a strong March, YTD they are +4.2% vs 2020 and +8.2% vs 2019.

  • YTD Avg Annual Growth: Grocery = +6.3%; Health/Drug Stores = +4.0%

Clothing and Accessories; Electronic & Appliances; Home Furnishings – March was a spectacular month for all these channels. Home Furnishings is now positive in all measurements. Electronic & Appliance had a strong March but still remains slightly below 2019 in YTD $. Clothing Stores more than doubled their 2020 $ but are still -5.4% YTD vs 2019.

  • YTD Avg Annual Growth: Clothing = -2.7%; Electronic/Appliance = -0.2%; Furniture = +8.5%

Building Material, Farm & Garden & Hardware – Their Spring lift began on time in 2020 and it has essentially never stopped. They have greatly benefited from consumers turning their focus to their home needs. They finished 2020 +53B (+13.8%). In March sales took off, +43.5% from February, +32.4% vs 2020 and +20.9% YTD. Avg Annual Growth = +13.0%

Sporting Goods, Hobby and Book Stores – Book & Hobby stores are open but Sporting Goods stores have driven the lift in this group. Consumers turned their attention to personal recreation and sales in Sporting Goods outlets took off. The group ended 2020 +5.5% vs 2019. The growth accelerated in 2021. January & February set monthly sales records, but March had the most $ of any non-December month in history, +78.2% vs 2020. YTD Avg Annual Growth = +15.1%

All Miscellaneous Stores – Pet Stores were deemed essential but most other stores were not, so closures hit this group particularly hard. Sales hit bottom at -$3.8B in April then began to rebound. They finished with a strong December and ended 2020 down $1.0B, -0.7%. January sales were +6.9% vs 2020 but February sales were down -0.01% vs 2020. In March Sales took off. They were +27.3% from February, +30.3% from March 2020. Their YTD sales are now 13.7% above 2020 and 22.1% more than 2019. It appears that their recovery has gained traction. YTD Avg Annual Growth = +10.5%

NonStore Retailers – 90% of the volume of this group comes from Internet/Mail Order/TV businesses. The COVID-19 crisis accelerated the movement to online retail. In February 2020 NonStore $ were 8.6% YTD. In December monthly sales exceeded $100B for the 1st time. They ended 2020 at +21.9%, +$173.9B. Their increase was 69% of the total $ increase for Relevant Retail Channels. Their 2020 performance far exceeded their 12.9% increase in 2019 and they started off 2021 even better. March is +30.7% vs 2020 and YTD $ are +27.8%. YTD Avg Annual Growth = +19.2%

Note: Almost without exception, online sales by brick ‘n mortar retailers are recorded with their regular store sales.

Recap – 2020 was quite a year. April & May had the 2 biggest year over year sales decreases in history while December sales broke $600B for the first time. Restaurants, Auto and Gas Stations suffered the most. Auto had recovered by yearend but Gas Stations and Restaurants were still struggling. Relevant retails had segments that also struggled but overall, they led the way for Total Spending to finish the year +0.6% vs 2019. 2021 started out even more positive, especially in March when Total Spending of $627.9B broke the record set in December – an unheard feat for March. Auto also set a spending record in March. Gas Stations $ are now all positive and YTD Restaurant $ are only slightly below 2020 and 2019. The recovery in Relevant retail has also become much more widespread and monthly sales continue to set records. We’ll see if the trends continue but the Retail economy has come back strong.

 

 

2019 Veterinary Spending was $21.80B – Where did it come from…?

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Now we will turn our attention to the final Industry Segment – Veterinary Services. For years, Veterinary Services prices have had high inflation. This has resulted in CU income becoming the most dominant factor in spending behavior and a reduction in visit frequency. Consumers paid more, just used Veterinary Services less often.

Things changed in 2017 as Veterinary pricing had an all-time record low inflation rate.  Consumers responded with a 7.2% increase in visit frequency and spent $2.5B more on Veterinary Services. In 2018 inflation began to return to more normal levels. Visit frequency fell slightly -0.2%, but Consumers spent $0.56B more (+2.7%). However, the inflation rate was 2.6% so virtually all of the lift was from increased prices. In 2019 the situation got worse. Consumers spent $0.58B (+2.7%) more but inflation was 4.14%. This means that there was an actual decrease in the amount of Veterinary Services purchased in 2019. In this report we’ll look deeper into the situation.

We’ll start with the groups who were responsible for the bulk of Veterinary spending in 2019 and the $0.58B increase. The first chart details the biggest pet Veterinary spenders for each of 10 demographic categories. It shows their share of CU’s, share of Veterinary spending and their spending performance (Share of spending/share of CU’s). We immediately note a difference in performance – 6 of 10 groups perform above 120%. This is the same as 2018 and equal to Total Pet. Supplies leads with 7 and Food & Services trail with 5. This means that these big spenders are performing well but it also signals that there is a large disparity between the best and worst performing segments. Income is clearly the biggest factor in Veterinary Spending.  The categories are presented in the order that reflects their share of Total Pet Spending which highlights the differences of the categories.

  1. Race/Ethnic – White, not Hispanic (90.9%) the same as 2018. This group accounts for the vast majority of spending in every segment., but a 91% share is extraordinary. Their 132.6% performance rating now ranks #2 in terms of importance in Veterinary Spending demographics and reflects the spending disparity. Hispanics, African Americans and Asians account for 31% of U.S. CU’s, but they only spend 9% of Vet $. Asians and African Americans have a significantly lower percentage of pet ownership and African Americans have the lowest average CU income.
  2. Housing – Homeowners (83.2%) down from (83.4%) Homeownership is a major factor in pet ownership and spending in all industry segments. In terms of importance to Veterinary spending, their 130.5% performance rating, down from 131.4%, keeps homeownership in 4th place. The slight decrease in share and performance was driven by a small $0.11B decrease in spending by Homeowners w/o Mtge and a lift by renters. We should note that Homeownership is not as important to Veterinary Spending as it once was. In 2015 their share was 88.4% with performance of 141.8%.
  3. # in CU – 2+ people (75.0%) down from (81.6%) This group, which is 70% of U.S. CUs, lost significant share and their performance fell from 115.7% to 107.4%. Their rank in terms of importance in Veterinary Spending fell from 7th to last. Only 1 & 3 person CUs spent more. Much of the big loss in share and performance was driven by  a $1.54B (+39.5%) spending increase by singles.
  4. Education – Associates Degree and Higher (73.5) down from (76.3%) Income generally increases with education. It is also important in understanding the need for regular Veterinary care. Performance also fell from 140.0% to 132.3%. Education became weaker as it fell from 2nd to 3rd in importance in Vet spending. Those with an Advanced College degree spent $1.14B more but couldn’t overcome a -$1.31B decrease from BA/BS and Associates Degrees.
  5. # Earners – “Everyone Works” (70.4%) up from (66.5%) In this group, all adults in the CU are employed. Their Performance also grew to 120.3% up from 115.1% and they joined the 120+% club, ranked #6. The gains come from a $2.13B increase from working singles and 2 Earner CUs. All other segments but No Earner, Singles spent less.
  6. Occupation – All Wage & Salaried (67.3%) up from (66.5%) and their performance only increased from 108.3% to 110.3%. The gains were small because the results were mixed. Inside the group, Managers & Professionals spent $0.59B less, while lower level White Collar and Blue Collar Workers spent $1.22B more. Outside the group, Retirees spent $0.50B more but the Self-Employed spent -$0.57B less.
  7. Income – Over $70K (66.3%) down from (68.2%) The performance of the $70K> group fell significantly from 169.2% to 159.8%. However, higher income is still the most important factor in increased Vet spending. $70K> spent -$0.03B less while <$70K spent $0.60B more. However, the results were mixed. <$30K: up $0.58B; $30>50K: -$0.19B; $50>70K: +$0.21B; $70>100K: +$0.48B; $100>150K: -$0.59B; $150>200K +$0.44B; $200K>: -$0.36B
  8. Age – 35>64 (63.2%) down from (66.1%) Their performance also fell from 124.9% to 120.7% but Age remained 5th in terms of importance. All the turmoil was within the group. 35>44 yr olds spent $1.23B more but the 45>64 yr olds spent $1.48B less. A $0.72B increase by the 65+ group also contributed to the decreases in share and performance.
  9. Area – Suburban (63.6%) up from (63.2%) Suburban CU’s are the biggest spenders in every segment. They gained a little in share and in performance, which was 114.4%, up from 113.9%. The gains were entirely due to a $1.34B increase by the large suburbs. 2019 was about population. <2500 (Urban & Rural): -$1.11B; 2500>: +$1.69B
  10. CU Composition – Married Couples (57.0%) down from (60.6%) Previously, Married Couples had a 60+% market share and 120+% performance in all segments. That ended in 2019 as their performance also fell to 116.7% from 122.2% and they dropped out of the 120+% club. Married Couples Only spent $1.04B less but those with an oldest child over 6 also were down $0.25. This, in combination with a $1.54B increase by Singles, caused the losses.

Although performance fell, Higher income is still by far the biggest single factor in Veterinary spending. We see the impact of this in many groups as it often contributes to the big spending disparity between segments. The most notable change was that Married Couples were replaced by # Earners in the 120+% performance club.

Now, we’ll look at 2019’s best and worst performing Veterinary spending segments in each category.

Almost all of the best and worst performers are those that we would expect. However, there are 11 that are different from 2018. This is much more than the (7) in Food & Services and (5) in Supplies. This suggests some spending turmoil even though there was no big change in $, up or down. The changes from 2018 are “boxed”. We should note:

  • Income – Down from the $200K> group in 2018. 1st and last are also a little closer together, 15%.
  • Earners – New, but not unexpected, winner and loser. However, the gap between the two is 32% lower in 2019.
  • Occupation – 2018: Self -Employed; 2019: Mgrs & Professionals. They are the 2 highest income segments.
  • Education – Back to the usual winner and loser but the gap between the two also narrowed slightly, 8%.
  • Age – In a surprise, the 35>44 year olds took over from the highest income group, 45>54. The loser also flipped from the oldest to the youngest, not a big surprise. By the way, only CUs in the 35>64 age range perform above 100%.
  • CU Composition – It was a good year for Married Couples with an Oldest Child over 18 and Singles. The Married group held their ground in spending but became the top performer and Singles got off the bottom.
  • # in CU – 3 and 1 person CUs were the only groups to increase Veterinary spending. Singles had the biggest lift, but they still have a long way to go. The 5+ CUs finished on the bottom for the second year in a row.
  • Region – Northeast won again – 5 straight years. The South has finished last for 4 years in a row.

It’s time to “Show you the money”. Here are segments with the biggest $ changes in Veterinary Spending.

We saw some turmoil in performance, but not here. There were 8 repeats and only 4 segments flipped from 1st to last or vice versa. Last year they had 2 repeats and 10 flips. Veterinary was the calmest segment in $ change. There were some surprise winners – Tech/Sls/Clerical, <$30K, Millennial/Gen Z and losers – Mgrs/Profess, $100>149K, 45>54. There were also surprising repeats W: 35>44 & Singles; L: Boomers & Married Couple only. Here are the specifics:

  • CU Composition – The winner and loser are both repeats.
    • Winner – Singles – Veterinary: $5.45B; Up $1.54B (+18.6%)                                       2018: Singles
    • Loser – Married, Couple Only – Veterinary: $5.73B; Down $1.04B (-7.8%)             2018: Married, Couple Only
    • Comment – Singles had another strong year while Married, Couple Only CUs had another bad one. In CUs with children, only those with an oldest child under 6 had an increase.
  • # in CU – 1 Person CUs were the repeat winner in this category too.
    • Winner – 1 Person – Veterinary Spending: $5.45B; Up $1.54B (+18.6%)                                 2018: 1 Person
    • Loser – 2 People – Veterinary Spending: $8.23B; Down $1.34B (-8.3%)                                  2018: 3 People
    • Comment: The winning numbers were 1 and 3, with a total increase of $2.04B. CUs of all other sizes spent $1.47B less. Most of the big drop by the 2 person group was driven by Married, Couple Only CUs.
  • Area Type – The winner and loser are new, but both are Suburban.
    • Winner – Suburbs 2500> – Veterinary Spending: $11.21B; Up $1.34B (+13.8%)                   2018: Central City
    • Loser – Suburbs <2500 – Veterinary Spending: $2.66B; Down $0.88B (-32.2%)                  2018: Rural
    • Comment – There was a clear spending break at a population of 2500. Those areas with a population over 2500 spent $1.69B more. Those under 2500 spent $1.11B less.
  • Age – In a bit of a surprise, the 35>44 are repeat winners.
    • Winner – 35>44 yrs – Veterinary Spending: $5.06B; Up $1.23B (+28.3%)                         2018: 35>44 yrs
    • Loser – 45>54 yrs – Veterinary Spending: $4.16B; Down $1.25B (-11.9%)                            2018: 55>64 yrs
    • Comment: The highest income group, 45>54 yr olds, are somewhat of a surprise loser. Last year, Veterinary spending by age group was up and down, a spending rollercoaster. In 2019 it was more defined. The 45>64 yr olds spent $1.48B less. All other age groups, younger and older, spent $2.06B more.
  • # Earners – Both the winner and loser are new, but not surprising.
    • Winner – 2 Earners – Veterinary Spending: $9.75B; Up $1.22B (+27.5%)                          2018: 1 Earner, Single
    • Loser – 1 Earner, 2+ CU – Veterinary Spending: $3.11B; Down $1.05B (-19.4%)              2018: No Earner, 2+ CU
    • Comment – Income is of primary importance to increased Veterinary Spending and in 2019, the number of earners took on added significance. All single CUs spent more but in 2+ person CUs, only those with 2 earners increased Veterinary spending.
  • Education – Those with an Advanced College Degree flipped from last to first.
    • Winner – Adv. College Degree – Veterinary Spending: $6.53B; Up $1.14B (+12.6%)             2018: BA/BS Degree
    • Loser – Associates Degree – Veterinary Spending: $2.10B; Down $0.66B (-8.5%)      2018: Adv. College Degree
    • Comment – Another spending rollercoaster – < HS: Up $0.23B; HS Grad: Down -$0.14B; HS Grad w/some College: Up $0.65B; Associates/BA/BS Degrees: Down -$1.31B; Advanced College Degree: Up $1.14B.
  • Occupation – A new winner and loser with the “Bosses” on the bottom.
    • Winner – Tech/Sales/Clerical – Veterinary Spending: $3.70B; Up $0.87B (+43.5%)         2018: Self-Employed
    • Loser – Mgrs & Professionals – Veterinary Spending: $7.77B; Down $0.59B (-15.0%)      2018: Retired
    • Comment – The highest income groups – Self-Employed and Mgrs & Professionals spent $1.16B less. However, the lower income groups – Retirees, Blue Collar workers and Tech/Sls/Clerical spent $1.71B more.
  • Generation – Millennials/Gen Z edge out Gen X for the win – a payback for last year?
    • Winner – Born after 1980 – Veterinary: $5.18B; Up $0.78B (+15.9%)                                 2018: Gen X
    • Loser – Baby Boomers – Veterinary: $7.48B; Down $0.72B (-17.7%)                                   2018: Baby Boomers
    • Comments – The Boomers held on to the bottom spot. This year the spending was clearly divided. The younger groups, Gen X and Millennials spent more while the older generations spent less.
  • Region – A second consecutive dual flip in this category.
    • Winner – Northeast – Veterinary Spending: $5.08B; Up $0.75B (+19.0%)                      2018: Midwest
    • Loser – Midwest – Veterinary Spending: $4.62B; Down $0.39B (-7.2%)                           2018: Northeast
    • Comment – The South finished second for the 3rd consecutive year. Only the Midwest spent less.
  • Housing – The winner and loser held their positions.
    • Winner – Homeowner w/Mtge – Veterinary: $12.45B; Up $0.55B (+10.5%)        2018: Homeowner w/Mtge
    • Loser – Homeowner w/o Mtge – Veterinary: $5.69B; Down $0.11B (-7.7%)           2018: Homeowner w/o Mtge
    • Comment – Only Homeowners w/o Mtge spent less. This decrease comes when Retirees and the over 65 group spent more. Much of it may have been driven by slightly younger CUs who have paid off their mortgage.
  • Income – In a total surprise the under $30K group flipped from last to first.
    • Winner – <$30K – Veterinary Spending: $2.37B; Up $0.58B (+13.7%)                              2018: $150K>199K
    • Loser – $100>149K – Veterinary Spending: $3.91B; Down $0.59B (-29.9%)                     2018: <$30K
    • Comment – Our final spending rollercoaster – <$30K: Up $0.58B; $30>50K: Down $0.19B; $50>99K: Up $0.69B; $100>149K: Down $0.59B; $150>199K: Up $0.44B; $200K>: Down $0.36B.
  • Race/Ethnic – White, non-Hispanics stayed on top and maintained their overwhelming dominance in this segment.
    • Winner – White, Not Hispanic – Veterinary: $19.83B; Up $0.52B (+3.8%)               2018: White, Not Hispanic
    • Loser – African American – Veterinary: $0.57B; Down $0.26B (-31.1%)                     2018: Asian Americans
    • Comment – Only African Americans spent less but this comes after a 60% increase last year. High inflation has caused a reduction in visit frequency. This has often produced big annual $ swings in low income minorities.

We’ve now seen the winners and losers in terms of increase/decrease in Veterinary Spending $ for 12 Demographic Categories. 2019 saw continued slow growth in Veterinary spending. With 8 segments holding their position from 2018 and only 4 flipping from first to last or vice versa, 2019 was much calmer than 2018. Most of the winners were not unexpected but there were some surprises like <$30K, 35>44 and Singles. The “youth movement” also continued as Gen X and Millennials both spent more.  However, there were also “hidden” segments that didn’t win but made a significant contribution to the 2019 spending increase. These groups don’t win an award, but they certainly deserve….

HONORABLE MENTION

Married CUs with an oldest child <6 were the only CU with kids to spend more. Spending became more balanced in Education & Income which is reflected by the performance of HS Grads w/some College and the $70>99K groups. It wasn’t just the younger groups who spent more. The 75+ yr olds were up $0.39B (+35.2%). All the lower income occupations spent significantly more on Veterinary Services, including Blue Collar Workers, +$0.35B (+12.3%). Hispanics bounced back with a 27% increase after a 19% drop in 2018. 57% of 96 demographic segments spent more, down slightly from 63% last year.

Summary

2016 and 2017 produced a combined increase of $3.6B in Veterinary Spending as inflation moved to record low levels. In 2018 we had the Baby Boomer Spending “Bust” which especially impacted Food and Veterinary. The Boomers spending continued to fall in 2019. Fortunately, Gen X and Millennials stepped up to produce a small. 2.7% increase in both years. Overall, Veterinary Spending became a little more balanced in Income, Age, Education and the size and makeup of CUs.

Veterinary spending did become a little more balanced in terms of Income and Education, but these 2 categories are still of primary importance in terms of increased spending, Both had an up and down rollercoaster spending pattern between segments. Let’s look at the final result. To compare groups, we will look at performance. (Share Vet $/Share CUs)

Income: Performance increases with income and reaches the “break even” point (100%) at $70K+. CU’s over $70K (41.5%) account for 66.3% of Veterinary $. Performance =  159.8%. Performance for <$70K = 57.6%. That’s a difference of 100.2%. Spending may be more balanced but that is still a huge disparity.

Higher Education: Performance increases with Education but doesn’t reach 100% until you have a BA/BS degree. College Grads, 44.4% of CUs, account for 63.9% of Veterinary $. Performance = 144.1%. Performance for <College Grads= 64.8%. The difference is 79.3%. The disparity is not as bad as Income but still huge. Equality in both categories is a long way off.

The performance of other big spending groups is also very important in the Veterinary segment. We identified six demographic categories with high performing large groups. (There were 7 for Supplies, 5 for Services and Food).  Consumers have no control over Race/Ethnicity or Age but in addition to Income and Education, Homeownership and # Earners are also important factors in Veterinary spending. Actually, all 6 of these groups are tied to income and their high performance demonstrates that there are still big spending disparities among segments within these categories.

There were some changes of note. Marriage lost ground as Singles increased their spending and # Earners became significantly more important, which relates to both income and the strong performance by the younger generations.

2019 saw another small spending increase (+2.7%) for Veterinary Services. 57% of all segments increased spending but with a 4.14% inflation rate, the amount of Veterinary Services actually decreased . The lift was again driven by Gen Xers and Millennials which was reflected in the strong performance of segments like Singles, Tech/Sls/Clerical, 2 Earners and 35>44 yr olds. While spending became a little more balanced, the importance of income to spending in this segment was still very apparent. That brings us to 2020. The COVID-19 pandemic has had the greatest negative impact on lower income groups. We’ll see if that works to increase the Income disparity in Veterinary Spending.

Finally – The “Ultimate” Veterinary Services Spending Consumer Unit consists of 3 people – a married couple and their 18 yr old child. They are at the top of the 35 to 44 age range. They are White, but not of Hispanic origin. At least one of them has an Adv. College Degree. Both are Mgrs/Professionals and their total income is $150>$200K. They live in a small suburb, adjacent to a big city in the Northeastern U.S. and are still paying off the mortgage on their home.