Retail Channel Monthly $ Update – December Final & January Advance

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By 2021, the market had generally recovered from the impact of the pandemic. In 2022, we were hit by extreme inflation, with rates higher than we have seen in 40 years. Obviously, this can affect retail sales, so we’ll continue to track the retail market with data from two reports provided by the Census Bureau and factor in the CPI from US BLS.

The Census Bureau Reports are the Monthly and the Advance Retail Sales Reports. 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 begin with the Final Report for December and then go to the Advance Report for January. Our focus is comparing to last year but also 2019. We’ll show both actual and the “real” change in $ as we factor inflation into the data.

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 a year ago
    • Current Month Real change – % vs same month in a year ago factoring in inflation
  • Current Annual change – % & $ for 2022 vs 2021. January 2023 will be compared to 2022 & 2021
    • Current Annual Real change % for 2022 vs 2021. January 2023 will show real change vs 2022 & 2021
  • Current Annual change 2022 vs 2019 – % & $. January 2023 will also be compared to January 2019.
    • Current Annual Real change 2022 vs 2019 – % factoring in inflation. Real Change also for January 2023 vs 2019.
  • Monthly & Annual $ & CPIs which are targeted by channel will also be shown. (Details are at the end of the report)

First, the December Final. All but Gas Stations were up from last month and all were up for December & Y/E vs 2021. Considering inflation, only Relevant Retail was down for the month but for year-end numbers, only Restaurants were up. Here is the December data for the major retail groups. (All $ are Actual, Not Seasonally Adjusted)

The December Final is $1.2B less than the Advance. Restaurants had the only positive: +$1.2B; : Auto: -1.2B; Gas Stations: -$0.3B; Relevant Retail: -$0.8B. Sales are up from last month and consumers continue to spend more vs 2021. However, the “real” numbers vs 2021 tell a slightly different story. All but Relevant Retail are really up for the month but only Restaurants are really up year-end vs 2021. Auto & Gas Stations also finished 2022 really down vs 2019. The inflation impact on Relevant Retail is concerning. Their Real YTD $ales vs 2021 were negative for 9 straight months and they finished -$1.2%. They do have the best performance since 2019 as 59.7% of their 31.8% growth is “Real”.

Now, let’s see how some Key Pet Relevant channels did in December

Overall– 10 of 11 were up from November. Vs Dec 2021, 9 reported more $ but only 2 were really up. In Y/E vs 2021, 10 had increases but only 3 were real. Vs 2019, Disc Dept Stores are again the only real negative. In Sep/Oct all were up.

  • Building Material Stores – Sales are down vs Nov for Home Ctr/Hdwe, but up 6.6% Y/E vs 21. Farm stores are +5.4% vs Nov but +7.5% vs Dec 2021. Y/E sales are +6.1%. The Bldg/Matl group had a Y/E (annual) inflation rate of 10.9% which has produced negative real numbers. The pandemic caused consumers to focus on their homes which has produced sales growth of 36.5% since 2019. Importantly, 54% of this lift was real, primarily because the bulk of the lift came from 20>21, prior to the inflation wave. Avg Growth Rate: HomeCtr/Hdwe: 10.8%, Real: 6.0%; Farm: 12.3%, Real: 7.7%
  • Food & Drug – Both channels are truly essential. Except for the pandemic food binge buying, they tend to have smaller fluctuations in $. However, they are radically different in inflation. The Y/E rate for Grocery products is 4 times higher than for Drugs/Med products. Drug Store $ are up from November but really negative vs 2021. However, 88% of their growth since 2019 is real. The Real Sales for Supermarkets are down for the month & Y/E. Also, only 14% of their growth since 2019 is real. Avg Growth Rate: Supermarkets: +7.0%, Real: +1.0%; Drug Stores: +4.9%, Real: +4.4%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 39.8% from November and up vs 2021. Y/E sales are 1.7% above 2021. Their current inflation rate is 3.5% which is down from 7.5% in April but Y/E it is 5.4%. It was even higher in 20>21, +6.5%. However, 72% of their 48% lift since 2019 is real. Their Avg Growth Rate was: +14.0%; Real: +10.4%.
  • Gen Mdse Stores – All channels were up from November and only Discount Dept Stores were down for the month and Y/E vs 2021. All real numbers for all channels monthly and Y/E vs 2021 are negative. Disc. Dept Stores were hurting before COVID and their Y/E sales are “really” down vs 2019. The other channels have 36% real growth. Avg Growth Rate: SupCtr/Club: 5.9%, Real: 2.0%; $/Value Strs: +7.9%, Real: +4.2%; Disc. Dept.: +2.3%, Real: -0.5%
  • Office, Gift & Souvenir Stores – Their recovery didn’t start until the spring of 2021. Sales are up 41% from November and their 2022 sales growth has been strong enough to make them positive in all measurements vs 2021 & 2019. They have made remarkable progress. Avg Growth Rate: +3.5%, Real: +0.8%
  • Internet/Mail Order – Sales are up 7.2% from November and set a new all-time record. They are positive for all other measurements, but their Y/E growth rate is only 55% of their average since 2019. However, 89% of their 75.8% growth since 2019 is real. Avg Growth Rates: +20.7%, Real: +18.7%. As expected, they are by far the growth leaders since 2019.
  • A/O Miscellaneous – This is a group of specialty retailers. Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level in 2021 as annual sales reached $100B for the first time. Their sales dipped in January, July, Sept>Nov, then rose in December but were really down vs Dec 21. 2022. Y/E measurements are very positive and they are by far the $ increase leaders over 2021. Plus, 85% of their 55.5% growth since 2019 is real. Average Growth Rate is: +15.8%, Real: +13.7%. They are 2nd in growth since 2019 to the internet. I’m sure Pet Stores are helping.

There is no doubt that high inflation is an important factor in Retail. In actual $, 9 channels reported increases in monthly $ and 10 in Y/E $ over 2021. When you factor in inflation, the number with any “real” growth falls to 2 for monthly & 3 for Y/E. This is a clear indication of the ongoing strong impact of inflation at the retail channel level. Recent data indicates that Inflation again slowed a little. Let’s look at the impact on the Advance Retail $ales for January.

We have had memorable times since 2019, including the 2 biggest monthly drops in history but a lot of positives in the Pandemic recovery. Total Retail reached $700B in a month for the first time and broke the $7T barrier in 2021. Relevant Retail was also strong as annual sales reached $4T in 2021 and all big groups set annual $ales records. In 2022 radical inflation was a big factor with the largest increase in 40 years. At first this reduces the amount of product sold but not $ spent. Total Retail hit $8T and all groups again set new annual records in 2022. As expected, all groups were down from December, but all were up vs January 2022. Plus, in the amount of product sold, only Relevant Retail was down vs 2022 but Auto & Gas Stations were down vs 2021. Gas Stations are also still really down vs 2019.

Overall – Inflation Reality January inflation vs 2022 fell below the $ increase rate for all but Relevant Retail. However, you see the impact of 2022 inflation as real sales are down for Gas Stations and Auto vs 2021 and only minimally up for Relevant & Total Retail. Restaurants were down vs Dec, but up strongly in all measurements vs 2022, 2021 & 2019. There is a slight positive. For the 1st time in 9 months real sales vs 2021 are up vs 2021 for Total & Relevant Retail.

Total Retail – Every month since June 2020 has set a monthly sales record. December 2022 $ were $748.2B, a new all-time record. 2022 was somewhat normal as sales dipped in September then grew in Oct>Dec before falling in January. January $ are -16.2% vs December, +6.2%% vs Jan 2022, +21.0% vs 2021 & +37.6% vs 2019. However, when you factor in inflation, only 43% of 19>23 sales growth is real but that’s better than 22>23: 33% and 21>23: 17%. Avg 2019>23 Growth: +8.3%, Real: +3.8%. Even as inflation slows, it continues to have a cumulative impact.

Restaurants – They were hit hard by the pandemic and didn’t truly start to recover until March 2021. However, they reached a record $876B in 2021. Sales continued to grow in 2022, setting an all-time monthly record of $90.8B in October and exceeding $1T in 2022 for the 1st time. They are the only big group that is positive in all measurements vs 2022, 2021 & 2019. Inflation slowed to 8.1% for January from 8.2% last month. However, it is still 14.9% vs 2021 and 19.6% vs 2019. 62.8% of their 52.8% growth since 2019 is real. Avg 2019>23 Growth: +11.2%, Real: +7.4%. They only account for 13.8% of Total Retail $ales, but their performance helps to improve the overall retail numbers.

Auto (Motor Vehicle & Parts Dealers) – This group actively worked to overcome the stay-at-home attitude with great deals and a lot of advertising. They finished 2020 up 1% vs 2019 and hit a record $1.48T in 2021. In 2022 sales got on a rollercoaster – Jan down, Feb/Mar up, Apr>May down, then flipping monthly with January being down. They had 4 down months in actual sales which are the only reported sales negatives by any big group in 2021>2022. This is bad but their real Y/E sales numbers were much worse, down -8.2% vs 2021, the worst of any group. 2023 has started off a little better. Sales are up vs 2022, 2021 & 2019. Plus, real sales are only down vs 2021. Avg 2019>23 Growth: +7.3%, Real: +1.7%. Prices have deflated for 2 straight months. Real Sales vs 2019 are positive for the 1st time since April 2022.

Gas Stations – Gas Stations were also hit hard. If you stay home, you drive less and need less gas. This group started recovery in March 2021 and reached a record $584B in 2022. Sales got on a rollercoaster in 2022 but have trended down Nov>Jan. They have fallen to 2nd place behind restaurants with the biggest increases vs 2022, 2021 and 2019 but it is still not reality. Gasoline inflation has slowed. However, it is still 42.7% vs 2021. Monthly real sales are again positive, but sales are still really down -3.2% vs 2021 and -5.4% vs 2019. Avg 2019>23 Growth: +9.0%, Real: -1.4%. The numbers show the cumulative impact of inflation. Consumers spend more but buy less, even less than they bought 4 years ago.

Relevant Retail – Less Auto, Gas and Restaurants – This group accounts for 60+% of Total Retail $. It has a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020. They finished 2020, up +7.1% and 2021 got even better as they reached a record $4.50T. They have led the way in Total Retail’s recovery which became widespread across the channels. Sales went on an up/down roller coaster in 2022. However, all months in 2022 set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. January had its normal drop, but real sales were also down vs 2022 and only 7% of the 21>23 growth is real. From 2019>23 sales grew 35.6% and 55% was real. This shows that inflation is a cumulative problem that began in 2022. Their Avg 2019>23 Growth: +7.9%, Real: +4.6%. The performance of this huge group is critically important. This is where America shops. Real sales are down 2.1% so consumers bought less than in 2022. They just paid more. That’s not good.

Inflation is slowing slightly but the cumulative impact is still there. Relevant Retail is now really down vs last year for 11 straight months. All other groups are up. However, when you check the real growth vs 2021, Auto & Gas Stations are still “really down” and Total & Relevant Retail have negligible real growth. Restaurants are by far the best performers. For Relevant Retail, we are still in Inflation Phase II. Consumer spending grows but the amount bought declines. Let’s hope that we can continue to avoid Phase III, when consumer spending drops.

Here’s a more detailed look at January by Key Channels

  • Relevant Retail: Avg Growth Rate: +7.9%, Real: +4.6%. All 11 channels were down from December but 10 were up vs 2022 & 2021. 7 were really up vs 2022 & 6 vs 2021. The negative impact of inflation is less but still there in the real data.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. They are down 47% from December but up vs January 2022 & 2021 & 2019. However, they are really down vs 2022 & 2019. Avg 2019>23 Growth: +1.1%, Real: -1.4%.
  • Club/SuprCtr/$ – They fueled a big part of the overall recovery because they focus on value which has broad consumer appeal. Inflation is still a big factor in their numbers. Sales are down from December but up vs 22 & 21. Their real sales are all down vs 22 & 21 and only 38% of their 25.4% lift from 2019 is real. Avg 19>23 Growth: +5.8%, Real: +2.3%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Inflation has hit them hard. $ are down from December. The increases vs 22 & 21 are strong, but inflation is stronger. Real sales are down for both and only 2.4% of the growth since 2019 is real. Avg Growth: +5.8%, Real: +0.2%.
  • Health/Drug Stores – Many stores in this group are essential, but consumers visit far less frequently than Grocery stores. Sales are down from December but are up in all other measurements vs 22, 21 & 19. Their inflation rate is low so 76% of their 17.7% growth from 2019 is real. Avg 2019>23 Growth: +4.2%, Real: +3.2%.
  • Clothing and Accessories – They were nonessential, and clothes mattered less when you stayed home. That changed in March 21 with strong growth through 22, especially December. January sales fell -52.5% but for the 2nd straight month all other all measurements are positive. 76% of their 2019>23 growth is real. Avg 2019>23 Growth: +4.4%, Real:+3.4%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation has slowed but was very high in 2022. Sales are down from December but up vs 22, 21 & 19. However, their real numbers are still down vs 2021 and only 18% of their growth since 2019 is real. Avg 2019>23 Growth: +5.3%, Real: +1.0%.
  • Electronic & Appliances – This channel has many problems. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 2021. Sales are down in all measurements but real sales vs 2022. This only happened because of an 8.0% deflation rate from 22>23. Avg 2019>23 Growth: -3.3%, Real: -1.6%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. The 2022 spring lift ended in May. Sales fell in Nov>Jan after a slight lift in October. Sales are up vs 22, 21 & 19, but when you factor in double-digit inflation, the real amount sold is down vs 22 & 21. Also, only 22% of their strong 30.5% sales growth since 2019 is real. In December 2022, it was 54%. Their Avg 2019>23 Growth is: +6.9%, Real: +1.6%.
  • Sporting Goods, Hobby and Book Stores – Consumers turned their attention to recreation and Sporting Goods stores sales took off. Book & Hobby Stores recovered more slowly. January $ fell -42.4% from December but are now positive in all other measurements. Inflation in this group is lower than most groups and most comes from Sporting Goods. 77% of their 39.0% growth since 2019 is real. Avg 2019>23 Growth: +8.6%, Real: +6.8%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 +0.9% but sales took off in March 21 and have continued to grow. Sales are -18.6% from December but up for all other measurements. In 2022 they had the biggest increase vs 2021 and vs 2019 they were 2nd only to NonStore. In 2023 they are 3rd vs 2022 but 77% of their 45.2% growth since 2019 is real. Their Avg Growth is: +9.8%, Real: +7.8%.
  • NonStore Retailers – 90% of their volume comes from Internet/Mail Order/TV. The pandemic accelerated online spending. They ended 2020 +21.4%. The growth continued in 2021 as sales exceeded $100B for the 1st time and they broke the $1 Trillion barrier for the year. Their growth slowed significantly in 2022 and now 2023 but all measurements vs 22, 21 & 19 are positive. 87% of their 81.2% increase since 2019 is real. Their Avg Growth: +16.0%, Real: +14.3%.

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

Recap – The Retail recovery from the pandemic was largely driven by Relevant Retail and by the end of 2021 it had become very widespread. In 2022, there was a new challenge, the worst inflation in 40 years. Overall, and in most product categories it has slowed in Jul>Jan. On the surface, the Retail impact is almost invisible. Sales in the total market and in the Relevant Retail group set new records in 2022 but the growth rate slowed and the amount purchased fell, Phase II of strong inflation. December was again the peak of the Holiday Shopping season and monthly sales. As expected, sales fell across the board in January. Except for Relevant Retail the amount of product sold by the big groups in January was more than in 2022. This was not widespread among the individual retail channels. It was largely due to the biggest channels – Grocery, General Merchandise and Bldg/Hdwe/Farm. While inflation has slowed in most product categories, it is still very high for Food at Home and Tools/Hdwe. This had a big impact on real sales in specific channels and Relevant Retail, which has now been “really” negative vs last year for 11 straight months. Will this continue?

Finally, here are the details and updated inflation rates for the CPIs used to calculate the impact of inflation on retail groups and channels. This includes special aggregate CPIs created with the instruction and guidance of personnel from the US BLS. I also researched data from the last Economic Census to review the share of sales by product category for the various channels to help in selecting what expenditures to include in specific aggregates. Of course, none of these specially created aggregates are 100% accurate but they are much closer than the overall CPI or available aggregates.

Monthly CPI changes of 0.2% or more are highlighted. (Green = lower; Pink = higher)

I’m sure that this list raises some questions. Here are some answers to some of the more obvious ones.

  1. Why is the group for Non-store different from the Internet?
    1. Non-store is not all internet. It also includes Fuel Oil Dealers, the non-motor fuel Energy Commodity.
  2. Why is there no Food at home included in Non-store or Internet?
    1. Online Grocery purchasing is becoming popular but almost all is from companies whose major business is brick ‘n mortar. These online sales are recorded under their primary channel.
  3. 6 Channels have the same CPI aggregate but represent a variety of business types.
    1. They also have a wide range of product types. Rather than try to build aggregates of a multitude of small expenditure categories, it seemed better to eliminate the biggest, influential groups that they don’t sell. This method is not perfect, but it is certainly closer than any existing aggregate.
  4. Why are Grocery and Supermarkets only tied to the Grocery CPI?
    1. According to the Economic Census, 76% of their sales comes from Grocery products. Grocery Products are the driver. The balance of their sales comes from a collection of a multitude of categories.
  5. What about Drug/Health Stores only being tied to Medical Commodities.
    1. An answer similar to the one for Grocery/Supermarkets. However, in this case Medical Commodities account for over 80% of these stores’ total sales.
  6. Why do SuperCtrs/Clubs and $ Stores have the same CPI?
    1. While the Big Stores sell much more fresh groceries, Groceries account for ¼ of $ Store sales. Both Channels generally offer most of the same product categories, but the actual product mix is different.

GLOBAL PET EXPO 2023…It Has Everything You Need!

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Global Pet Expo, the Pet Industry’s premiere event, is back to near “normal”. The exhibitor count is up over 35% from 2022 and should reach 1000 by showtime. This is lower than the 1173 peak in 2019 but it is still more than enough.

The world is rapidly becoming more virtual so how important is a live event? In the Pet Industry it is critical because of our attitude towards Pets and Pet Products. Pets became an integral part of our families in the 90’s as Pet Owners became Pet Parents. This relationship has grown even stronger in recent years as we now increasingly personify our pets. This is why a live show is important. Pet shows are primarily focused on Pet Products. Studies have shown that over 60% of consumers prefer to make initial buying decisions on Pet Products in person. This makes Pet Products second only to fresh groceries in this consumer behavior. This preference applies to all Pet Products buyers, not just consumers. The retailers and distributors attending GPE and SuperZoo want to see and touch a new product before they buy. Live shows are not just important, they are critical to the continued growth and strength of the Pet Industry.

The Pandemic crisis is basically over but it has raised our awareness so we are more conscious of health concerns and responsible personal interactions. These personal interactions at industry trade shows have been a key factor in the long term growth of the industry. In 2023 they will be back at full strength. Now, let’s take a brief look at what awaits attendees of GPE 2023.

As we said, the show is smaller than the 2019 peak, both in square footage (-13%) and number of exhibitors (-16%) but there is still more than enough to satisfy the needs and wants of every buyer that attends. Here are some relevant facts.

  • 984+ Booths – as of 2/17 but more are still being added daily
  • 314,000+ sq ft of exhibit booth space (Not counting the 45,000 sq ft new product area)
  • 20 x 10 is again the most popular size – 253 (35.9%), demonstrating the need for a little more space.
  • Booths are smaller – the average size is 320 sq ft, -16% from 2022, reflecting the 35+% increase in exhibitors.
  • Size matters – Booths 300 to 800 sq ft (29%) occupy 45% of the space. Those over 1000 sq ft (4%) cover 23%.

Will you see any new exhibitors or is it the usual group? There have been 6 live pet trade shows from 2019>22 – 3 GPEs and 3 SZs. There are 984 exhibitors at GPE 23 but It took 2725 companies to fill all 7 shows. Of the GPE 2023 exhibitors:

  • 179 (18%) – Did all 6 other shows
  • 531 (54%) – Did GPE 2022
  • 298 (30%) – Are new to GPE (at least from 2019>22)
  • 222 (23%) – Did NO other shows from 2019>2022

The percentage of exhibitors new to GPE this year is about the same as “normal”. There is again plenty of “New” to see.

Special “Floor Sections” at GPE account for 33% of Booths, about the same as 2019>20. Due to the big change in booth count, the best way to compare GPE 2023 to previous years in this and other areas may be by share of booths.

  • Natural – 193 Booths. The number of booths in this section is at an all-time high. The share has grown to 1/5 of all booths from 1/7 in 2019, reflecting the growing strength of the natural trend in our whole society.
  • Boutique – 25 Booths. After a brief resurgence in 2020, the booth share of this area continues to fall. Boutique is essentially the opposite of Natural and more discretionary in a country that is increasingly focused on “needs”.
  • Aquatic – 16 Booths. Popularity of this category continues to trend down.
  • 1st Time Exhibitors – 95 Booths. The share is now about the same as pre-pandemic 2019 but most of the 287 exhibitors who didn’t exhibit at GPE (at least from 2019>2022) chose the regular floor or another special section. GPE is a “must do” for new companies and New – products and companies are a major focus of GPE.
  • International – Although not listed as floor sections, international pavilions are back this year with China, Taiwan, Canada and Brazil participating. There are 230+ exhibitors from 25 countries outside the U.S at GPE 23.

There are large numbers of exhibitors in the “regular” floor space who would qualify for inclusion in these sections. You need to “work” the whole show to ensure that you get a full view of the product categories of interest to you. I will again be creating a GPE Exhibitor Visit Planner that allows attendees to plan their floor time by targeting the exhibitors with products of interest. The GPE 2023 SuperSearch will be made available by March 6th and be regularly updated with last minute changes. Now, let’s take a look at the results from this year’s research on exhibitors’ product offerings.

First, we’ll Compare Exhibitor Types – By function: By Animal type (Numbers are based on assigned booths as of 2/17/23)

Results were mixed. 5 categories gained share while 6 lost ground.

  • Dogs Still Rule – They are still in about 83% of all booths. 5 out of every 6 booths are selling dog products.
  • Cats gained ground. Cat Products are offered by 59% of exhibitors. Up from 40% back in 2014.
  • Fish/Aquatic – This category continues to lose share and is down 47% since 2017.
  • Other Animals – Only Birds gained share, with the biggest drop coming in Equine.
  • Business Services – Inflation has driven the popularity of private label/OEM products. The huge lift in count and share reflects the changing needs in the industry. BTW, there were only 8 exhibitors in 2014.
  • Distributors – The share is about the same as “normal” 2019. Only 8 exhibited in 2014.
  • Gift/Gen Mdse – The share had a slight lift but has been generally declining since peaking at 7.8% in 2016.

Dogs and Cats are the undisputed royalty of Pet. Because of their huge impact on the industry. I have divided the products designed for them into 33 subcategories. Let’s see how this year’s GPE Top Ten (by booth count) are doing.

The top 4 are the same as 2022 but the top 2 had the biggest losses in share. There was a slight shuffling in the rankings from 5>10 – 2 moved up in rank while Food fell. Carriers/Crates returned to the Top 10 as Apparel fell to #11.

  • Treats are still #1 although their share fell by over 7%. The high share in 2022 reflects their priority. 1 in 3 booths offers treats. Many supplements are in treat form and the share of this category is still up 5+% from 2019.
  • OTC Meds/Supplements/Devices has a similar pattern to Treats and also continues to grow in importance. In 2014, their share was only 11%.
  • Toys – With a big gain in share, Toys held onto #3. This relates to the return of many Far East exhibitors.
  • Collars, Leads & Harnesses – They held the #4 spot and their share has been stable since 2019 after falling from 22.1% in 2018. In 2016, they also had a 22.1% share but that earned them the #2 ranking.
  • Feeding Acc. had the biggest share gain and moved to 5th which again reflects the increase in foreign exhibitors.
  • Beds/Mats – Their share declined in 20>22 but rebounded in 2023 with the influx of Far East exhibitors.
  • Food remains a priority as Pet Parents focus on nutrition, health and wellness. However, almost all is USA made.
  • Waste Pickup – They have been growing in popularity. They broke into the Top 10 in 2020 and now rank 8th.
  • Carriers/Crates – They dropped out of the top 10 in 2022. Once again the lack of foreign manufacturers was a big factor. In 2023 they returned to their normal #9 with a record high share.
  • Grooming Tools– After years at 9/10, they fell to #12 in 2020 but have returned to their normal #10 spot.

Pet Parents’ concern for the overall health and wellness of their “pet children” remains a big priority but the impact of strong Petflation has pushed the “value” of Private Label products to the forefront in many categories.

The last chart details the specifics for all 33 of the Dog/Cat product categories that I defined. Of note: All the data inputs for this report and the SuperSearch tool come from a review of the GPE online exhibitor product listings AND visits to over 1000 websites. They’re not 100% accurate, but pretty close. Which categories are of interest to your business?

GPE 2023 is the place to literally find “Everything you need!” There are products, services and education to fulfill every need and…want. There is also an abundance of “new” – both in products and the 200+ exhibitors who are new to Pet Industry shows. However, to reap the benefits, you need a plan. Exhibitors must showcase the “right” items. Attendees need to strategically analyze their data, determine what they need to improve their business and develop a plan to find the products to fulfill their needs. Then…execute the plan. If they do nothing else at GPE, attendees will have 1 minute and 28 seconds to spend at each booth. With a 35+% increase in the number of exhibitors, you definitely need a plan! The GPE 2023 SuperSearch will be available the week of March 6th. It can help. Try it out. Good luck in Orlando!

Since no Exhibitor list is available on line, you can download one by clicking the link below. It is in an excel format and is based upon data from 6 pm EST on 2/17.

Download GPE 2023 Exhibitor List 2-17

Petflation 2023 – January Update: Price increase slows to +10.6% vs 2022

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Inflation continues to make headlines. The YOY increases in the monthly Consumer Price Index (CPI) are larger than we have seen in decades but are slowing a little. January prices grew 0.8% from December and the CPI was still up +6.4% vs 2022, but down from +6.5% last month. The grocery price surge also slowed but they’re still up 11.3% over 2022. That’s 11 straight months of double-digit YOY monthly percentage increases. These are the first 10+% increases since 1981. As we have seen in recent years, even minor price changes can affect consumer pet spending, especially in the discretionary pet segments, so we will continue to publish monthly reports to track petflation as it evolves in the market.

Total Pet prices were 4.1% higher in December 2021 than in December 2020, while the overall CPI was up 7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 2022. National inflation has slowed since July, but Petflation has generally increased. It passed the National CPI in July and is +10.6% in January, 65.6% higher than the national rate of 6.4%. We will look deeper into the numbers. This and future reports will include:

  • A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
  • Monthly comparisons of 23 vs 22 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month
    2. Inflation changes for recent years (22>21, 20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2023 vs 2019 and now vs 2021 to see the full inflation surge
    4. Average annual Year Over Year inflation rate from 2019 to 2023
  • Since January data is YTD, we won’t have separate YTD data until next month. It will include:
    1. YTD numbers for the monthly comparisons #2>4 above

In our first graph we will track the monthly change in prices for the 24 months from January 2021 to January 2023. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus yearend and those from 12 and 24 months earlier are included. For all but Supplies, cumulative inflation peaked in January. I have added and highlighted the month that Supplies peaked. This will give you some key waypoints.

The pandemic hit home in 2020. In January 21, the national CPI was only +1.8% and Pet prices were +1.2%. Veterinary and Services prices generally inflated after mid-2020, similar to the overall CPI while Food and Supplies prices generally deflated until late 2021. After that time, Petflation took off. Pet Food prices consistently increased but the other segments had mixed patterns until July 2022, when all increased. In August>October Petflation accelerated, except for a small October dip in Veterinary. In Nov>Dec, Services & Food prices continued to grow while Veterinary & Supplies prices stabilized. In January, all inflated and Total Petflation since Dec 2019 has been above the U.S. CPI since November.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul>Dec 2022. Prices turned up again in January but 41% of the overall 16.4% increase since 2019 happened from January>June 2022.
  • Pet Food – Prices stayed generally below December 2019 levels from April 2020 to September 2021, when they turned up. There was a sharp increase in December 2021 but 89% of the 17.3% increase occurred in 2022.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022. They turned up in January and hit an all-time high, beating the 2009 record. They plateaued from Feb> May, turned up in June, flattened in July, then turned up in Aug>Oct to a new record high. Prices stabilized in Nov>Dec but turned up again in January.
  • Pet Services – Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in Mar>June. It has turned up again July>Jan and passed Food for 2nd place among Pet Industry Segments.
  • Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December 2021 which put them above the overall CPI. In May 2022 prices fell and stabilized in June causing them to briefly fall below the National CPI. However, prices turned up again and despite Oct & Dec dips they have stayed above the National CPI since July and hit a new record in January.
  • Total Pet – The blending of patterns made Total Pet appear calm. In December 2021 the pricing surge began. In Mar>June 2022 the segments had ups & downs but Petflation grew again from Jul>Nov. It slowed in December then turned up again in January as all segments increased prices. It has been ahead of the cumulative U.S. CPI on our 2019>2023 chart since November.

Next, we’ll turn our attention to the Year over Year inflation rate change for January and compare it to last month, last year and to previous years. We also added a new measurement, showing the total inflation from 2021 to 2023. Although inflation is slowing, it’s not over. This will allow you to see the cumulative amount of the current pricing surge. You can compare the annual inflation rates of 22>23 to 21>22 but also see how much of the total inflation since 2019 came from the ongoing trauma. Again, we’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were +0.8% vs December and were up 6.4% vs January 2022. The Grocery increase is down to 11.3% but is still a big negative. January prices generally rise from December so it’s not surprising that 8 of 9 categories had increased prices from last month. 5 of the increases were over 0.5%. Last month there was only 1. 2 of the increases were over 1.0% and the Pet Industry again led the way – Pet Services +1.5% and Veterinary Services +1.0%. The overall national YOY monthly inflation rate is slightly down from December but it is significantly down vs the 21>22 rate. No other category has that pattern. The 22>23 inflation rate is higher than the 21>22 rate in all other categories. In all but 2 – Medical Services and Haircuts/Personal Services, it is the highest rate in any year since 2019. In our new 21>23 measurement you also can see that over 75% of the cumulative inflation since 2019 occurred in the current surge for all categories but Veterinary, Medical Services and Haircuts & Personal Services. The Pet Supplies Segment has a very interesting situation. The 21>23 inflation surge provided 113% of the overall inflation since 2019. This happened because Pet Supplies prices strongly deflated in 20>21.

Now Some Specific Observations

  • U.S. CPI– Prices are +0.8% from December. The YOY increase is down to +6.4%. It peaked at +9.1% back in June. The targeted inflation rate is <2% so we are still over 3 times higher than the target. However, a 7th straight slight decline is good news. It is also good that the current inflation rate is below 21>22 but the 21>23 rate is 14.4%, 76% of total inflation since 2019. How many households “broke even” by increasing their income by over 14% in 2 years?
  • Pet Food– Prices are +0.2% vs December and 15.1% vs January 2022. They are also 34% higher than the Food at Home inflation rate – not good news! The YOY increase is being measured against a time when prices were only 1.9% above the 2019 level, but that increase is still an incredible 12.5 times the pre-pandemic 1.2% increase from 2018 to 2019. The 2021>2023 inflation surge generated 88% of the total 20.7% inflation since 2019.
  • Food at Home – Prices are up 8% from December. The monthly YOY increase is 11.3%, down slightly from 11.8% in December but considerably lower than Jul>Sep 2022 when it exceeded 13%. The 24.9% Inflation for this category since 2019 is the highest on the chart and is 32% more than the national CPI. 79% of their inflation since 2019 occurred from 2021>2023 but their pattern is different from the national CPI. Grocery prices began inflating in 2020>2021 then the rate accelerated. It appears that the pandemic supply chain issues in Food which contributed to higher prices started early and foreshadowed problems in other categories and the overall CPI tsunami.
  • Pets & Supplies – Prices are up +0.4% from December. That’s 2 straight monthly increases after a dip in November. They still have the lowest increase since 2019 and now have fallen to last place in terms of the monthly increase vs last year for Pet Segments. As we noted earlier, prices deflated in 2020>2021 so the 2021>2023 inflation surge accounted for 100+% of the total price increase since 2019. They reached an all-time high in October then prices deflated. However, 2 straight months of increases has put them within 0.4% of the record high.
  • Veterinary Services – January prices are +1.0% from They are +8.4% from 2022 and are tied with Services for 2nd place behind Food in the Pet Industry. They also remain 2nd in the increase since 2019 with 24.5% compared to Food at home at 24.9%. For Veterinary Services, relatively high annual inflation is the norm. The rate did increase during the current surge but only 57% of the 4 years’ worth of inflation occurred in the 2 years from 2021>2023.
  • Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 20>21. In January prices fell -0.1% from December but were +3.0% vs 2022, the 2nd highest rate since 2019. Medical Prices are not a big part of the current surge as only 40% of the 2019>23 increase happened from 21>23.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021/2022. January prices were up +1.5% from December, the biggest increase on the chart, and +8.4% vs 2021, a new rate record and an all-time pricing high. Their inflation is tied to the current surge as 72% of total since 2019 occurred from 2021>2023.
  • Haircuts & Other Personal Services – Prices are +0.2% from December and +5.2% from 2022, but this is only 2nd to +5.7% in 20>21. Inflation began to grow in 20>21 and 50% of the inflation from 19>23 happened from 21>23.
  • Total Pet– Petflation is strong, 2.4 times the rate of last year, 65.6% ahead of the National CPI and the +10.6% is also the highest January rate in history. Prices increased in all segments vs December so Total Pet was up 0.8%, which is actually the norm. A Dec>Jan increase in Petflation has happened in 25 of the last 26 years. Food is the runaway leader, but inflation is becoming more balanced as all other segments have aa YOY rate of 7.2>8.4%. Inflation can cause reduced purchase frequency in Supplies, Services and Veterinary. Super Premium Food has been generally immune as consumers are used to paying a lot and it is needed every day.

YOY Petflation slowed slightly in January from December but still set a new record for the month. Will it impact spending? Let’s put it into perspective. The 10.6% January 2023 increase in Total Pet beat the 10.3% record set in 2009 and is 6+ times more than the 1.5% average rate from 2010>2021. Pet spending continues to move to higher income groups, but the impact of inflation varies by segment. Supplies is the most affected as many categories are price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a reduction in visit frequency. The Services segment is the most driven by higher incomes, so inflation is less impactful. The US BLS recently decided to update the CPI annually rather than every 2 years based upon each expenditure’s share of total expenditures. I worked with them to update the CPI of my specially created aggregates. During our conversations, they noted that Pet expenditures had one of the biggest share gains of any group. Apparently, Pet Parents are just reallocating their $ to prioritize their “children’s” needs. This is not unexpected. We’ll see if it is impacted by continued high inflation.

2021 Veterinary Spending was $32.67B – Where did it come from…?

/in /by

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.

In 2017 low inflation spurred an unusual 7.2% increase in visit frequency and a $2.5B increase in spending. In 2018 inflation returned to more normal levels. Consumers spent $0.56B more (+2.7%), but inflation 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 2020 the pandemic hit, and Pet Parents focused on needs – Food & Veterinary. Veterinary spending grew $3.05B, (+14.0%). In 2021, this behavior grew even stronger and produced a record $7.82B (+31.5%) increase.

We’ll start our analysis with the groups who were responsible for the bulk of Veterinary spending in 2021 and the $7.82B 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). In terms of performance – 6 of 10 groups perform above 120%, the same as 2018>2020. This is equal to Supplies and more than Food (5) but less than Services (7). This means that these big spenders are performing well but it also signals that there is still a large disparity between the best and worst performing demographics in this “needed” segment. The groups are the same as those for Total Pet and categories are listed in the order that reflects their share of Total Pet $pending. As with all Industry Segments, High Income is the most important factor in Spending.

  1. Race/Ethnic – White, not Hispanic (84.7%) down from 87.2%. This group accounts for the vast majority of spending in every segment, but they lost significant share in 2021. Their 126.0% performance is also down from 127.5% and they fell from 3rd to 4th in importance in Veterinary Spending but it still reflects the disparity in spending. Minorities did narrow the gap in 2021 primarily due to a $1.5B, 91% lift by Hispanics. However, all groups spent more.
  2. # in CU – 2+ people (79.7%) up from 77.9% This group, which is 69.5% of U.S. CUs, gained share and their performance grew from 111.0% to 114.7%. Their rank in terms of importance in Veterinary Spending stayed at #8. All sizes spent more. The biggest $ lift, +$3.43B, came from 2 person CUs. 4 people had the biggest % gain, +75.8%.
  3. Housing – Homeowners (81.0%) down from 83.1% Homeownership is a major factor in pet ownership and spending in all industry segments. In terms of importance to Veterinary spending, their 125.2% performance rating is down from 126.3%, and they fell from to 4th to 5th place. All segments increased spending by over $2B. This is impressive. However, the percentage increase for Renters was +47.7%, while Homeowners’ spending grew only 28.2%. This difference is what drove the drop in share and performance. We should note that Homeownership is not nearly as important to Veterinary Spending as it once was. In 2015 their share was 88.4% with performance of 141.8%.
  4. Area – Suburban & Rural (73.0%) up from 67.1% Suburban CU’s are the biggest spenders in every segment. All areas spent more but those <2500 had a great year, +53.9%. This drove the big increase in share and their performance grew substantially to 113.2%, from 106.4%.
  5. Income – Over $70K (71.7%) up from 63.4% Their performance also grew significantly from 145.8% to 160.0%. Higher income became even more important in increased Veterinary spending. Only the $30>49K group spent less. The <$30K group had a slight lift, +$0.2B (+7.2%) but the other groups, over $50K all had 40+% increases. $150K> led the way with a $4.3B (+61.8%) spending increase.
  6. # Earners – “Everyone Works” (68.6%) down from 69.7% However, their Performance grew from 120.3% to 121.0% and they stayed at #6. In this group, all adults in the CU are employed. All segments spent more. Their share fell but performance increased because of a big $ lift from No Earners combined with a drop in the number of Earner CUs.
  7. Education – College Grads (65.4%) up from 61.3%. Income generally increases with education. It is also important in understanding the need for regular Veterinary care. Performance also grew from 131.2% to 138.1% and they stayed 2nd in importance. Once again, all segments in the category spent more. However, College Grads spent $6.13B more. That means that 47.4% of all CUs generated 78.4% of the increase. The BA/BS group led the way with +$3.8B. BTW, Associate Degrees also spent $0.8B more, emphasizing the importance of formal, after HS education.
  8. Occupation – All Wage & Salaried (66.4%) down from 68.1% but their performance increased from 110.7% to 111.9% due to 1.4M fewer CUs. All segments spent more. They lost share but gained in performance because of fewer CUs and a strong year by Retirees and non wage/salaried workers. The top 3 lifts were certainly a mixed bag: Mgrs/Professionals, +$2.27B; Retirees, +$1.59B; Service Workers, +$1.55B.
  9. CU Composition – Married Couples (60.9%) up from 58.6% Their performance also grew to 128.4% from 120.8% and they moved up to #3 from #6 in importance. After 2 years, Married Couples market share returned to 60+% while their # of CUs fell by 1%. Only Single Parents spent less, -$0.1B. Married Couples with Children were +$2.57B but all Married Couple CUs with no children were +$2.75B. Singles & All Adult, Unmarried CUs were +$2.59B.
  10. Age – 35>64 (62.1%) up from 60.1% Their performance also grew from 112.7% to 118.7% but they stayed in 7th place. For the 8th time all groups spent more and all had double digit % increases. The 55>64 yr olds led the way, +$2.20B but 35>44 was a close second, +$2.08B. Both of these segments had increases of 40+%.

Spending disparity grew in 8 categories and higher income became even more important in Veterinary spending. The most notable change was that Married Couples again reached a 60% share and moved from 6th to 3rd in importance. There was also a strong showing by 35>44 (Mostly young Gen Xers) and 55>64 (Mostly young Boomers).

Now, we’ll look at 2021’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 and there are only 5 that are different from 2020. This is 1 more than Supplies but far fewer than the 10 in Services and the 15 in Food. This suggests considerably less spending turmoil. The changes from 2020 are “boxed”. We should note:

  • Income– The winner is up from $150>199K. Winner & Loser are not surprises but the gap is 40% more than 2020.
  • Earners – An expected repeat winner and loser. They have the highest and lowest incomes.
  • Occupation – Retirees replaced Blue Collar at the bottom but once again, it’s all about income
  • Age – The 55>64 yr-olds edged out 35>44 and replaced the highest income group, 45>54 yr-olds at the top. These 3 groups have the highest income and are the only segments performing above 100% in Veterinary Spending.
  • Race/Ethnic; Education; Housing– The expected winners & losers but the performance gap grew for all but Renters.
  • Area – Another set of repeats but the difference in performance (disparity) increased by over 35% from 2020.
  • Region –Northeast replaced West at the top and has now won for 6 of the past 7 years. The South has finished last for 6 years in a row. The win/lose gap increased by 20%, but 2 regions performed at 100+% – the 1st time since 2019.
  • CU Composition – No change here but again the performance gap widened, by 20%.
  • # in CU – 4 Person CUs edged out 2 People for the win but now 2, 3 and 4 person CU’s all perform above 100%.
  • Generation – No change again and the performance gap only widened by 4%.

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

We saw little turmoil in performance. That’s also true here. There were 8 repeats and 3 segments flipped from 1st to last or vice versa. Last year they had 4 repeats and 10 flips. There were no surprise losers and 1 surprise winner – Millennials. In fact, in 9 categories all segments spent more, up from 4 in 2020. You should note that like 2020, the increases were significantly larger than the decreases. Plus, 94% of 96 demographic segments spent more. Here are the specifics:

  • Race/Ethnic – Both groups held their spots as White, non-Hispanics maintained their dominance in this segment.
    • Winner – White, Not Hispanic – Veterinary: $27.65B; Up $5.98B (+27.6%)                      2020: White, Not Hispanic
    • Loser – African American – Veterinary: $1.00B; Up $0.13B (+14.9%)                                  2020: African Americans
    • Comment– In 2019 only African Americans spent less. In 2020 & 2021 all spent more. This shows that Pet Parents commitment to the health & wellbeing of their Pet Children is widespread across all racial/ethnic groups.
  • Area Type – Center City, last year’s surprise winner flipped from 1st to last and big Suburbs returned to the top.
    • Winner – Suburbs 2500> – Veterinary Spending: $15.97B; Up $4.40B (+38.1%)               2020: Center City
    • Loser – Center City – Veterinary Spending: $8.83B; Up $0.66B (+8.1%)                               2020: Suburbs 2500>
    • Comment – All groups also spent more. The Suburbs 2500> went from a 3% increase in 2020 to a 38%, $4.4B increase in 2021. However, the Areas <2500 had the biggest % increase, +56.1%, up $2.2B.
  • Education – BA/BS Degree replaced Advanced College Degree at the top while <HS Grads stayed on the bottom.
    • Winner – BA/BS Degree – Veterinary Spending: $11.62B; Up $3.79B (+48.4%)                2020: Adv. College Degree
    • Loser – <High School Grads – Veterinary Spending: $0.37B; Up $0.03B (+8.3%)            2020: <HS Grads
    • Comment – All Education levels spent more but the lift was very much skewed towards higher Education. College grads generated 78.4% of the lift but those with at least an Associate’s Degree were responsible for 88.9%.
  • Housing – Homeowners w/Mtges held their usual position at the top.
    • Winner – Homeowner w/Mtge – Veterinary: $17.56B; Up $3.49B (+24.8%)                2020: Homeowner w/Mtge
    • Loser – Renter – Veterinary: $6.19B; Up $2.00B (+47.7%)                                                   2020: Renter
    • Comment – Every segment spent more and had an increase of at least $2B. You know that it was a great year when the “loser” spent 47.7% more.
  • # in CU – 2 Person CUs held on to the top spot.
    • Winner – 2 People – Veterinary Spending: $13.16B; Up $3.43B (+35.2%)                       2020: 2 People
    • Loser – 3 People – Veterinary Spending: $5.02B; Up $0.22B (+4.7%)                               2020: 1 Person
    • Comment: For the second consecutive year all groups spent more. 4 Person CUs went from a $0.04B (+1.5%) increase in 2020 to up $2.22 (+75.8%) in 2021.
  • Region – The Northeast flipped from last to 1st. This is 4 consecutive years of flips for this Region.
    • Winner – Northeast – Veterinary Spending: $7.52B; Up $3.42B (+83.5%)                      2020: West
    • Loser – Midwest – Veterinary Spending: $6.45B; Up $1.19B (+22.5%)                              2020: Northeast
    • Comment – All Regions had double digit percentage increases of at least $1.19B. The Midwest replaced the Northeast at the bottom and the South fell to 3rd place after 4 consecutive years at #2.
  • Generation – No flips and the winner and loser were both new.
    • Winner – Millennials – Veterinary: $9.23B; Up $3.18B (+52.5%)                                    2020: Baby Boomers
    • Loser – Born <1946 – Veterinary: $1.83B; Down $0.19B (-9.2%)                                     2020: Gen Z
    • Comments – In a bit of a surprise, Millennials replaced Boomers at the top. The oldest Generation had the only decrease as the Silent/Greatest replaced Gen Z at the bottom. In 2021, Millennials, younger Gen Xers and younger Boomers all had a strong year in Veterinary spending.
  • # Earners – Both the winner and loser are new, but not surprising.
    • Winner – 2 Earners – Veterinary Spending: $13.19B; Up $3.17B (+31.6%)                     2020: 3+ Earners
    • Loser – 1 Earner, Single – Veterinary Spending: $4.22B; Up $0.19B (+4.7%)                2020: No Earner, Single
    • Comment – The winner and loser reflect their income levels. Income is of primary importance to increased Veterinary Spending & # of earners is tied to income. In 2021 all CUs, with or without earners, spent more. 1 Earner, Singles had the only single digit % increase.
  • Income – Both the winner and loser are new.
    • Winner – $200K> – Veterinary Spending: $6.32B; Up $2.58B (+69.0%)                        2020: $100>149K
    • Loser – $30>39K – Veterinary Spending: $1.24B; Down $0.61B (-33.1%)                        2020: $70>99K
    • Comment – Only the $30>39K group spent less. We got off last year’s spending rollercoaster as the size of the increase in Veterinary spending generally grew with income, peaking at $200K> in both $ and percentage.
  • CU Composition – Married Couple Only held their spot at the top.
    • Winner – Married, Couple Only – Veterinary: $9.31B; Up $2.28B (+32.4%)                          2020: Married, Couple Only
    • Loser – Single Parents – Veterinary: $0.61B; Down $0.09B (-12.6%)                                         2020: Married, Oldest Child <6
    • Comment – After a 68% increase in 2020, Single Parents were the only group to spend less in 2021. Overall, Marriage became more important as 47.4% of CUs generated 60.9% of Veterinary $ and 68% of the increase.
  • Occupation – The winner held on while the loser changed from White Collar to Blue Collar.
    • Winner – Mgrs & Professionals – Veterinary Spending: $12.14B; Up $2.27B (+23.0%)        2020: Mgrs & Profess.
    • Loser – Construction Workers – Veterinary Spending: $0.65B; Up $0.06B (+9.9%)              2020: Tech/Sales/Clerical
    • Comment – Retirees finished in 2nd place, +$1.59B and not all Blue Collar workers had small increases. Service Workers were +$1.55B (+64.5%), the highest % increase of any segment.
  • Age – A new winner and loser.
    • Winner – 55>64 yrs – Veterinary Spending: $7.65B; Up $2.20B (+40.4%)                      2020: 25>34 yrs
    • Loser – <25 yrs – Veterinary Spending: $0.42B; Up $0.09B (+28.2%)                                2020: 35>44 yrs
    • Comment: Last year 2 groups spent less. In 2021 all segments increased Veterinary spending. 55>64 replaced 25>34 at the top while <25 replaced 35>44 on the bottom. This seemed to indicate that the $ were skewing a little older. In fact, the 25>55 age group generated 56% of the spending increase while 55 and over accounted for 42%. The younger groups are still strongly growing.

We’ve now seen the winners and losers in terms of increase/decrease in Veterinary Spending $ for 12 Demographic Categories. The 2020 pandemic brought strong  growth in Veterinary spending which grew even stronger in 2021. However, the lift came with little turmoil as most segments held their spots in performance and there were no significant surprises in $ changes. The surprise was in just how widespread the spending lift was. In 2020, 4 categories, had no segments that spent less and 85% of all demographic segments spent more. In 2021 these increased to 9 categories and 94%. This means that there were even more “hidden” segments that didn’t win but made a significant contribution to the $7.82B increase. These groups don’t win an award, but they certainly deserve….

Honorable Mention

Racial/Ethnic spending became a little more balanced thanks to a 91% increase by Hispanics. Veterinary spending is driven by income but the lowest income group, No Earner, Singles had the biggest % increase. Low income Service Workers also had a huge, 64.5% lift. Although they are the 2nd highest income segment, they are rarely the winner. In 2020 their increase in Veterinary $ was only 1%. In 2021 they exploded with a $1.72B (53.5%) lift, but this was only good enough for 3rd place in the income category. The 35>44 yr-olds had a great year, finishing 1st a number of times in other industry segments. In Veterinary they had to settle for 2nd place behind the 55>64 yr-olds. They are a perennial 2nd place finisher. In 2021, even a $2.1B increase was not enough to move them up. It was also a strong year for all Homeowners.

Summary

2016 & 2017 produced a combined increase of $3.6B in Veterinary Spending as inflation moved to record low levels. In 2018 & 2019 a Baby Boomer Spending “Bust” impacted Food & Veterinary. Fortunately, Gen X and Millennials stepped up to produce a 2.7% increase in both years. In 2020 the pandemic focused Pet Parents on the needed segments. This drove a $3B increase in Veterinary $. Boomers & Millennials led the way, but the lift was widespread as 85% of demographic segments spent more. In 2021 the lift grew to a record $7.82B with 94% of all segments spending more.

There was also less turmoil in the segment, but spending became a little less balanced in most demographic categories. The size of the increases far exceeded the size of the decreases. However, in 9 categories all segments increased spending. Income and Education remain of primary importance in terms of increased spending.

Income: Performance generally increases with income and reaches its highest level, 225+% at $200K>. The “halfway” point (50%) in $ fell below $100K for the 1st time in 2020. It turned up sharply in 2021 to $113K. Spending is less  balanced in most categories in 2021 due to income.

Higher Education: Performance increases with Education but now reaches 100% when you have an Associates degree. Those with a BA/BS or higher perform at 138%. The performance of those with no “formal” College Degree is 57%. The disparity is not quite as bad as Income but still big. 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 again identified six demographic categories with high performing large groups. There were 6 for Supplies, 7 for Services but only 5 for Food.  Consumers have no control over Race/Ethnicity but in addition to Income and Education, Homeownership, # Earners & Marriage are also important factors in Veterinary spending. All groups but Marriage are tied to income and their high performance demonstrates that there are still big spending disparities among segments within these categories.

There was really only 1 change of note. Marriage returned to prominence moving up from 6th to 3rd in importance.

In 2019 Veterinary spending increased +2.7% while prices rose 4.14% – a net decrease in the amount of Services. In 2020 spending grew +14.0% while inflation was 3.7%. That’s over 10% in real growth, a very positive situation. In 2021 inflation rose to 4.9% but spending skyrocketed, +31.5%. That means 26.6% in “real” growth, 84% of the total record increase – truly spectacular. Although the lift was demographically widespread, Veterinary spending became a little less balanced. We’ll see if Pet Parents continue to spend heavily on Veterinary Services with the high inflation rates in 2022.

Finally – The “Ultimate” Veterinary Services Spending Consumer Unit consists of 4 people – a married couple with an oldest child over 18. They are 55>56 years old. They are White, but not of Hispanic origin. At least one of them has an Adv. College Degree and works as a Mgr/Professional. Their oldest child also works. Their total income is $200K>. They live in a small suburb, adjacent to a big city in the Northeast U.S. and are still paying off the mortgage on their home.

2021 Pet Services Spending was $9.10B – Where did it come from…?

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Next, we will look at Pet Services. It is still by far the smallest Segment, but like Supplies and Veterinary, it too had a record increase in 2021, up $2.21B (+32.0%). After the great recession, Services’ annual spending slowly but steadily increased. During this time, the number of outlets offering Services strongly grew as brick ‘n mortar retailers looked for a way to combat the growing influence of online outlets. After all, you can certainly buy products, but you can’t get your dog groomed on the Internet. This created a highly price competitive market for Pet Services. In 2017 there was a slight increase in visit frequency, but Pet Parents just paid less. This resulted in a 1.0% decrease in Services spending. In 2018 consumer behavior changed as a significant number decided to take advantage of the increased availability and convenience of Pet Services and spending literally took off, +$1.95B (+28.9%), by far the biggest increase in history. In 2019 Pet Parents, especially the younger ones, value shopped, and spending turned down $0.10B. In the 2020 pandemic Services outlets were often deemed nonessential and were subject to restrictions and closures which drove a huge drop in $. In 2021 things opened up again and Pet Parents came back to Services generating the biggest $ increase ever.

The Pandemic had a radically different impact depending on whether a segment was necessary or discretionary. Services  spending is arguably the most discretionary of any Pet Expenditure. Let’s look deeper into 2021 spending demographics.

Let’s start by identifying the groups most responsible for the bulk of Services spending in 2021 and the $2.21B increase. The first chart details the biggest Pet Services spenders for each of 10 demographic categories. It shows their share of CU’s, share of Services spending and their spending performance (Share of spending/share of CU’s). In order to better target the bulk of the spending we had to alter the groups in two categories – income and area. The performance level should also be noted as 7 of 10 groups have a performance level above 120%, equaling their previous high set in 2018. This is the most for any segment – 6 for Supplies and Veterinary and only 5 for Food and Total Pet. Last year they had only 5 over 120%. This indicates that the disparity between the best and worst performing segments grew in 2021. Income is still the biggest factor in Services Spending and its importance is growing. The categories are presented in the order that reflects their share of Total Pet $ which highlights the differences of the 8 matching groups. For Services, the share ranking differences from Total Pet are small. Married Couples replaced 35>64 at the bottom.

  1. Race/Ethnic – White, not Hispanic (84.6%) down from 87.9%. This big group accounts for the vast majority of spending in every segment. Services Spending became slightly more diverse in terms of race and ethnicity in 2021 as their performance decreased from 128.5% to 125.9% and they fell from 4th to 5th place in terms of importance.
  2. # in CU – 2+ people (82.2%) up from 78.3% The share for 2+ CU’s is over 79% for all segments and Services is 2nd to Supplies’ 83.3%. Their performance also increased from 111.6% to 118.3% but they stayed in 8th place in importance. All sizes spent more, with the biggest lift, +$1.3B from 2 Person CUs. Singles were only up $0.12B, +28%.
  3. Housing – Homeowners (80.5%) up from 78.3%. Homeownership is a big factor in spending in all industry segments. The Homeowners’ share of Services grew and Supplies replaced them at the bottom. Their performance grew from 119.3% to 124.5% and they rejoined the 120+% club at #6. Those w/Mtges led the way, up $1.4B, +36.4%.
  4. Area – City/Suburbs >2500 (80.3%) down from 83.3% in share, and performance fell from 102.7% to 98.1%, the only big group not earning its share of $pending. Services is an Urban Segment. All Areas spent more but Center City had only a small increase which drove down the group’s share and performance.
  5. Income – $100K> (63.3%) up from 57.2% This group’s performance rating is 211.4%, up from 201.0%. CU income is still by far the most important factor in increased Pet Services Spending. Only the $40>49K income group spent less, -$0.14B. However, the spending increase was strongly skewed towards higher incomes. The over $100K group has 30.0% of all CUs but generated 82.4% of the $2.21B lift in $pending.
  6. # Earners – “Everyone Works” (72.8%) up from (69.9%) All adults in the CU are employed. Income is important so a high market share is expected. Their performance grew to 128.3% from 122.0% and they moved up to #4 from #5 in importance. Only No Earner, Single CUs spent less. Households with 2+ Earners account for 39.3% of all CUs but they generated 73.8% of the increase. Retirees are important to Services but overall, more workers = more $.
  7. Education – College Grads (71.7%) up from 68.5%. Income generally increases with education so Services spending grows with increasing education. College Grads spend the most so they were hit hardest by the pandemic and then had the strongest recovery. Performance grew from 146.6% to 151.5% and education stayed #2 in importance.
  8. Occupation– All Wage & Salaried (67.6%) up from 66.8% and their performance rating increased from 108.7% to 114.0%. – Only Operators/Fabricators/Laborers spent less on Services. Managers & Professionals had the biggest increase, +$1.02B (+36.5%). Most Occupational segments had an increase in the 25>40% range. The exception was Self-Employed, only +12%. This drove the increase in share and performance for the big group. Services spending became a little more balanced among Salaried/Wage Workers but a little less balanced in terms of Occupation.
  9. CU Composition – Married Couples (63.3%) up from 62.8%. Married couples are a big share of $ and have 128+% performance in all segments. Their performance increased to 133.6% from 129.4% and they stayed in 3rd place in terms of importance to Services spending. Only Married, Oldest Child <6 spent less. The biggest $ increase came from Married Couple Only, +$0.81B but the biggest % lift was in Unmarried, 2+ Person, All Adult CUs, +66.7%.
  10. Age – 35>64 (63.9%) up from 62.5%. Their performance grew from 117.1% to 122.0% and they entered the 120+% club at #7. Only 45>54 spent less, -$0.02B. All other groups had double digit % increases. The 35>44 group led the way, up $0.78B (+61.3%) but they were closely followed by 55>64, +$0.75B (+56.3%).

We changed 2 of the groups for Services – Income and Area, to better target the biggest spenders. We should also note that Income is still more important to spending in Services than in any other segment. Except for Race/Ethnic and Area, the big groups gained in share and performance. Also, Services now has 7 groups performing at 120+%, the most of any segment. Overall, in 2021 Services spending became slightly less demographically balanced.

Now, we’ll look at 2021’s best and worst performing Pet Services spending segments in each category.

Except for Area the best & worst performers are not a surprise. There are 10 that are different from 2020, 4 of the best and 6 of the worst, 3 more than last year. Area shows an unusual move away from high population. The high income Gen Xers stayed on top, but spending shifted towards their younger members, 35>44. However, it wasn’t a total youth movement. The youngest groups replaced the oldest at the bottom. Changes from 2020 are “boxed”. We should note:

  • Income is even more important to Pet Services. The $200K> group has its best performance in this segment.
  • # Earners – 2 Earners replaced 3 Earners and No Earner, Singles replaced No Earner, 2+ CUs. No Surprises.
  • Generation – Gen X retained Top Spot and the youngest group, Gen Z replaced the oldest, born before 1946 at the bottom. Boomers also earned their share with 102.8% performance and Millennials were close at 97.8%.
  • Age – 35>44 is mostly Gen X and the 2nd highest income group. All groups from 35>64 performed at 100+%. The lowest performers were at both ends of the age spectrum with <25 replacing 75> at the bottom.
  • Area – Two Surprises. The <2500 Area flipped from Last to First. Services $ are skewed towards population density. The big Suburbs 2500> are the normal winners but Center City also usually performs above 100%.
  • Region – The usual Winner but Northeast performance was also strong, 111.8%. The biggest change was the huge difference between 1st and Last. Normally, regional performance is more balanced with all performing above 88%.
  • CU Size – 2 Person CUs edged out last year’s winner, 4 People and returned to the top spot. Only Singles performed below 100% and they returned to their usual spot at the bottom.

In Pet Services spending performance, income is still the major factor. Spending began skewing younger in 2018. They slipped a little in 2019 but they basically held their ground during the 2020 pandemic. In 2021, Boomers, Millennials and the younger Gen Xers all got on board to drive the record rebound in Supplies Spending.

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

In this chart you immediately see the difference from last year. In 2020 there were 3 categories in which all segments spent less on Services. In 2021 there were 5 where all segments spent more. The changes by the winners were also radically larger than the losers. The tumult of 2020 continued but it was all positive. There were no repeats and 9  segments switched from last to first. 3 segments flipped from 1st to last but they all had spending increases. In fact, 90% of 96 demographic segments spent more on Services. Here are the specifics:

  • Race/Ethnic – Last year’s big loser, White, Not Hispanic, flipped to the top.
    • Winner – White, Not Hispanic – Services: $7.70B; Up $1.64B (+27.1%)                             2020: Hispanic
    • Loser – Asian – Services: $0.21B; Up $0.06B (+43.5%)                                                           2020: White, Not Hispanic
    • Comment– All groups spent more. Hispanics finished 2nd , up $0.36B (+69.8%).
  • # Earners– 2 Earners went from last to first.
    • Winner – 2 Earners – Pet Services Spending: $4.26B; Up $1.40B (+49.0%)                       2020: 3+ Earners
    • Loser – No Earner, Single – Pet Services Spending: $0.43B; Down $0.05B (-9.6%)          2020: 2 Earners
    • Comment – Only No Earner, Singles spent less, but No Earner, 2+ CUs doubled their spending, +100.7%.
  • Housing – Both winner and loser flipped back to their “usual” positions.
    • Winner – Homeowner w/Mtge – Services: $5.18B; Up $1.38B (+36.4%)                             2020: Renter
    • Loser – Renter – Services: $1.77B; Up $0.29B (+19.7%)                                                           2020: Homeowner w/Mtge
    • Comment – All spent more as Homeowners w/o Mtges had a 33.1% increase.
  • # in CU – The winner flipped from last place in 2020 but the loser is new.
    • Winner – 2 People – Pet Services Spending: $3.75B; Up $1.26B (+50.8%)                    2020: 4 People
    • Loser – 3 People – Pet Services Spending: $1.31B; Up $0.08B (+6.4%)                          2020: 2 People
    • Comment: All segments spent more. The 2 person lift was primarily driven by the Married Couple Only segment.
  • Education – Advanced College Degree flipped from last to 1st, back to their normal spot.
    • Winner – Adv. College Degree – Pet Services Spending: $3.45B; Up $1.20B (+53.3%)    2020: HS Grads
    • Loser – <HS Grads – Services Spending: $0.14B; Down $0.02B (-13.2%)                            2020: Adv. College Degree
    • Comment – Only those without a HS Diploma spent less but College Grads drove the lift. They have 47.4% of CUs but they provided 81.9% of the Services spending increase.
  • Income – Both winner and loser are new.
    • Winner – $200K> – Pet Services Spending: $2.58B; Up $1.02B (+65.5%)                            2020: $50>69K
    • Loser – $40 to $49K – Pet Services Spending: $0.28B; Down $0.06B (-18.7%)                    2020: $100 to $149K
    • Comment – No surprises. The $40>49K group had the only spending decrease. Lower income groups normally occupy this position. The $200K> group makes the most $ and in 2021 they used some of those $ for Services.
  • Occupation – Mgrs & Professionals flipped from last back to their usual position on top.
    • Winner–– Mgrs & Professionals – Pet Services Spending: $3.81B; Up $1.02B (+36.5%)        2020: Self-Employed
    • Loser – Operators & Laborers – Pet Services Spending: $0.18B; Down $0.02B (-12.1%)       2020: Mgrs & Profess.
    • Comment – Only Operators/Laborers spent less. Retirees also had a good year, up $0.41B (+43.5%).
  • Region – The South flipped from 1st to last.
    • Winner – West – Pet Services Spending: $2.96B; Up $0.96B (+48.2%)                                    2020: South
    • Loser – South – Pet Services Spending: $2.73B; Up $0.08B (+3.0%)                                         2020: Midwest
    • Comment – In 2020 all Regions spent less. In 2021 all Regions spent more – a major turnaround.
  • Area Type – Both the winner and loser flipped positions. All areas spent more.
    • Winner – Suburbs 2500> – Pet Services Spending: $4.24B; Up $0.91B (+27.3%)                 2020: Areas <2500
    • Loser – Areas <2500 – Pet Services Spending: $1.79B; Up $0.65B (+56.3%)                         2020: Suburbs 2500>
    • Comment – Two straight years with Center City not either winning or losing – surprising!
  • Generation – Boomers flipped from last to first. No Food binge in 2021, so they spent more in other segments.
    • Winner – Baby Boomers – Services: $3.06B; Up $0.86B (+39.5%)                                         2020: Gen Z
    • Loser – Born <1946 – Services: $0.35B; Down $0.07B (-16.4%)                                               2020: Baby Boomers
    • Comment – Last year only Gen Z spent more. In 2021 they spent less along with those born <1946. Boomers had the biggest increase but both Gen X and Millennials spent $0.7B+ more.
  • CU Composition – Married, Couple Only flipped from last to first.
    • Winner – Married, Couple Only – Services: $2.61B; Up $0.81B (+44.9%)                        2020: Married, Oldest Child 6>17
    • Loser – Married, Oldest Child <6 – Services: $0.29B; Down $0.02B (-7.9%)                    2020: Married, Couple Only
    • Comment – Only Married, Oldest Child <6 spent less. Married, Couple Only won, but Married, Oldest Child 6>17 was +$0.47B and 2+ Unmarried, All Adult CUs spent $0.59B more.
  • Age – Both winner and loser are new.
    • Winner – 35>44 yrs – Pet Services Spending: $2.05B; Up $0.78B (+61.3%)                              2020: <25 yrs
    • Loser – 45>54 yrs – Pet Services Spending: $1.68B; Down $0.02B (-1.2%)                               2020: 75+ yrs
    • Comment: In 2020, all age groups spent less on Services. In 2021, only the high income 45>54 yr-olds spent less. The 55>64 yr-olds finished a close 2nd to 35>44 with a $0.75B (+56.3%) increase. Together, these 2 groups generated 69.2% of the $2.21B increase in Services Spending.

We’ve seen the winners and losers in terms of change in Services Spending $ for 12 Demographic Categories. The lift set a record and was widespread. Here’s some data which shows the evolution from 2018 to 2021 as Services worked their way back up and even exceeded their last peak in 2018. You see the difference between the big down & up swings.

Total Spending:       2018: $8.72B       2019: $8.62B       2020: $6.89B       2021: $9.10B

% Segments w/↑$:  2018: 88%            2019: 49%            2020: 21%            2021: 90%

Avg Biggest ↑$:        2018: $1.04B       2019: $0.25B       2020: $0.05B       2021: $1.10B

Avg Biggest ↓$:        2018:-$0.02B      2019: -$0.27B      2020: -$0.89B      2021: $0.07B

We found the winners in performance and $, but there were others who performed well but didn’t win. They deserve….

Honorable Mention

A big change from the 2020 chart. This year the worst performer was +42.9%. Last year’s worst was +0.9%. 5 People CUs had the 2nd biggest increase but they more than doubled their Services Spending. Services $ usually follows income $ but the low income No Earner, 2+ CUs also doubled their spending. The West was the leader in the lift and performance, but the Northeast was a strong second in both, including a performance level of 111%. Married Couples led the way, but kids were a little less important. Unmarried, 2+ All Adult CUs had a bigger increase than all Married, w/kids CUs combined. No Food Binge for 55>64. They spent more in other Segments, including Services. Gen X won the awards, but Millennials also were strong. Their 2020>21 increase matched their previous biggest lift in 2017>18. In 2021, 90% of all segments increased Services spending. That means that we could have added many more to this honored group.

Summary

For years, Services’ spending slowly but steadily increased. However, the number of outlets offering Services was radically increasing. In 2017, this competitive pressure caused Pet Parents to shop for value and spending fell 1%. In 2018, the abundance of outlets and competitive prices finally had their intended impact. Many more consumers took advantage of the convenience of Pet Services and spending literally took off with a record increase to a new all-time spending high. In 2019 Consumers held their ground at the new higher level but we saw turmoil similar to 2017. Again, value shopping likely contributed to the small decrease.

In 2020 pandemic Services outlets were often deemed nonessential so they were subject to restrictions and closures. Services are definitely needed by some groups. However, for most demographics, Services are a convenience and spending is very discretionary in nature. The reduced availability and the pandemic driven focus on the “needed” segments – Food and Veterinary caused a 20% drop in Services $.

In 2021 the Retail Marketplace opened up again and many Pet Parents strongly returned to their previous Services mantra, “I need help with my Pet “children” and I have the money to pay for it!”. This behavior was widespread as 90% of all demographics spent more on Services. This produced a record $2.21B increase and Services spending exceeded $9B for the first time.  While the lift was widespread, unfortunately, the spending disparity increased. Performance differences are a key measurement of disparity. Let’s consider the performance of the big groups. There were 7 categories with a 120+% performing big group, up 2 from 2020, the most of any segment – Food (5), Supplies & Veterinary (6). This clearly indicates more disparity in Services Spending.

  • Income   · Higher Education     · CU Composition    · # Earners    · Race/Ethnic   · Housing    · Age

The Housing category returned to the 120+% Club and Age was added. Gen X and Boomers are still the top 2 spenders and the younger members of these groups drove the increase. Income remains the key factor in Services spending. The best performing segments and those with the biggest increase almost without exception rank 1st or 2nd in income.

Services were hit the hardest by the pandemic in 2020 but they had a record, widespread recovery in 2021. They are the segment most driven by high income so inflation has less of an impact. We’ll see if the record price increases in 2022 negatively affect Services Spending.

At Last – The “Ultimate” Pet Services Spending Consumer Unit consists of 4 people – a married couple with 2 kids. The oldest child is 6>17. They are 35>44 yrs-old and White, but not of Hispanic origin. They both work and at least one of them has an Advanced College Degree and is a Manager or Professional. They have an income of over $200K. They live in a small suburb of a metropolitan area of 2.5>5 MM in the Western U.S. and are still paying off their home mortgage.