Retail Channel $ Update – June Monthly & July Advance

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In July, Commodities deflation vs last year remained stable at -0.4%. Although still deflating, the high prices from cumulative inflation still impact consumer spending. The YOY Total Retail sales lift for July is 87% of the 92>23 average but the Relevant Retail increase is now 111% – Much Better!. Prices are now deflating in many channels but still high vs 21, which can slow growth in the amount of product sold. There is still a long road to recovery, so we’ll continue to track the retail market with data from 2 reports provided by the Census Bureau and factor in a targeted CPI.

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 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 Monthly reports. The biggest difference is that the full sample in the Monthly report allows us to “drill” a little deeper into the retail channels.

We will begin with the June Monthly Report and then go to the July Advance Report. Our focus is comparing to last year but also 2021 & 2019. We’ll show both actual and the “real” change in sales 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 is more detailed in the Monthly reports, and we’ll focus on Pet Relevant Channels.

The data will be presented in detailed charts to facilitate visual comparison between groups/channels. The charts will show 11 separate measurements. To save space they will be displayed in a stacked bar format for the channel charts.

  • Current Month change – % & $! vs previous month
  • Current Month change – % & $ vs same month last year and vs 2021.
    • Current Month Real change vs last year and vs 2021 – % factoring in inflation
  • Current Ytd change – % & $ for this year vs last year, 2021 & 2019.
    • Current Ytd Real change % for this year vs last year and vs 2021 and 2019
  • Monthly & Ytd $ & CPIs for this year vs last year and vs 2021 which are targeted by channel will also be shown. (CPI Details are at the end of the report)

First, the June Monthly. All were down from May and there were 5 actual sales drops vs 23 & 21. We should again note that Gas Stations are still selling less product than in 2019. Also, Relevant Retail is “really” down again monthly vs 21. They have been all positive in 5 of the last 8 months but not in 3 of the last 4. ($ are Not Seasonally Adjusted)

The June Monthly is $1.8B less than the Advance report. Restaurants: -$0.6B; Auto: -$1.6B; Gas Stations: +$0.5B; Relevant Retail: -$0.2B. As expected, $ales were down vs May for all. The -5.7% decrease was the biggest May>Jun drop ever. There were 5 drops in actual sales. Auto & Gas Stations had 4 & drove down Total Retail vs June 23. Auto had 2 drops despite ongoing deflation. Total: vs June 23; Auto: vs June 23 & 21; Gas Stations: vs June 23 & Ytd vs 23. There were 9 “real” sales drops, up from 5 last month and all groups had at least one. Restaurants still have the biggest increases vs 21 & 19 but Relevant Retail stayed at the top of “real” performance vs 2019. However, only 51% of their growth is real.

Now, let’s see how some Key Pet Relevant channels did in June in the Stacked Bar Graph Format

Overall– Only 2 of 11 were up from May. vs June 23, 6 were actually and 7 “really” up. Vs June 21, 7 were up but only 4 were real increases. Vs 2019, Off/Gift/Souv were actually & really down and Disc Dept Strs were also really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 30.5% since 2019. Prices for the Bldg/Matl group have inflated 16.3% since 2021 which is having an impact. HomeCtr/Hdwe are only actually up Ytd vs 21 & 19 but Farm stores are only actually up Ytd vs 19. Only “real” measurements Ytd vs 23 & 19 are positive for Home/Hdwe. For Farm Stores all “real” numbers but vs 19 are negative. Plus, only 22% of the overall Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.2%, Real: 1.1%; Farm: 6.5%, Real: 2.3%
  • Food & Drug – Both are truly essential. Except for the pandemic food binge buying, they tend to have smaller changes in $. In terms of inflation, the Grocery rate is only 35% of the rate for Drug/Med products. Drug Stores are only actually down vs June 23 but they are “really” down monthly & Ytd vs 2023 and vs June 21. 62% of their 2019>24 growth is real. Supermarkets $ are up in all measurements and they are only “really” down vs 2021. However, only 6% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.1%, Real: +0.3%; Drug Stores: +4.6%, Real: +3.0%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up from May, but their only positives are actual & real Ytd vs 19. Prices are still deflating, -0.8% vs 23. Deflation started in April 23 and is a big change from +1.1% in 22>23 and +7.9% in 21>22. The result is that 58% of their 36.8% lift since 19 is real. Avg 19>24 Growth Rate is: +6.5%; Real: +4.0%.
  • Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs & $ stores. On the other hand, Discount Dept Stores were only actually up vs June 23 and Ytd vs 21 & 19 and really up vs June 2023. Plus, none of their growth since 2019 is real. The other channels average 44% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.0%, Real: 2.8%; $/Value Strs: +6.4%, Real: +3.2%; Disc. Dept. Strs: +1.7%, Real: -0.3%.
  • Office, Gift & Souvenir Stores – Sales were up 8.4% from May, but it was not enough. They are actually up vs June 23 & 21 and Ytd vs 21. All of their real sales numbers but vs June 23 are negative. This includes all negatives vs 2019. Their recovery started late, and their slow progress has been stalled since June 23. Avg Growth Rate: -0.3%, Real: -2.3%
  • Internet/Mail Order – Sales are down from May but still set a new monthly record of $106.0B. All measurements are positive, but their growth is still only 69% of their average since 2019. However, 82.0% of their 113.9% growth since 2019 is real. Avg Growth: +16.4%, Real: +14.1%. As expected, they are still by far the growth leaders since 2019.
  • A/O Miscellaneous – Pet Stores are 22>24% of total $. In May 2020 they began their recovery which reached a record level of $100B for the first time in 2021. In 2022 their sales dipped in January, July, Sept>Nov, rose in December, fell in Jan>Feb 23, grew Mar>May, fell in Jun>Aug, rose in Sep>Nov, fell in Dec>Jan, grew in Feb>May, then fell in June. All measurements but actual vs June 23 are positive. They are still in 2nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 73% of their 56.6% growth since 2019 is real. Average 19>24 Growth: +9.4%, Real: +7.2%.

June brought its usual drop. Only 2 small channels were up vs May. The YOY lifts continue to be small and only 6 of 11 smaller channels and 3 big groups were up vs June 23. Prices are deflating in 7 of 11 channels but cumulative inflation is still a factor. Sales increases are lower as 7 of 11 channels were really down vs June 21. The Retail Recovery is definitely slowing. The commodities CPI was stable at -0.4% in July. Let’s see if continuing deflation impacts Retail $ales.

July sales vs June increased for all but Restaurants. A Jun>Jul Total Retail lift has happened in 56% of the years since 1992. However, the 3.2% lift is far above the average change of 0.1%. All actual YOY $ measurements are positive for all groups but Gas Stations. The Relative Retail lift  vs Jul 23 was 11% above their 92>23 Average. The lifts for the other groups were 20+% below avg. Inflation is still a big factor. The rate for all commodities, the best pricing measure for Retail, remained stable at -0.4% but is 11.1% vs 21. There is some “real” retail good news. In June, 8 measurements were “really” down vs 23 & 21. All groups had at least 1 drop. In July, only 4 were really down. Total & Relevant Retail were all positive. Also of note, from Nov 23>Feb 24 Relevant Retail had 4 straight months of all positive measurements. After 2 months with a negative, they have been all positive in 2 of the last 3 months. Total Retail has the same Apr>Jul pattern.

Overall – Inflation Reality – For Total Retail, prices deflated again and all measurements turned positive. For Restaurants, inflation remains high, +4.0% and they are no longer all positive. Gas prices rose and that group is still in turmoil. Auto prices are still falling and are only +2.5% vs 21 which helped actual & real sales. Inflation stabilized at +0.1% for Relevant Retail and sales are again all positive. Their progress appears to have restarted.

Total Retail – Since June 20, every month but April 23 & June 24 has set a monthly sales record. In 2023, Sales were on a roller coaster. Up Jul>Aug, down Sept, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down June, up in July. Prices are still -0.4%. YOY sales growth is up to 85% of the 92>23 avg. Sales are up 2.9% Ytd vs 2023, only 43% of their avg 19>24 growth. Plus, only 39% of the 19>24 growth is real. YOY inflation in Total Retail has slowed and is still deflating but we still see its cumulative impact. Growth: 23>24: 2.9%; Avg 19>24: +6.8%, Real: +2.8%.

Restaurants – They were hit hard by the pandemic and didn’t begin recovery until March 2021. However, they have had strong growth since then, exceeding $1T for the 1st time in 2023 and even setting a new July sales record, despite the -0.5% $ drop. They have the biggest Ytd increases vs 23, 21 & 19 but sales vs July 23 are now really down. Inflation rose to 4.0% in July and is still +19.6% vs 21 and +20.5% vs 19. 36.7% of their 49.8% growth since 19 is real and they remain 3rd in performance behind Relevant & Total. Recovery started late but inflation started early. Growth: 5.3%; Avg 19>24:+8.4%, Real: +3.4%. They just account for 13.6% of Total Retail $, but their performance has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They 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 but much of it was due to skyrocketing inflation. In 22, sales got on a rollercoaster. Inflation started to drop mid-year, but it caused 4 down months in actual sales which are the only reported sales negatives by any big group in 21>22. This is bad but their Y/E real 2022 sales numbers were much worse, down -8.2% vs 2021 and -8.9% vs 2019. 2023 was a true rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell in Apr, grew in May, fell in June, grew in July. Only Real Ytd $ vs 21 are negative. Their CPI is -4.5%. Only 18.2% of 19>24 growth is real. Growth: 1.4%; Avg 19>24: +5.5%, Real: +1.1%.

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery in March 2021 and inflation began. Sales got on a rollercoaster in 2022 but reached a record $583B. Inflation started to slow in August and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In August they rose to -3.7%. In Sep they were +2.7% but began deflating to -4.2% in Feb. In Mar>May they grew, fell in June, rose in July. $ are only down Ytd vs 23. Real sales are down vs July 21 and Ytd vs 21 and 19. Growth: -0.6%; Avg 19>24: +4.5%, Real: -1.0%. They show the cumulative impact of inflation and demonstrate how deflation can be both a positive and a negative.

Relevant Retail – Less Auto, Gas and Restaurants – They account for ≈60% of Total Retail $ in a variety of channels, so they took many different paths through the pandemic. However, their only down month was April 2020, and they led the way in Total Retail’s recovery. Sales got on a roller coaster in 2022 but all months set new records with December reaching a new all-time high, $481B, and an annual record of $4.81T. In 2023, the roller coaster continued. A December lift set a new monthly record of $494.7B & an annual record of $4.997T. Sales fell in Jan>Feb 24, rose in Mar, fell in Apr, rose in May, fell in June, then rose in July, a normal pattern. The July YOY lift of 5.2% is 11% above their 92>23 avg and and all measurement are again positive. Also, 51% of their 41.4% 19>24 growth is real – #1 in performance. Growth: 3.4%; Avg 19>24: +7.2%, Real: +3.9%.This is where America shops. They finished 2023 and started up 2024 strong. In Mar>Apr their recovery slowed. In May, things improved, worsened in June, then rebounded in July.

Inflation is still low, but the cumulative impact is still there. However, some Sales increases are improving, which is very evident in July for Relevant Retail. It is also significant that there are only 4 real drops vs 23 & 21, down from 8 in June. Restaurants are a little worse off, but the Auto group is improving. Gas Stations remain in turmoil. The biggest concern is still with Relevant Retail. Their YOY Sales increase is much higher, and all measurements are positive for the 2nd time in the last 3 months. Total Retail has a similar pattern. After a bad June, the recovery appears to be getting “back on track”.

Here’s a more detailed look at July by Key Channels in the Stacked Bar Graph Format

  • Relevant Retail: Growth: +3.4%; Avg: +7.2%, Real: +3.9%. 7 were up from June. Vs Jul 23: 8 were up, Real: 9, Vs Jul 21: 6 were up, Real: 6. Vs 19: Only Dept Stores were actually & really down. Furnishing strs. were also really down.
  • All Dept Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are down 1.1% from June. Their actual $ are only up Ytd vs 21. Their real numbers are all negative. They are even actually & really down vs 2019. Growth: -1.5%;Avg 19>24: -0.2%, Real: -2.2%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -1.3% from June, but they are positive in all measurements. However, only 44.4% of their 34.2% 19>24 lift is real – inflation’s impact. Ytd growth is below Avg for the 4th straight month. Growth: 3.6%; Avg: +6.1%, Real: +2.9%.
  • Grocery- These stores depend on frequent purchases, so except for the binge buying in 2020, their changes are usually less radical. Actual $ are +3.0% from June and positive in other comparisons. However, cumulative inflation has hit them hard. Real $ are only up vs 23 & 19 and only 6% of 19>24 growth is real. Growth: 1.8%; Avg 19>24: +5.2%, Real: +0.3%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +3.3% from June. They are up in all actual comparisons and only really down Ytd vs 23. Because inflation has been relatively low, 62% of their 26.1% growth from 2019 is real. Growth: 2.4%; Avg 19>24: +4.7%, Real: +3.0%
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 21 with strong growth through 2022. Sales are up 0.8% from June and positive in all comparisons but real vs Jul and Ytd 21. Plus, 63% of their 19>24 growth is real. Growth: 2.6%; Avg 19>24: +3.3%, Real:+2.1%
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Prices are still deflating but they were high in 2022. Sales are +3.2% from June but negative in all other measurements but actual $ vs 19 and real $ vs Jul 23. They have sold less product in 2024 than 2019. Growth: -3.1%;Avg 19>24: +2.3%, Real: -0.3%
  • Electronic & Appliances – This channel has had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are +6.1% from June but all comparisons are positive but actual sales vs July & Ytd 21. We should also note that their current Ytd growth is now above their 19>24 avg. Growth: +1.7%; Avg 19>24: +0.9%, Real: +3.8%.
  • Building Material, Farm & Garden & Hardware –They truly benefited from the consumers’ focus on home. In 2022 the lift slowed as inflation grew to double digits. Prices are still deflating and sales are +0.7% from June. Actual sales are only down Ytd vs 23. Prices are deflating but they are still 16.7% above 21 so real sales vs July & Ytd 21 are negative. Also, just 22% of their 19>24 sales growth is real. Growth: -2.3%; Avg 19>24: +5.5%, Real: +1.3%.
  • 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. After a big June lift sales fell -1.5% in July. All comparisons, actual & real, but Ytd vs 2019 are negative. Their inflation rate has been lower than most groups so 71% of their 25.6% growth since 2019 is real. Growth: -3.5%; Avg 19>24: +4.7%, Real: +3.4%.
  • All Miscellaneous Stores – Pet Stores have been a key part of the strong and growing recovery of this group. They finished 2020 at +0.9% but sales took off in March 21 and have continued to grow. Sales are -4.1% vs June but positive in all measurements vs 23, 21 & 19. They are still 2nd to NonStore in the % increase vs 19 and vs 21. 67.3% of their 41.0% 19>24 growth is real but their current Ytd lift is still 24% below Avg. Growth: +5.4%; Avg 19>24: +7.1%, Real: 5.0%.
  • NonStore Retailers – 90% of their $ 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. $ are +8.7% from June. Their YOY lift jumped to +11.8% in July but Ytd they are 41% below Avg. They are positive in all measurements and 81% of their 101% 19>24 growth is real. Growth: 8.8%; Avg: +15.0%, Real: +12.7%.

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, inflation has slowed considerably from its June 22 peak and now 7 channels are deflating. This should help the Retail Situation. Sales grew from June. The 3.1% lift for Relevant Retail was remarkably better than their -0.4% 92>23 avg. This was a big improvement. However, the big problem has been slowing YOY monthly increases. That may have also started to change in July. The 5.2% Relevant Retail lift vs Jul 23 was 11% above their 92>23 average increase of 4.7% and only 3 of 11 channels had a decrease. In June there were 5 YOY monthly drops. Electronics (+13.2%) led the way among the 8 with lifts but there were 4 with increases of 6.5+%. One channel even had a Ytd lift above their 19>24 Avg – the first time that this has happened in 4 months. There is more good news. Relevant Retail is again positive in all comparisons. That’s now happened in 2 of the last 3 months. The recovery definitely slowed in June, but it has strongly restarted in July.

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. The data also includes the CPI changes since 2021 to show cumulative inflation.

Monthly YOY 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?
    • 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?
    • 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.
    • 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?
    • 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.
    • 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?
    • 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.

Petflation 2024 – July Update: Slows to +1.9% vs 2023

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The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Jul 24. However, the CPI slowed in July to +2.9% from +3.0% in June. Grocery prices increased +0.3% from June, but inflation stayed at 1.1%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 17 consecutive months below 10%. As we have learned, 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.

Petflation was +4.1% in December 2021 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 2022. National inflation has slowed considerably since June 2022, but Petflation generally increased until June 2023. It passed the National CPI in July 22, but at 1.9% in July, it is 34.5% below the national rate, a big change from +52% in January. We will look deeper into the data. The 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 24 vs 23 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>23, 21>22, 20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2024 vs 2019 and vs 2021 to see the full inflation surge.
    4. Average annual Year Over Year inflation rate from 2019 to 2024
  • YTD comparisons
    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 July 22 to July 24. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in segment patterns and compare them to the overall U.S. CPI. The year-end numbers and those from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In July, Pet prices were down -0.1% from June. Prices for all segments but Non-Vet Services were lower.

In July 22, the CPI was +15.3% and Pet was +12.1%. Prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices consistently grew but the others had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices grew while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month except for 1 dip by Supplies. In May Products prices grew while Services slowed. In Jun/Jul this reversed. In Aug all but Services fell. In Sep/Oct this flipped. In Nov, all but Food & Vet fell. In Dec, Supplies & Vet  drove prices up. In Jan>Mar 24 Pet prices grew despite a few drops. In April, prices in all but Vet fell. In May, all but Food grew. In June, Products drove a lift. In July, all but Services fell.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices turned up Jan>Sep 23, dipped in Oct>Dec, then rose Jan>Jul 24, but 31.5% of the 22.4% increase in the 55 months since Dec 2019 happened from Jan>Jun 2022 – 10.9% of the time.
  • Pet Food – Prices were at Dec 19 levels from Apr 20>Sep 21. They grew & peaked in May 23. In Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose in Mar, fell Apr>May, grew in June, fell in July. 97% of the lift was in 22/23.
  • Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They then had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices and essentially stayed there until 22. They turned up in Jan and hit an all-time high, beating 2009. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct to a new record. Prices stabilized in Nov>Dec but grew in Jan>Feb 23. They fell in Mar, but set a new record in May. The rollercoaster continued with Dec>Feb lifts, Mar/Apr drops, May/Jun lifts, then a July drop.
  • Pet Services– Inflation is usually 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but with fewer outlets. Inflation grew in 21 with the biggest lift in Jan>Apr. Inflation was strong in 22 but prices got on a rollercoaster in Mar>Jun. They turned up Jul to Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug: Up, Sep>Dec: Down, Jan>Mar: Up, Apr: Down, May: Up, June: Down, July: Up.
  • Veterinary – Inflation has been consistent. Prices turned up in Mar 20 and grew through 21. A surge began in Dec 21 which put them above the overall CPI. In May 22 prices fell and stabilized in June causing them to fall below the CPI. However, prices rose again and despite some dips they have stayed above the CPI since July 22. In 23, prices grew Jan>May, stabilized Jun/Jul, fell in Aug, grew Sep>Dec, fell in Jan 24, grew Feb>May, fell in Jun>Jul.
  • Total Pet – Petflation is a sum of the segments. In Dec 21 the price surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in Dec, grew Jan>May 23 (peak), fell Jun>Aug, grew in Sep/Oct, then fell in Nov. In December prices turned up and grew through March 24 to a record high. Prices fell in April, rose in May & June (a new record) then fell in July but Petflation is just 2/3 of the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for July and compare it to last month, last year and to previous years. We will also show total inflation from 21>24 & 19>24. Petflation slowed to 1.9%, down from 2.0% in June, and it is now 34.5% below the National rate. In January, it was +52%. The chart will allow you to compare the inflation rates of 23>24 to 22>23 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. We’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were +0.1% from June and were +2.9% vs July 23, down from +3.0% last month because there was a bigger Jun>Jul price lift in 23. Grocery inflation remained stable at +1.1%. Only 4 had price increases from last month – Pet Services, Haircuts, Groceries and the CPI. There were 7 lifts in May & June . The national YOY monthly CPI rate of 2.9% is down from 3.0% and now below the 22>23 rate. It’s only 34% of 21>22. The 23>24 rate is below 22>23 for all but Pet Services & Medical Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred in all but 2 segments – Medical Services & Haircuts – both Services categories. Service Segments have generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 98% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were still recovering from a deflationary period. Services expenditures now account for 64.1% of the National CPI so they are very influential. Their current CPI is +4.9% while the CPI for Commodities is -0.4%. This clearly shows that Services are driving the current 2.9% inflation rate.

  • U.S. CPI– Prices are +0.1% from June. The YOY increase is 2.9%, down from 3.0%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 45+% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 3 consecutive drops and now 5 of 8 with drops – improving. The current rate is below 22>23 but the 21>24 rate is still +15.2%, 67.3% of the total inflation since 2019. Inflation was low in July 2021.
  • Pet Food– Prices are -0.03% vs June and -0.04% vs July 23, up from -0.2%. They are still significantly below the Food at Home inflation rate, +1.1%. The YOY drop of -0.04% is being measured against a time when prices were 22.9% above the 2019 level and the current decrease is still far less than the -0.7% drop from 2019 to 2020. The 2021>2024 inflation surge has now generated 100% of the total 22.7% inflation since 2019.
  • Food at Home – Prices are up 0.3% from June but the monthly YOY increase was stable at 1.1%. It is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.0% Inflation for this category since 2019 is 19.5% more than the national CPI but still in 4th place behind 3 Services expenditures. 68.1% of the inflation since 2019 occurred from 2021>24. This mirrors the national CPI, but we should note that Grocery prices began inflating in 2020>21 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 were down -0.8% from June and are only +0.2% vs July 2023. They have the lowest increase since 2019. As we noted, prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 95.3% of the total price increase since 2019. Prices reached an all-time high in October 2022 then deflated. 3 months of increases pushed them to a record high in Feb 23. Prices fell in March, rose in Apr/May to a new record, fell in Jun>Aug, grew Sep>Oct, fell in Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (new record), then fell in July.
  • Veterinary Services– Prices are -0.1% from June but +6.2% from 2023. They fell to 2nd place, behind Services, in the Pet Industry. However, they are the leader in the increase since 2019 with +37.6% and since 2021, +28.4%. For Veterinary, relatively high annual inflation is the norm. However, the rate has increased during the current surge, especially in 22 & 23. It is still high in 24, so 75.5% of the cumulative inflation since 2019 occurred from 2021>24.
  • 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. Prices fell -0.3% from June, but they stayed at +3.3% vs last year. Medical Services are not a big part of the current surge as only 49% of the 14.1% 2019>24 increase happened from 21>24.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021. In 2024 prices surged Jan>Mar dropped in April, rose in May, fell in June, then soared to +6.6% in July. Inflation peaked at +8.0% in March 23. Now, 68% of their total 19>24 inflation has occurred since 2021. In December, it was only 49%. They still have the 2nd highest 19>24 rate.
  • Haircuts/Other Personal Services – Prices are +0.1% from June and +4.5% from 23. 5 of the last 7 months have been 4.0+%. Inflation has been pretty consistent. Just 55% of the 19>24 inflation happened 21>24.
  • Total Pet– Petflation slowed to 1.9% from 2.0% in June but is still 78% less than the 22>23 rate and 34.5% less than the U.S. CPI. For July, 1.9% is 37.6% below the 3.1% average rate since 1997. Vs June, prices fell -0.1% as all but Non-Vet Services were lower. A Jun>Jul price decrease hasn’t happened since 2016 and only in 8 of the last 27 years, so this month’s data was a bit surprising. In terms of Petflation, 2024 appears to be actively moving back towards a more normal pattern. However, the path to get there may be unusual and there is still a ways to go.

Now, let’s look at the YTD numbers.

The inflation rate for 22>23 was the highest for 4 of 9 categories – All Pet – Pet Food, Services, Veterinary & Total Pet. The 23>24 rate is usually much lower than 22>23 for all but Medical Services. 21>22 still has the highest rate for Food at Home, the CPI, Pet Supplies & Haircuts (tie). The average annual national inflation in the 5 years since 2019  is 4.2%. Only 2 of the categories are below that rate – Medical Services (2.8%) and Pet Supplies (2.2%). It comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.4% or higher.

  • U.S. CPI – The 23>24 rate is 3.2%, the same as June, but also down 30% from 22>23 and 61% less than 21>22. It is also 24% below the average YOY increase from 2019>2024, but it’s still 45% more than the average annual increase from 2018>2021. 74% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
  • Pet Food – Ytd inflation is 1.1%, down from 1.3% in June and 92% less than the 22>23 rate. Now, it is also 85% lower than 21>22 and 10% below the average rate from 2018>2020. Pet Food has the highest 22>23 rate on the chart and remains in 2nd place in the 21>24 rates. Deflation in the 1st half of 2021 kept YTD prices low then prices surged in 2022 and especially in 2023. 95% of the inflation since 2019 occurred from 2021>24.
  • Food at Home – The inflation rate has slowed remarkably. At 1.1%, it is down over 85% from 22>23, 90% from 21>22 and 52% from 20>21. Also, it is even 48% lower than the average rate from 2018>20. It remains in 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 16%. You can see the impact of supply chain issues on the Grocery category as 75% of the inflation since 2019 occurred from 2021>24.
  • Pets & Pet Supplies – Prices increased Jan>Feb, fell Mar>Apr, rose May>Jun then fell in July. The 2024 inflation rate of 0.2% is only higher than the deflation in 19>20 & 20>21. Supplies have the lowest inflation since 2019. The only significant increases were 7.2% in 22 & 5.0% in 23. The 2021 deflation created a unique situation. Prices are up 11.3% from 2019 but 113% of this increase happened from 2021>24. Prices are up 12.8% from their 2021 “bottom”.
  • Veterinary Services – Inflation was high in 2019 and steadily grew until it took off in late 2022. The rate may have peaked in 2023, but it is still going strong at the start of 2024, +7.7%, the highest on the chart. They are also #1 in inflation since 2019 and since 2021. At +6.7%, they have the highest average annual inflation rate since 2019. It is 1.6 times higher than the National Average but 2.4 times higher than the Inflation average for Medical Services. Strong Inflation is the norm in Veterinary Services.
  • Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. Ytd it is 2.3%. In a non-pandemic year, “normal” is between 2.1>2.9%. We are still seeing the impact of 2023 when prices actually deflated (-0.3%). This was the only deflationary year since the US BLS began tracking this category in 1935.
  • Pet Services – After falling in late 2023, prices surged in 2024,except for drops in Apr & Jun. The 23>24 inflation rate of 5.5% is 2nd to Vet in the Pet Industry. It is 20% less than 22>23 and 8% below 21>22. However, it is still 1.7 times higher than the 2018>21 average rate. Pet Services is 2nd in 19>24 inflation but only 5th in inflation since 21.
  • Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. Ytd inflation is 4.4%, which is 17% below the 21 & 22 peak but 35% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
  • Total Pet – Ytd Petflation is 2.7%, down from 2.9%. It is 73% less than 22>23 but 19% higher than the 2018>21 average rate. However, it is still 16% below the CPI. Despite the May & June price lifts, Petflation has slowed in 24. This is primarily being driven by drops in Pet Food inflation but Ytd Supplies inflation is also low. Services prices set a new record in July but Vet prices continued to fall. The July drops all contributed to the decrease in the Ytd Pet CPI.

Petflation has definitely slowed in 24. July was 38% below the average for the month and 34.5% lower than the National CPI. This is about the same as it was back In 2021. One fact is often ignored in the headlines – Inflation is cumulative. Pet prices are 20.8% above 2021 and 25.0% higher than 2019. Those are big lifts. In fact, in July prices for Services set a new record while prices for Total Pet & all other segments are less than 0.8% below the highest in history. Only Supplies prices (+11.3%) are less than 24% higher than 2019. Since price/value is the biggest driver in consumer spending, inflation will affect the Pet Industry. Services will be the least impacted as it is driven by high income CUs. Veterinary will see a reduction in visit frequency. The product segments will see a more complex reaction. Supplies will likely see a reduction in purchase frequency and some Pet Parents may even downgrade their Pet Food. Products will see a strong movement to online purchasing and private label. We saw evidence of this at both GPE 24 at SZ 24 as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.