Petflation 2024 – August Update: Jumps up to +2.9% 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>Aug 24. Despite a 0.1% increase in prices from July, YOY inflation slowed in August to +2.5% from +2.9% in July. This was due to a big Jul>Aug price lift in 2023. Grocery prices fell -0.1% from July and inflation slowed to 0.9%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 18 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 fell below it from Apr>Jul 24. However, at 2.8% in August, it is again above the CPI, +12%. 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 August 22 to August 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 August, Pet prices were down -0.02% from July. The small price drop was entirely driven by Pet Food. All other segments were up.

In August 22, the CPI was +15.3% and Pet was +13.3%. 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 for all segments 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. In August, Food drove a small drop in Total Pet prices.

  • 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>Aug 24, but 31.4% of the 22.5% increase in the 56 months since Dec 2019 happened from Jan>Jun 2022 – 10.7% of the time.
  • Pet Food – Prices were at Dec 19 levels from Apr 20>Sep 21. They then started to grow & peaked in May 23. In Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose in Mar, fell Apr>May, grew in June, then fell in Jul>Aug. 96% 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 (another record high), a July drop and an August lift
  • 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 24: ↑Up, Apr: ↓Down, May: ↑Up, June: ↓Down, Jul>Aug: ↑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>24 prices grew Jan>May, stabilized Jun/Jul, fell in Aug, grew Sep>Dec, fell in Jan, grew Feb>May, fell Jun>Jul, then grew in August.
  • 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 record) then fell in Jul>Aug, but Petflation is again above the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for August and compare it to last month, last year and to previous years. We will also show total inflation from 21>24 & 19>24. Petflation rose to 2.8%, up from 1.9% in July, and it is now +12.0% above the National rate. Last month, it was -34.5%. 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 up 0.1% from July and were +2.5% vs August 23, down from +2.9% last month because there was a bigger Jul>Aug price lift in 23. Grocery inflation dropped to +0.9% from 1.1%. Only 3 had price decreases from last month – Pet Food, Total Pet and Groceries. There were 5 drops in July but only 2 in May & June. The national YOY monthly CPI rate of 2.5% is down from 2.9%. It is 32% below the 22>23 rate and 70% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies & 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 97% 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. Vs 2023, their current CPI is +4.8% while the CPI for Commodities is -1.2%. This clearly shows that Services are driving all of the current 2.5% inflation.

  • U.S. CPI– Prices are +0.1% from June to a new record high. The YOY increase is 2.5%, down from 2.9% because of a big price lift in 2023. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 25+% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 3 consecutive drops and now 6 of 9 with drops – improving. The current rate is below 22>23 but the 21>24 rate is still +15.1%, 66.5% of the total inflation since 2019. Inflation was starting in August 2021.
  • Pet Food– Prices are -0.4% vs July and -0.4% vs August 23, down from -0.04%. They are still significantly below the Food at Home inflation rate, +0.9%. The YOY drop of -0.4% is being measured against a time when prices were 22.7% above the 2019 level and the current decrease is only 2/3 of the -0.6% drop from 2019 to 2020. The 2021>2024 inflation surge has now generated 100+% of the 22.3% inflation since 2019. 2021 was the new “bottom”.
  • Food at Home – Prices are down -0.1% from July and the monthly YOY increase fell from 1.1% to 0.9%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.1% Inflation for this category since 2019 is 19.4% more than the national CPI but still in 4th place behind 3 Services expenditures. 66.1% 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 +0.2% from July and inflation grew to +3.1% vs Aug 23 but they have the lowest rate vs 2019. As we have noted, prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 85.3% of the total price increase since 2019. Prices reached an all-time high in October 2022 then deflated. 3 monthly 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 (record), fell in July, then rose in August.
  • Veterinary Services– Prices are +0.1% from July and +7.6% from 2023. They took the top spot in inflation vs 23 and are still the leader in the increase since 2019 with +37.4% and since 2021, +27.3%. 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 75.7% 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 rose +0.1% from July, but inflation vs last year slowed to +3.2% from +3.3%. Medical Services are not a big part of the current surge as only 49.6% of the 13.5% 2019>24 increase happened from 21>24.
  • Pet Services – Inflation slowed in 2020 but began to grow in 21. In 24 prices surged Jan>Mar, fell in April, rose in May, fell in June, then rose Jul>Aug. Inflation peaked at +8.0% in March 23. In August, it was 6.3%, down from 6.6%. 67% of their total 19>24 inflation has occurred since 21. In Dec 23, it was only 49%. They have the 2nd highest 19>24 rate.
  • Haircuts/Other Personal Services – Prices are +0.6% from July and +4.7% from 23. 6 of the last 8 months have been 4.0+%. Inflation has been pretty consistent. Just 54.6% of the 19>24 inflation happened 21>24.
  • Total Pet– Petflation grew to 2.8% from 1.9% in July due to a big price drop in 23. It is still 58% less than the 22>23 rate but now 12% more than the U.S. CPI. 2.8% is 9.7% below the 3.1% average August rate since 1997. Vs July, prices fell -0.02%, driven entirely by Pet Food. The biggest Jul>Aug price decrease was in 23 but a drop has occurred in only 6 of the last 27 years, so this month’s data was a bit surprising. In terms of Petflation, 2024 appears to be moving back towards a more normal pattern. However, the path to get there will 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. 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 3.1%, down from 3.2% in July. It is also down 31% from 22>23, 63% less than 21>22 and 26% below the average YOY increase from 2019>2024. However, it’s still 37% 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 0.9%, down from 1.1% in July and 93% less than the 22>23 rate. Now, it is also 88% lower than 21>22 and 18% below the average rate from 2018>2021. 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. 96% of the inflation since 2019 occurred from 2021>24.
  • Food at Home – The inflation rate has slowed remarkably. At 1.1%, it is down 84% 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 is tied for 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 17%. You can see the impact of supply chain issues on the Grocery category as 74% of the inflation since 2019 occurred from 2021>24.
  • Pets & Pet Supplies – Prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, then rose in August. Inflation in 24 is 0.5% and 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 & 4.3% in 23. The 2021 deflation created an unusual situation. Prices are up 11.4% from 2019 but 109% of this increase happened from 2021>24. Prices are up 12.4% 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 in 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 2.4%. 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 5.6% is 2nd to Veterinary on the chart. It is 20% less than 22>23 and 7% 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 4th 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 19% below its 21 peak, but 33% 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%, the same as July. It is 72% less than 22>23 but 17% higher than the 2018>21 average rate. Plus, YTD it is still 13% below the CPI. Despite the YOY lift in August, 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 August and Vet prices grew. The mixture of patterns produced the stability of the August Ytd Pet CPI.

Petflation has definitely slowed in 24 but it hit the pause button in August. At 2.8%, August was 9.7% below the average for the month but is now 12% higher than the National CPI. We continue to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 20.7% above 2021 and 25.2% higher than 2019. Those are big lifts. In fact, in August prices for Pet Services set a new record while prices for Total Pet & all other pet segments are less than 0.8% below the highest in history. Only Pet Supplies prices (+11.6%) are less than 22% 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 and SZ 24 as a huge # of exhibitors offered OEM services. Strong, cumulative inflation has a widespread impact.

2023 Top 100 U.S. Retailers – Sales: $2.93 Trillion, Up 3.0%; 165,493 Stores with Pet Products……plus the Internet!

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The U.S. Retail market reached $8.29 Trillion in 2023 from all channels – Auto Dealers, Supermarkets, Restaurants, Online retailers and even Pet Stores. The $273B, +3.4% lift was down significantly from the pandemic recovery lift of +$1.14T, +18.4% in 2021. However, the Total Retail market is now $2.12T, 34.3% ahead of 2019. That’s a strong annual growth rate of +7.7%. (Data courtesy of the Census Bureau’s monthly retail trade report.)

In this report we will focus on the top 100 Retailers in the U.S. Market. The base data on the Top 100 comes from Kantar Research and was published by the National Retail Federation (NRF). The historical data for some companies that weren’t in the Top 100 all years from 2019>2023 was gathered from other reliable sources. In 2020, Restaurants were removed from the list and only Convenience stores sales for Gas Stations were included. I adjusted the 2019 list to reflect this change. This change means that the Top 100 now only includes Relevant Retail companies. The Top 100 account for 35.3% of the total market. This share peaked at 39.0% during the 2020 pandemic and has slowly declined since then. However, the Top 100 are still the “Retail Elite”. The vast majority of the group also stock and sell a lot of Pet Products so their progress is critically important to the Pet Industry. Let’s get started in our analysis. The report does contain a lot of data, but we’ll break it up into smaller pieces to make it more digestible.

We will begin our report with an overview chart of the 2019>2023 annual sales history for major segments of the Retail Marketplace. The U.S. Retail market strongly recovered from the 2020 pandemic trauma and the resurgence became widespread across most channels. Our regular retail sales reports have shown that different defined retail channels often took a different path from 2019 to 2021. In the Spring of 2021 and throughout 2022 the retail market faced a new challenge – strong inflation. The YOY price increases were the largest in decades, even reaching double digits in October of 2021 (stayed for 11 months). The high rate didn’t start to slow until the July of 2022. Although the increase rate has slowed, the retail market is now feeling the impact of high cumulative inflation. The Top 100 analysis allows us to see if the company revenue size was a factor in their overall pandemic/price journey from 2019>2023. The following chart shows the annual sales and market share as well as the changes in both for large retail subgroups that are based upon the amount of their annual revenue. Note: In comments we’ll show Avg Growth Rates – Actual & Real (Inflation Related)

  • The Total Retail Market grew $273B, +3.4% in 2023. That is far less than the $1.14T, +18.4% in 2021 and even below pre-pandemic years: 2019, 3.6%; 2018, 4.9%; 2017, 4.3%. However, the average growth rate from 2019>23 is 7.7%, which is almost double the 2016>19 rate of 3.9%. Factoring in inflation, Real 19>23 growth was +2.7%, exactly equal to 16>19. The impact of cumulative inflation – smaller sales increases and only 35% of 19>23 growth is real.
  • The “Non-Relevant” Retail Group (Restaurants, Auto Dlrs, Gas Stations) was hit hardest by the pandemic as sales fell -9.6% in 2020. They had a strong recovery as 20>22 sales grew $932B, for an average 19>22 growth rate of 8.8%. In 23 the increase slowed to 2.6%. High inflation was a factor for all groups. Gas: +34%; Auto: +28%; Restaurants: +23%
  • Relevant Retail was the hero of the pandemic as they kept Total Retail positive in 2020. Their sales surged in the 2021 recovery then radically slowed in 22 (7.1%) & 23 (3.9%). They were still up $192B producing an average growth rate since 2019 of +8.0%. Their Real growth rate (considering inflation) was +4.0%. Their share of Total Retail has stabilized but is down 3.3% from its peak in 2020. The story is a bit more complex. Let’s drill deeper into this group.
  • The Top 100 Retailers make up 57.5% of Relevant Retail and 35.3% of Total Retail. Sales have grown every year since 2019 but slowed markedly in 23. Their market share has fallen since peaking in 2020 for Relevant Retail and 2019 for Total Retail. Their avg growth since 2019 is +6.1%, but Real Growth is only +2.7%. Only 44.3% of their growth is real.
  • The biggest subgroup in $ales in the Top 100 is the Top 10 which accounts for 59.3% of the Top 100’s revenue, up from 55% in 2019. This group has been unchanged since 2015 and consists of Amazon, plus truly essential brick ‘n mortar retailers. Their biggest sales surge occurred in 2020 which was their peak in Retail market share. Their growth slowed in 23 but their average growth rate is +8.1%. Real growth was +4.1% – 50.6%.
  • The Retailers ranked from #11 to #100 change slightly every year. Their sales in 2023 ranged from $4.1B to $69B and they accounted for 40.7% of the Top 100’s revenue. They have an unusual sales pattern in that their $46B decrease in 2020 is the only negative sales on the chart outside of the big drop by Rest/Auto/Gas. They did have a strong 10.7% increase in 2021 but that fell to 6.1% in 22 & 1.9% in 23. They have also lost market share in Total & Relevant Retail every year since 2019 but are still a big part of U.S. Retail. Avg 19>23 Growth: +3.4%; Real: 0.9% – only 26.5%.
  • The Relevant Retailers outside of the Top 100 don’t get a lot of “press” but maybe they should. They currently account for 42.5% of Relevant Retail $ and 26.2% of Total Retail. They had the biggest percentage increase of any Relevant Retail subgroup overall and in all years but 2020 (2nd). Their increase since 2019 is +10.9%. Real: +6.8%, the best numbers of any group on the chart. While this performance is amazing, perhaps the most important fact is that they delivered 60% of Relevant Retail’s sales increase in 2020 and even 55% of the lift from 2019>2023.

There is no doubt that the big retailers are critical to the success of the U.S. Retail Market. However, there are sometimes “hidden heroes” that should be noted.

The Top 100 outperformed Total Retail in 2020 but not in 2021>2023. In fact, the sales growth since 2019 trails Total Retail, Relevant Retail and even Rest/Auto/Gas. It still generates 35.3% of Total U.S. Retail $ so it is still very important. We also should remember that the Top 100 is really a contest with a changing list of winners. Companies drop out and new ones are added. This can be the result of mergers, acquisitions, surging or slumping sales or even a corporate restructuring. In 2023. Overstock.com gained the rights for online sales from Bed, Bath & Beyond. Only 2 were new:

  • Overstock.com (Home Gds)
  • Save Mart (Supermarket) – returns after dropping off in 2022

To make room, 2 companies dropped off the list. Neither was a surprise.

  • Barnes & Noble (Book Store) – Category now gone from list
  • Office Depot (Office Supplies) – Only 1 left on the list.

I think that we now have a good overview of U.S. Retail and the Top 100 so let’s ask and answer a very relevant question. How many Top 100 companies are buying and selling Pet Products? This will reinforce that Pets have become an integral part of the American Household and how fierce that the competition for the Pet Parents’ $ has become.

  • We should note that the data in the chart only reflects the performance of the companies in the 2023 list since 2019 and is not being compared to the Top 100 list of companies from prior years
  • 87 are again selling some Pet Products in stores and/or online. There is 1 more in the online only segment due to the addition of Overstock.com to the list. Note: 87 is 7 more companies than the 1st “official” all Relevant Retail Top 100 list in 2020.
    • Their Total Retail Sales of all products is $2.83 Trillion which is…
      • 96.6% of the total business for the Top 100
      • 55.5% of Relevant Retail
      • 34.1% of the Total Retail market
    • 72 Cos., with $2.65T in sales sell pet products off the retail shelf in 165,493 stores – 12,000 more than 2020.
      • In 2023, the current Top 100 companies made no changes in how they handle pet products.
      • As you can see by the growth in both sales and store count since 2019, “in store” is still the best way to sell pet.
    • Online only is another story and the story gets complicated.
      • Amazon includes Whole Foods, which has stores in 45 states so the Amazon $ are in the “Pet in Store” numbers.
      • 1 New Retailer in the 2023 list (Overstock.com) is online only. This group had decreased sales and closed stores in 2020. 21 & 22 brought a rebound in both areas but the sales lift slowed in 23. They still lead Non-Pet in the 19>23 $ lift.
  • Some non-pet specialty retailers like Lulumon and Signet have had extraordinarily strong post pandemic growth. However, the growth in the non-pet group has slowed in 2022 and fell -2.7% in 2023. They have also closed 4.5% of their stores, which is now thankfully reversing. Perhaps, more of them will see Pet as a new growth opportunity.

The pandemic caused our Pets to become an even more important part of our households. They are truly family. Pet products have long been an integral part of the strongest retailers and are now even more widespread across the entire U.S. marketplace. Of the Top 100, 165,493 stores carry at least some pet items at retail. However, there are thousands of additional “pet” outlets including 15,000 Grocery Stores, 10,000 Pet Stores, 16,000 Vet Clinics, 6,000 Pet Services businesses and more. Pet Products are on the shelf in over 215,000 U.S. brick ‘n mortar stores… plus the internet. Pet Products have become part of the new “normal” for the majority of U.S. Retailers.

Before we analyze the whole Top 100 list in greater detail let’s take a quick look at the Top 10 retailers in the U.S.

Except for changes in rank, this group has been incredibly stable. The list has been the same since 2013, with one slight qualification. In 2015 Albertsons purchased Safeway. The new Albertsons/Safeway group replaced the stand-alone Safeway company in the list. We have again included the average annual 19>23 growth rates – both Actual & Real (Inflation was factored in using specifically targeted CPIs) Now let’s get into the numbers.

  • Their Total Retail Sales were $1.74 Trillion which is:
    • 59.3% of Top 100 $ales, slightly above the previous 2020 peak (58.9%) and 4.3% more than 55% in 2019.
    • 34.1% of Relevant Retail, equal to 21 & 22 but down from 35.5 in 2020.
    • 20.9% of Total U.S. Retail $, equal to 22, down from 21.2% in 21 and 23.0% in 20, but above 20.6% in 2019.
  • In ranking, there was only 1 change. CVS & Target swapped places.
  • Sales vs 22 are only down for Home Depot, Target & Lowes. All are up vs 19. The biggest growth vs 21 & 19 came from Amazon. In average growth, 4 have rates over 8%. The group averages +8.1% with +4.1% (51%) being real.
  • Driven by Drug, Store count turned down -1.4% vs 22. It is still down vs 19 for 4 companies and -1.5% for the group.

Now we’ll look at the detailed list of the top 100. It is sorted by channel groups with subtotals in key columns. The data only reflects the situation for the current 2023 Top 100 Retailers. Retailers have slightly changed in some groups through the years but there has been very little difference in group share. CPI Note: To better reflect their “real” product sales, I used a specific CPI rate for each retailer. These ranged from individual expenditures, like Alcohol at Home for Total Wine & More to specially created targeted aggregates for Superstores/Clubs. For the group, the individual inflation results were then combined to more accurately reflect the group price changes .  There is not a lot of highlighting, but:

  • Pet Columns ’23 & ‘22 – a “1” with an orange highlight indicates that products are only sold online.
  • Rank Columns – 2023 changes in rank from the 2022 list are highlighted as follows:
    • Up 3-5 spots = Lt Blue; Up 6 or more = Green
    • Down 3-5 Spots = Yellow; Down 6 or more = Pink

Let’s get started. Remember, online $ are included in the sales of all companies.

 Note:(*) in the 2019 columns of some companies means the 2019 base was estimated from other sources.

Observations

  • Alcohol Retailers first made the list in 2020 as consumers increased dining at home. Strong growth continues.
  • Apparel – They were hit hard by the pandemic, but had a strong recovery in 2021. The increase slowed to 1.9% in 2022 but came back strong in 2023, +6.5%. 6 companies had sales increases over 9% from 2022. Foot Locker had the only major decrease, -18.1%. Group Store count is up vs 22 (+2.6%) and vs 19 (+4.4%). The average group sales increase was Actual: +5.7%; Real: +4.4% (77%). The category has fewer companies than in 2021 but more than in 2019.
  • Auto – This group is unchanged from 2019. Their growth slowed a little in 22 & 23 but the only negative for this group is that Advance Auto’s store count is down -1.4% from 2019. Group Avg Growth: +9.0%; Real: +3.4%. (38%).
  • Book Stores – Barnes & Noble dropped off so like 2019 & 2020 no Book Stores are in the Top 100.
  • Commissary/Exchanges – They were on hold from 2019>22. Both Group Sales & Store Count grew in 2023 which pushed their Avg Actual Sales to +1.7%. However, their Real Sales Avg is -2.1%.
  • Convenience Stores – Sales are down in 23 due to 7-Eleven. Their 2022 acquisition of Speedway fueled most of the group’s 19>23 growth. The group’s Avg Actual Sales change: +5.4%;Real: -0.4%, due to strong inflation.
  • The decline in Department Stores was accelerated by the pandemic. Sales in the category grew in 22 because of the addition of Neiman Marcus. Neiman Marcus’ sales are up again in 2023. Dillard’s & Neiman Marcus have the only significant actual growth since 19. Real growth is down for all. In fact, all group measurements are negative. J.C. Penny, a hallmark in the department store channel, has by far the worst performance.
  • Drug Stores – Rite Aid filed for bankruptcy and have the only sales drop vs 22. All have been closing stores since 2019 but only Good Neighbor has lower sales. The group avg sales from 2019>23 are Actual: +2.9%; Real: + 1.4% (48% real growth). CVS has the strongest growth, but it is primarily due to acquisitions.

  • Electronics/Entertainment – Sales vs 22 fell for all but Amazon but their increase was big enough to turn the group positive. Store closures continued, especially for electronics retailers.
    • Amazon Retail growth increased in 23 but is still only 49% of their average 19>23 growth. However, 81% is Real.
    • 3 were down vs 2019 with Qurate having the worst performance. Avg Actual: -6.7%; Real: -9.1%.
    • All 5 Electronics stores were down vs 2022 but 3 were up vs 2019. They continue to close stores. However, strong deflation has pushed real sales significantly up so only Dell is “really” down vs 2019.
    • Group avg growth, Actual: +9.2%; Real: +10.3%. Deflation in electronics was strong enough to impact the group.
  • Farm– Tractor Supply growth slowed from 11.4% to 3.4%. Avg Actual: +14.9%; Real: +8.6% (58%). Plus, more stores.
  • Hobby & Crafts– Hobby Lobby is by far the best performer. In fact, Michael’s sales are actually down vs 22. However, both continue to add stores. Avg Group Growth: 4.9%; Real: +4.7%. 96% is real.
  • Home Goods – Overstock acquired the rights to Bed, Bath & Beyond’s online sales. They entered the Top 100 and their big increase is the only reason the group is up vs 22. Vs 2019, only Amway is down. Store closures slowed in 23, -0.1%, but are -2.0% vs 19. Group Avg Actual growth: +5.9%; Real: +2.5% (42%).
  • Home Improvement/Hardware – Sales vs last year turned negative in 23. 4 of 7 were down but Home Depot and Lowes fueled the group drop. Store openings slowed in 23 but are still widespread.
    • Sales vs 2019 is a different story. All but Menards (+8.4%) are up 21+%. Group store growth is also high, +5.8%.
    • Avg Actual Growth: +7.8%; Real: +1.9% (Only 24% “Real” growth)
  • Jewelry – Signet sales plummeted, and they started closing stores again. Avg: 11.6%; Real: 8.0% (69%).
  • Mass Merchants have 3 of the 7 largest volume retailers in America – Wal-Mart, Costco and Target. However, the value and selection offered by the whole group has increased its importance to consumers due to the pandemic.
    • In 2023 Wal-Mart $ were up 6.9%, below both the 8.7% in 2022 and their average increase in sales: +7.5%. Their business is driven by SuperCenters. Groceries drove up inflation so their real sales avg increase was 3.5%, only 47%. After a small increase last year, their store count is down vs 2022 and -0.6% from 2019.
    • Costco’s 2023 $ increase was +6.8%, down radically from +16.9% in 2022 and 43% less than their 11.9% average. Average real growth was 7.8% (66%). They continue to open new stores and are now +8.3% vs 2019.
    • Target – After 6 consecutive annual sales increases, sales fell -1.6% in 2023. Their growth peaked at +13.2% in 2021. Avg Growth: 8.2%; Real Growth: 4.2%, 51%. They opened a few more supercenters in 2023 and their store count is now up 4.7% from 2019. They also have added more fresh groceries to their discount stores.
    • Meijer’s $ales were +3.7% from 22, down from 5.6% in 21>22 and below their avg of 5.5%. Their avg real growth is 1.7%, only 31%. They continue to open stores, +1.9% from 22 and +8.1% since 2019.
    • BJ’s growth fell from +22.8% in 22 to +4.6% in 23. However, they are still the growth leader vs 2019, +62.5% in sales and +11.5% in stores. Avg growth: +12.9%; Real: +8.7%, 67%. We should note that Costco ranks 2nd in both comparisons vs 2019 and Sam’s Club is a significant share of Wal-Mart’s total sales. Mass Merchants are the biggest category and Club stores have moved to the retail forefront.

  • Office Supply Stores – This channel continues its consistent decline as Consumers maintain their move to online ordering of these products. Office Depot dropped off of the list, leaving only Staples. All Staples comparisons are negative, and their Avg Growth is: -2.4%; Real: -8.7%. They also have -10.1% fewer stores than in 2019.
  • Pet Stores growth in 23 was +6.0%, down from +7.3% in 21>22 and a big drop from their 21 peak, +22.3%, but they are up +54.2% from 2019. Most of the growth in all measurements is coming from Chewy’s online sales.
    • As you know Chewy and PetSmart numbers are reported individually as they are separate companies.
    • With the strong consumer movement to online purchasing, Chewy is still the big story in this channel. They have the most sales. Their 22>23 increase was +10.4%, down from 13.6% in 22 and +24.4% in 21, but 74% of the Pet Store group’s 2023 $ increase. Their 81.6% sales increase vs 2019 is also double that of the retail outlets. Avg Growth rate: +16.1%; Real: +11.4%. 71% of their big increase is real.
    • PetSmart’s 22>23 growth was only +2.0%, less than +2.2% in 21>22 and 93% below +23.1% in 20>21. Sales are still up +35.1% from 2019 and they continue to expand their retail footprint with 3.9% more stores than in 2019. Their average growth rate is +7.8%. Real growth is +3.5%, 45%. This is far below Chewy’s, but not too bad.
    • Petco’s growth since 2019, +40.7% is slightly ahead of PetSmart. At +3.7%, it was slightly below +4.1% in 21>22 and down a lot from +17.6% in 20>21. Avg growth: +8.9%; Real: +4.5%, 51%. The biggest difference from PetSmart is that Petco has cut back on their retail stores, even in 2023. Their store count is now down -8.4% from 2019.
  • Small Format Value Stores – These stores offer value and convenience, but there are 2 types – Big Lots & $ Stores
    • Group sales increased +3.3%, down from +7.4% in 22. Avg 19>23 Growth: +6.9%; Real: +2.9%, 42%.
    • Dollar General & Dollar Tree were responsible for all of the group’s growth in both $ and stores. Vs 2019, Dollar General was the leader in both areas. Avg Growth: +8.7%; Real: +4.6%, 53%. Dollar Tree was the growth leader in 23 with +$2.3B, +8.3% vs 22. Their 19>23 Avg Growth was +6.7%; Real growth was +2.8%, 42%.
    • Big Lots’ $ fell -13.6% from 22. All of their comparisons vs 22 & 19 are negative. Avg Growth: -2.9%; Real: -6.6%
  • Sporting Goods – Sales vs 22: -0.2%, peaked at +13.6% in 21. Camping World & Academy were down vs 22 but all are up vs 19. The group’s store count is down due to Dick’s and Camping World. Avg $ Growth: +9.1%; Real: +4.7%, 52%.
    • Dick’s has the best $ performance vs 22 & 19, despite closing 1.9% of their stores. Avg: 10.2%; Real: 6.9%, 68%.
    • Camping World & Academy were both down vs 22 but up 22+% vs 2019. Academy has opened 8.9% more stores
    • Bass Pro has the worst performance. They closed 3.1% of their stores in 20&21. Avg Growth: +2.5%; Real: -1.9%.
  • Supermarkets – There was less turmoil than usual in this category – only minor rank changes, no drop outs and Save Mart returned to the list. Avg Growth: +6.3%; Real: 0.5%, only 8%. Store count +0.3% from 2019.
    • All but Weis were up vs 2022 in $ and only Save-A-Lot and Southeastern were down vs 2019.
    • Of 24 companies, only 5 cut back on stores in 2023 and 8 have fewer stores than in 2019.
    • Sales continue to increase but you see a major impact of strong inflation – only 8% of the 19>23 growth is real.
    • With $567B in sales from 17.5K stores, all carrying Pet Products, this group is essential both to the Retail Market and the Pet Industry.

Wrapping it up!

This report is focused on 2023 but we can also see the continued evolution of the Retail Marketplace. In 2020 many non-essential retailers were hit with restrictions and closures. On the plus side, consumers turned their focus to essentials and their homes. This helped drive incredible growth in many retail channels.

In 2021 the Total Retail market moved into a full recovery with spectacular growth. Many channels showed a strong sales rebound from 2020. Others built upon their pandemic success while many returned to a more normal growth pattern. However, a few continued to decline. The Top 100 companies had participants in all of these patterns.

In 2022 we were hit by strong inflation in many categories which slowed both actual and real growth. Inflation slowed in 23 but we still see its cumulative impact in the reduced annual increases. Plus, sales of 33 Top 100 retailers actually fell vs 2022.

The Top 100 is a contest with the winners changing slightly every year. It is a critical part of the U.S. Market, accounting for almost 60% of Relevant Retail Revenue and 35+% of Total Retail. Sales have increased annually but the Top 100’s share of Total Retail peaked in 2020 and in 2019 for Relevant Retail and has steadily declined. The Top 10 has had stronger annual growth but sales in the #11>100 group actually fell in 2020 and their 19>23 increase is only 40% of the Top 10’s lift. However, we should remember that we found a new hero in 2021 – Relevant Retail, not in the Top 100. The 19>23 Sales by these smaller guys are +51.5%, 42% more than the Top 10. Their performance continues to be amazing.

Pet Products are an important part of the success of the Top 100. 87 companies (96.6% of $) sell Pet items in 165K stores and/or online. The 72 companies that stock pet products in their stores generated $2.65T in total sales. How much was from pet? Let’s “Do the math”. If we take out the $14B done by Top 100 Pet stores and the remaining companies generated only 1.7% of their sales from Pet, we’re looking at $45B in Pet Products sales from 70 non-pet sources! (The 1.7% Pet share is based on the Economic Census.) If you add Pet Stores & Chewy into the $, Pet Products sales for the Top 100 are $68.4B. The APPA reported $96.4B in Pet Products sales for 23. That means 70 mass market retailers accounted for 46.7% of all the Pet Products sold in the U.S. and 73 Top 100 companies generated 71.0%. Pet Products are widespread in the retail market but the $ are concentrated. Pet Industry participants should monitor the Top 100.

Retail sales increases slowed in 2023 as cumulative inflation became a major factor. The situation is still evolving but the Top 100 will always be a critical part of U.S. Retail. I hope that this detailed look helped put this group into a better perspective.