Retail Channel $ Update – September Monthly & October Advance

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In October, YOY Commodities’ deflation decreased to -1.0% from -1.3%. Although deflating, high cumulative inflation vs 21 can still impact consumer spending and slow actual $ growth.  However, in October, Total Retail sales, as expected (90% of years since 92) were +4.6% vs 23, equal to the average lift. Relevant Retail was +5.5%, 21% above average. That looks good but there is still a long road to full 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 September Monthly Report and then go to the October Advance Report. Our focus is comparing to last year but also 21 & 19. 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 September Monthly. All were down from August but there were only 3 actual sales drops vs 23 & 21. We should note that Gas Stations are still selling less product than in 2019. Also, Relevant Retail is all positive again. They have been all positive in 8 of the last 11 months and now in 4 of the last 5. ($ are Not Seasonally Adjusted)

The September Monthly is $1.7B more than the Advance report. Restaurants: +$0.2B; Auto: +$0.2B; Gas Stations: +$0.3B; Relevant Retail: +$1.1B. As expected, $ales were down vs August for all. An Aug>Sep decrease in Total Retail  has happened every year since 1992. However, the -6.9% drop was 11% more than the -6.2% avg. There were only 3 drops in actual sales – Monthly & Ytd vs 23 for Gas Stations and Auto Monthly vs 23. There were 6 “real” sales drops, up from 3 last month. Total & Relevant Retail were all positive. 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 September in the Stacked Bar Graph Format

Overall– 10 of 11 were down from August. vs Sep 23, 7 were actually and “really” up. Vs Sep 21, 8 were up but only 5 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 31.2% since 2019. Prices for the Bldg/Matl group have inflated 14.2% since 2021 which is having an impact. HomeCtr/Hdwe are only actually down Ytd vs 23, but Farm stores are only actually up vs Sep 21 & Ytd vs 19. Only the “real” measurements vs 21 are negative for Home/Hdwe. For Farm Stores all “real” numbers but vs 19 are negative. Plus, only 25% of the Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.4%, Real: 1.3%; Farm: 6.4%, 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 81% of the rate for Drug/Med products. Drug Stores are positive in all measurements and 64% of their 2019>24 growth is real. Supermarkets’ actual $ are up in all measurements and they are only “really” down vs 2021. However, only 5% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.2%, Real: +0.3%; Drug Stores: +5.1%, Real: +3.4%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are down -17.7% from August and their only positives are actual & real Ytd vs 19. Prices are still deflating, -2.3% 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 34.6% lift since 19 is real. Avg 19>24 Growth Rate is: +6.1%; Real: +3.7%.
  • Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs & $ stores. On the other hand, Discount Dept Stores were only actually up Ytd vs 21 & 19. All real measurements are negative so none of their growth since 2019 is real. The other channels average 45% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.1%, Real: 2.9%; $/Value Strs: +6.4%, Real: +3.1%; Disc. Dept. Strs: +1.6%, Real: -0.4%.
  • Office, Gift & Souvenir Stores – Sales were down -10.8% from August. This set the stage for a bad month. They are now only actually up Ytd vs 21 and all of their real sales numbers are negative. Their recovery started late, and their progress has stalled again after a minor restart in August. Avg Growth Rate: -0.01%, Real: -2.0%
  • Internet/Mail Order – Sales are -2.5% from August but set a new monthly record of $106.5B. All measurements are positive, but their Ytd growth, +9.6%, is still only 60% of their average since 2019. However, 81.9% of their 111.0% growth since 2019 is real. Avg Growth: +16.1%, Real: +13.8%. As expected, they are by far the growth leader 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 24, grew in Feb>May, then fell in Jun>Sep. However, all measurements are positive. They are still in 2nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 73% of their 55.1% growth since 2019 is real. Average 19>24 Growth: +9.2%, Real: +7.0%.

September had its usual drop as 10 small channels were down vs August. The Total Retail YOY lift was -95% below Avg but 7 of 11 smaller channels and 2 of 4 big groups were up vs Sep 23. Prices are deflating in 7 channels, but cumulative inflation still matters. Many sales lifts are lower as 6 of 11 channels were really down vs Sep 21. The Retail Recovery has slowed again. The commodities CPI is still deflating but rose to -1.0% in October. Let’s see if it impacts Retail $ales.

Sep>Oct sales were up for all. An Sep>Oct Total Retail lift has happened in 90% of the years since 1992 and the 4.6% lift is equal to the average. All but 2 actual YOY $ measurements are positive. The drops are from Gas Stations – Monthly & Ytd vs 23. The Total Retail lift of 4.6% vs 23 was the 2nd biggest increase in 24 (+6.3% in Feb). The Relevant Retail lift vs Oct 23 (+5.5%) was 21% above their 92>23 average. The Auto lift was 45% above average, but Restaurants were -19% below their average. Inflation may be becoming less of a factor. The CPI for all commodities rose to -1.0% but it is down to 7.9% from 9.7% vs 21. There is more “real” good news. In September, 5 measurements were “really” down vs 23 & 21. In October, only 2 were really down. Restaurants, Total & Relevant Retail were all positive. After 2 months with a negative, Relevant Retail has been all positive in 5 of the last 6 months.

Overall – Inflation Reality – For Total Retail, deflation slowed to -1.0% but YOY sales grew 4.6% vs 23. For Restaurants, inflation remains high, +3.7% but they are again up in all comparisons. Gas prices fell but that group is still in turmoil. Auto prices rose but are still deflating. Their sales grew vs Oct 23 and are really down in only 1 measurement. Inflation fell from 0.1% to -0.2% for Relevant Retail and sales are all positive. Their progress continues and may be growing.

Total Retail – Since June 20, every month but April 23 & June 24 has set a monthly sales record. In 2023>24, 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 Jul>Aug, down in Sep, up in Oct. Prices are now -1.0%, and YOY sales are up as expected. Ytd Sales are up 2.8% vs 23, only 41% of their avg 19>24 growth. Plus, only 39% of the 19>24 growth is real. YOY pricing in Total Retail is still deflating but we see its cumulative impact in Ytd sales. Growth: 23>24: 2.8%; 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 set another monthly sales record in October. They have the biggest Ytd increases vs 23, 21 & 19 and are again all “positive”. Inflation slowed to 3.7% in October but is still +18.6% vs 21 and +27.1% vs 19. Only 35.2% of their 48.9% growth since 19 is real and they remain 3rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 5.0%; Avg 19>24:+8.3%, Real: +3.3%. 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 worse, down -8.2% vs 21 and -8.9% vs 19. 2023 started a true sales rollercoaster but the $ set a new record, $1.595T. $ fell in Jan 24, grew Feb>Mar, fell Apr, grew May, fell June, grew Jul>Aug, fell Sep, grew in Oct. All but Real Ytd $ vs 21 are positive, but only 17.7% of 19>24 growth is real. Growth: 1.5%; 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 $583B3. 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 24. In Mar>May they grew, fell in June, rose in July, then fell in Aug>Oct. Actual $ are down monthly & Ytd vs 23. Real sales are down Ytd vs 21 and 19. Growth: -2.8%; Avg 19>24: +4.4%, Real: -0.8%.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, rose in Jul>Aug, fell in Sep, then rose in Oct. The Oct. YOY lift of 5.5% is 21% above their 92>23 avg and all measurements are still positive. Also, 51% of their 41.4% 19>24 growth is real – #1 in performance. Growth: 3.5%; Avg 19>24: +7.2%, Real: +3.9%. This is where America shops. They ended 23 and began 24 strong. In Mar>Apr recovery slowed. It got better in May, worsened in June, rebounded in July, stabilized in Aug, slowed in Sep, grew in Oct.

Inflation is still low, but the cumulative impact is still there. YOY Sales changes vs 23 are improving but overall, progress is still slow. Some changes from September are significant. The Actual drops decreased from 4 to 2 and real drops fell from 5 to 2. Restaurants are back on track and Auto is improving but Gas Stations remain in turmoil. Relevant Retail’s YOY Sales increase was 21% above avg and all measurements are positive for the 5th  time in the last 6 months. Total Retail’s lift was also strong and they are all positive too. After a bad September, the recovery is strongly restarting.

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

  • Relevant Retail: Growth: +3.5%; Avg: +7.2%, Real: +3.9%. All were up from Sep. Vs Oct 23: 9 were up, Real: 11, Vs Oct 21: 7 were up, Real: 6. Vs 19: Only Dept Stores were actually & really down. Furnishing stores were also really down.
  • All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are up 5.8% from September but except for vs Oct 23, their actual and real numbers are all negative. They are even actually & really down vs 2019. Growth: -1.2%; Avg 19>24: -0.1%, Real: -2.1%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are +7.1% from Sep, and they are positive in all measurements. However, only 44.8% of their 34.6% 19>24 lift is real – inflation’s impact. Ytd growth is below Avg for the 7th 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 +4.0% from Sep and positive in all 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: 2.0%; Avg 19>24: +5.2%, Real: +0.3 %.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are +5.6% from Sep and they are positive in all actual and real comparisons. Because inflation has been relatively low, 64% of their 28.4% growth from 2019 is real. Growth: 2.9%; Avg 19>24: +5.1%, Real: +3.4%
  • Clothing and Accessories – Clothes initially mattered less when you stayed home. That changed in March 2021 with strong growth through 2022. Sales are up 7.9% from Sep and actual sales are up in all comparisons. Real sales are down monthly & Ytd vs 21, but 62% of their 19>24 growth is real. Growth: 2.4%; Avg 19>24: +3.2%, 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 +0.5% from Sep, but negative in all measurements but vs Oct 23 & actual vs 2019. They have sold less product in 2024 than in 2019. Growth: -3.9%;Avg 19>24: +2.3%, Real: -0.2%
  • 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 +5.0% from Sep, but they are only actually positive Ytd vs 23 & 19. Due to strong deflation, real sales are positive and exceed actual for all comparisons. Growth: +0.2%; Avg 19>24: +0.7%, Real: +3.7%.
  • 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 +11.3% from Sep. Actual sales are only down Ytd vs 23. Prices are deflating vs 23 but are still +16.7% Ytd vs 21. Real sales are positive in all comparisons but Ytd vs 21. However, just 26% of their 19>24 sales growth is real. Growth: -1.0%; Avg 19>24: +5.7%, 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. They have been on a monthly sales rollercoaster since June. $ are only +0.5% from Sep. All comparisons but real vs Oct 23 & Ytd vs 2019 are negative. Their inflation rate has been lower than most groups so 72% of their 24.4% growth since 2019 is real. Growth: -3.5%; Avg 19>24: +4.5%, Real: +3.3%.
  • 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 +6.8% vs Sep and positive in all measurements vs 23, 21 & 19. They are 2nd in the % increase vs 19 and now tied for 3rd vs 21. 67.2% of their 40.5% 19>24 growth is real, but their current Ytd lift is still 11% below Avg. Growth: +6.1%; Avg 19>24: +7.0%, Real: 4.9%.
  • 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 +11.3% from Sep. Their YOY lift grew to +10.6%, but Ytd they are still 45% below Avg. They are positive in all measurements and 81% of their 98.7% 19>24 growth is real. Growth: 8.1%; Avg: +14.7%, Real: +12.4%.

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 8 channels are deflating. This should help the Retail Situation. As expected, $ grew for all from Sep, but the 7.6% lift for Relevant Retail was 65% more than their 92>23 avg. This was a big turnaround. Also in September, their 2.7% lift vs 23 was -41% below average, 4 of 11 channels had a YOY $ drop and only 5 of 11 sold more product. In October, their 5.5% YOY lift was 21% above avg, 9 of 11 had a YOY $ lift and all 11 sold more product. Also, in September, there were 2 channels with 6.5+% lifts. In October, it grew to 4. Things are definitely better and there is more good news. Restaurants, Total & Relevant Retail are again positive in all comparisons. Relevant Retail has now been all positive in 5 of 6 months. The recovery has strongly restarted. However, when you look at the Ytd numbers, you realize that we need many more “Octobers” to fully recover.

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 – October Update: Slows to +2.0% 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>Oct 24. With a 0.1% increase in prices from last month, the CPI rose in October to +2.6% from +2.4% in September. Grocery prices rose 0.1% from September but inflation slowed to 1.1%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 20 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. It exceeded the CPI in August, but Sep>Oct are again below it. 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 Oct. 22 to Oct. 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 Oct., Pet prices were up 0.2% from Sep. The price lift was driven by Pet & Vet Services. The Product segments were both down.

In October 22, the CPI was +16.0% and Pet was +15.4%. 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, Supp. & 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 drop in prices. In Sep, Products fueled a drop. In Oct, Services drove a lift.

  • 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>Oct 24, but 31.6% of the 22.8% increase in the 58 months since Dec 2019 happened from Jan>Jun 2022 – 10.3% 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 Jul>Oct. 99% of the lift was in 22/23.
  • Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices & essentially stayed there until 22. They turned up in Jan and hit a record 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, July drop, Aug lift & Sep/Oct drops.
  • 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: ↑, Sep>Dec: ↓, Jan>Mar 24: ↑, Apr: ↓, May: ↑, June: ↓, Jul>Oct: ↑.
  • 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, leveled Jun/Jul, fell Aug, grew Sep>Dec, fell Jan, grew Feb>May, fell Jun>Jul, grew Aug>Oct.
  • 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 May>June (a record), fell Jul>Sep, rose in Oct, but Petflation is still below the U.S. CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for October and compare it to last month, last year and to previous years. We will also show total inflation from 21>24 & 19>24. Petflation fell to 2.0%, from 2.1% in September, and it is again below the National rate (-13.1%). In August, it was +12.0%. 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 September and were +2.6% vs Oct 23, up from +2.4% last month. Grocery inflation slowed to +1.1% from 1.3%. Only 2 had price decreases from last month – Pet Food and Pet Supplies. There were 3 drops in Aug & Sep, but 5 in July. The national YOY monthly CPI rate of 2.6% is up from 2.4%, but it is 19% below the 22>23 rate and 66% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services and Pet Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 has now only occurred in Total Pet and all Pet segments. Except for Pet Services, where prices are skyrocketing, Service Segments have in the past 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 95% 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 64.6% of the National CPI so they are very influential. Their current CPI is +4.7% while the CPI for Commodities is -1.0%. This clearly shows that Services are driving all of the current 2.6% inflation. There is a similar situation in Pet. Petflation: 2.0%. The CPI for the 2 Service Segments is 6.1%. The Pet Products CPI is -0.7%.

  • U.S. CPI– Prices are +0.1% from Sep. The YOY increase is 2.6%, up from 2.4%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 30+% higher than the target. The October increase was a big change after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +14.1%, 62.1% of the total inflation since 2019. Inflation was growing in October 2021, +6.2%
  • Pet Food– Prices are -0.3% vs Sep. and -1.3% vs Oct. 23, down from -0.9%. They are still significantly below the Food at Home inflation rate, +1.1%. The YOY drop of -1.3% is being measured against a time when prices were 23.1% above the 2019 level and the current decrease is actually less than the -1.7% drop from 2019 to 2020. The 2021>2024 inflation surge generated 98% of the 21.3% inflation since 2019. Inflation began in 2021.
  • Food at Home – Prices are up 0.1% from September but the monthly YOY increase slowed from 1.3% to 1.1%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.2% Inflation for this category since 2019 is 19.8% more than the national CPI but tied for 3rd place behind 2 Services expenditures. 59.2% of the inflation since 2019 occurred from 2021>24. This is lower than the 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 -0.4% from Sep and inflation fell to +1.0% vs Oct 23 from 1.5%, and they have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 92% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a new 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 Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell in Sep>Oct.
  • Veterinary Services– Prices are +1.0% from Sep and +7.3% from 2023. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +38.5% and since 2021, +28.8%. 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 74.8% 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 +0.4% from Sep and inflation vs last year rose to +3.8% from +3.6%. Medical Services are not a big part of the current surge as only 55.3% of the 13.2%, 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>Oct. to a new peak of 8.3%. This is up from Sep: 7.3% & Aug: 6.3%. 67.3% of their total 19>24 inflation has occurred since 21. In Dec 23, it was 49%. Plus, they again have the highest 23>24 rate.
  • Haircuts/Other Personal Services – Prices are +0.2% from Sep and +4.5% from Oct 23. 8 of the last 10 months have been 4.0+%. Inflation has been pretty consistent. Just 58.8% of the 19>24 inflation happened 21>24.
  • Total Pet– Petflation fell to 2.0% from 2.1% due to price drops in Products. It is still 62% less than the 22>23 rate and 13.1% less than the U.S. CPI. 2.0% is 35.5% below the 3.1% average rate since 1997. Vs Sep, prices rose 2%, driven by Vet & Services. The biggest Aug>Sep price increase was +0.7% in 2022 but a lift was to be expected. It has occurred in 15 of the last 20 years. A big factor in the small CPI drop was that the Sep>Oct price lift in 23 was a little bigger than 24. 2024 appears to be moving back towards a more normal pattern, but 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 (2.7%) and Pet Supplies (2.1%). It comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.3% or higher.

  • U.S. CPI – The 23>24 rate is 3.0%, the same as September, but it is down 30% from 22>23, 64% less than 21>22 and 29% below the average YOY increase from 2019>2024. However, it’s still 27% more than the average annual increase from 2018>2021. 72% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
  • Pet Food – Ytd inflation is 0.5%, down from 0.7% in Sep. and 96% less than the 22>23 rate. Now, it is also 95% lower than 21>22 and 43% 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 they 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 81% from 22>23, 90% from 21>22 and 62% from 20>21. Also, it is even 49% lower than the average rate from 2018>20. It is only 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 71% of the inflation since 2019 occurred from 2021>24.
  • Pets & Pet Supplies – In 24, prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, rose in Aug, fell Sep>Oct. Inflation in 24 is 0.7% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The only significant increases were 7.5% in 22 & 3.3% in 23. The 2021 deflation created a unusual situation. Prices are up 11.2% from 2019 but 105% of this increase happened from 2021>24. Prices are up 11.8% 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 in 2024, +7.6%, 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 2.5 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 2.7%. 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 6.1% is 2nd to Veterinary on the chart. It is 8% less than 22>23 but now equal to 21>22. Also, it is 1.9 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 4.5%, which is 13% below its 21 peak, but 30% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
  • Total Pet – Ytd Petflation is 2.6%, down from 2.7% Jul>Sep. It is 70% less than 22>23 but 13% 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 prices, but Ytd Supplies inflation is also low. Services & Vet prices reached new record highs in October. The mix of patterns has produced stability in the Aug>Oct Ytd Pet CPIs.

The Petflation recovery paused in Aug. then came back in Sep>Oct. At 2.0%, October was 35.5% below the average rate for the month and is again lower than the National CPI. We continue to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 19.8% above 2021 and 24.5% higher than 2019. Those are big lifts. In fact, in October prices for Vet & Services set new records while prices for Total Pet & all other segments are less than 1.4% below the highest in history. Only Supplies prices (+10.0%) are less than 23% 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 & SZ 24 as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

2023 U.S. TOTAL PET SPENDING $117.60B…Up ↑$14.89B

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In 2023 Total Pet Spending in the U.S. was $117.60B, a $14.89B (14.5%) increase from 2022. All segments had spending increases from 2022.  Veterinary and Food had the biggest lifts and the increase in Food spending set a new annual record. Together this produced a big increase in Total Pet $. Inflation was again a factor affecting spending. It slowed in Supplies but remained high in the other segments. Total Pet was 8.0%. That means that the “real” 22>23 lift was 6.0%. 

  • A $6.81B (+17.6%) increase in Food
  • A $1.08B (+4.9%) increase in Supplies
  • A $5.95B (+20.0%) increase in Veterinary
  • A $1.05B (+8.5%) increase in Services

Let’s see how these numbers blend together at the household (CU) level. Weekly, 26.8 million CU’s (1/5) spent $ on their Pets – food, supplies, services, veterinary or any combination – up from 25.3M in 2022 but still below 27.1M in 2019.

In 2023, the average U.S. CU (pet & non-pet) spent a total of $874.16 on their Pets. This was a +14.1% increase from the $766.20 spent in 2022. However, this doesn’t “add up” to a 14.5% increase in Total Pet Spending. With additional data provided from the US BLS, here is what happened

  • 0.3% more CU’s
  • Spent 8.1% more $
  • 5.6% more often

If 68% of U.S. CU’s are pet parents, then their annual CU Total Pet Spending was $1285.51. Now, let’s look at the recent history of Total Pet Spending. The rolling chart below provides a good overview. (Note: All numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Surveys – The 2016>2023 Totals include Veterinary Numbers from the Interview survey, rather than the Diary survey due to high variation)

  • In 2014-15, the Super Premium Food upgrade began, with the biggest lift coming in 2015.
  • In 2016, they value shopped for super premium foods. They spent more in other segments, but spending fell slightly.
  • In 2017, spending took off in all but Services, especially in the 2nd half. Consumers found more $ for their Pets.
  • In 2018, a spectacular lift in Services overcame the FDA issue in Food, tariffs on Supplies and inflation in Veterinary.
  • In 2019 a bounce back in Food and small lift in Veterinary couldn’t overcome the drop in Supplies from “tarifflation”.
  • In 2020, consumers focused on necessities, Food & Veterinary (+$8.7B) while Services & Supplies suffered (-$3.4B).
  • In 2021, there was no Food binge but in all other segments consumers made up for all the lost ground…and more!
  • In 2022, big lifts in Food & Services overcame drops in Supplies & Veterinary.
  • The 2022 lift was the 3rd in a row, breaking a pattern since 2010 – 2 years of increases followed by a small decrease.
  • The 2023 lift was the 4th in a row, and despite strong inflation, the 3rd largest ever. Trailing only 2008: +$17.11; 2021: +$16.23.

Now we’ll look at some Demographics. First, 2023 Total Pet Spending by Income Group

All income groups spent more but the biggest lifts came from the over $100K groups, especially $150K>.

Nationally: · Total Pet: ↑$14.89B   · Food: ↑$6.81B  · Supplies: ↑$1.08B  · Services: ↑$1.05B  · Veterinary: ↑$5.95B

  • < $70K – (49.5% of U.S. CUs); CU Pet Spending: $529.77, +12.1%; Total $: $35.33B, ↑$1.98B (+5.9%) ..
    • Food: ↑$2.44B
    • Supplies: ↑$0.07B
    • Services: ↓$0.06B
    • Vet: ↓$0.47B
    • Money matters a lot to this group. In the pandemic they focused on Pet needs. They have had slow but steady annual growth since 2019. In 2023 they focused on Pet Food.
  • >$70K – (50.5% of U.S. CUs); CU Pet Spending: $1212.30, +10.9%; Total $: $82.27B, ↑$12.90B (+18.6%) from…
    • Food: ↑$4.37B
    • Supplies: ↑$1.01B
    • Services: ↑$1.11B
    • Vet: ↑$6.41B
    • This group continues to grow in size, up 7.2% in 2023 and they produced 87% of the spending increase – 100+% of the 2 service segment lifts. All segments in the group had  double digit % Total Pet spending lifts.
  • < $30K – (21.3% of U.S. CUs); CU Pet Spending: $395.19, +13.1%; Total $: $11.34B, ↑$0.50B (+4.6%) from…
    • Food: ↑$1.89B
    • Supplies: ↓$0.07B
    • Services: ↓$0.21B
    • Vet: ↓$1.11B
    • This lowest income group is shrinking but still has relatively stable spending. They remain committed to their pets, but In 2023 they focused on Pet Food as spending dropped in all other segments, especially Veterinary.
  • $30>$70K – (28.3% of CUs); CU Pet Spending: $631.18, +10.9%; Total $: $23.99B, ↑$1.49B (+6.6%) from…
    • Food: ↑$0.55B
    • Supplies: ↑$0.14B
    • Services: ↑$0.15B
    • Vet: ↑$0.64B
    • Again matching the National Pattern, they had increases in all segments, but all but Services were below average.
  • $70>$99K – (14.1% of CUs); CU Pet Spending: $847.89, +10.6%; Tot $: $16.49B, ↑$1.91B (+13.1%) from…
    • Food: ↑$0.63B
    • Supplies: ↑$0.15B
    • Services: ↓$0.43B
    • Vet: ↑$1.56B
    • This group is very price sensitive. They had a 26% drop in Services but lifts in all the others, including +40% in Vet.
  • $100K>$149K– (16.6% of CUs); CU Pet Spend: $1113.13, +9.9%; Tot $: $24.38B, ↑$3.39B (+16.2%) from
    • Food: ↑$1.67B
    • Supplies: ↓$0.15B
    • Services: ↑$0.39B
    • Vet: ↑$1.47B
    • In 2020 they led the way in the Food binge. In 2021 they had a huge drop in Food $ but big increases in the other segments. In 2022 they got more “on track” with the biggest Total Pet $ increase for any income segment. In 2023 Supplies $ dropped but they had big lifts in the others which produced the 2nd biggest lift in the income category.
  • $150K> – (19.8% of CUs); CU Pet Spending: $1560.16, +9.5%; Total $: $41.40B, ↑$7.60B (+22.5%) from…
    • Food: ↑$2.06B
    • Supplies; ↑$1.00B
    • Services: ↑$1.16B
    • Vet: ↑$3.38B
    • This group consists of 2 segments, $150>199K and $200K>. In 2021 both groups had double digit increases in all segments. 2022 was different, with an overall lift despite 2 drops. In 2023 the $150>199K group had a small decrease in Services $ but all other measurements for both groups were up from 10.5% to 55.9%. This produced a $7.6B lift which was 51% of the Total Pet increase. This group has 19.8% of CUs but generates 35.2% of Pet $.
  • < $100K – (63.6% of CUs); CU Pet Spending: $600.80, +12.3; Total $: $51.83B, ↑$3.90B (+8.1%) …
    • Food: ↑$3.07B
    • Supplies: ↑$0.22B
    • Services: ↓$0.49
    • Vet: ↑$1.09B
    • The only drop was from $40>49K, -$0.95B. The biggest lift was from $30>39K, +$2.35B. Regarding the drop in Services, $50>69K was the only group that spent more, +$0.40K. The biggest drop was from $70>99K, -$0.42B
  • >$100K – (36.4% of CUs); CU Pet Spending: $1357.08, +10.1%; Total $: $65.778, ↑$10.99B (+20.1%) from…
    • Food: ↑$3.74B
    • Supplies: ↑$0.85B
    • Services: ↑$1.55B
    • Vet: ↑$4.85B
    • The $100K> group exceeded 50% of Pet $ for the 1st time in 2020. Their lead is growing as they now do 55.9%.

Income Recap –  The top 2 drivers in consumer spending behavior are value (quality + price) and convenience. That makes income very important in Pet Spending. We also often see motivation brought by new products. In 2020 we saw the results from perhaps the biggest human motivator – fear. This drove the binge buying of pet food. The huge lift from $100>149K helped push the 50/50 $ divide up to $103K, a huge change from $94K in 2019. 2021 brought a record lift and record spending in all segments but Food. This increase was driven by the $150K> income group and the 50/50 spending divide moved up to $107K. In 2022, Food & Services $ grew while Vet & Supplies fell. A big lift by $100>149K pushed the spending divide up  to $108K. In 2023, all segments grew, but especially Food and Vet.  The lift was driven by higher incomes so the 50/50 $ divide grew to $114K. Income continues to grow in importance in Total Pet Spending.

Next let’s look at 2023 Total Pet Spending by Age Group

All age groups spent more. 65>74 & 35>44 had $3+B lifts. However, all but 45>54 had a lift over $1B.

Nationally: · Total Pet: ↑$14.89B   · Food: ↑$6.81B  · Supplies: ↑$1.08B  · Services: ↑$1.05B  · Veterinary: ↑$5.95B

  • <25 – (4.5% of U.S. CUs); CU Pet Spending: $653.22, +68.9%; Total $: $4.05B, ↑$1.50B (+58.5%) from…
    • Food: ↑$0.37B
    • Supplies: ↑$0.40B
    • Services: ↑$0.001B
    • Vet: ↑$0.72B
    • Many consolidated into bigger CUs and some got married but their Pets were included. Plus, more pets were added which generated a lift in all segments. Overall, 3.7% fewer CUs spent 25.7% more $, 30.9% more often.
  • 25-34 – (15.7% of U.S. CUs); CU Pet Spending: $799.70, +16.3%; Total $: $16.75B, ↑$2.27B (+15.7%) from…
    • Food: ↑$2.02B
    • Supplies: ↓$0.17B
    • Services: ↓$0.18B
    • Vet: ↑$0.60B
    • In 2021 they had a 20% increase with a big lift in all segments. In 2022, spending fell overall and in all but Services. In 2023 spending was +15.7% due to lifts in Food & Vet. 0.9% more CUs spent 9.0% more $, 5.2% more often.
  • 35-44 – (17.5% of CUs); CU Pet Spending: $931.98, +13.3%; Total $: $22.11B, ↑$3.06B (+16.1%) from…
    • Food: ↑$1.25B
    • Supplies: ↑$0.11B
    • Services: ↑$0.31B
    • Vet: ↑$1.38B
    • They have the largest families and are building their careers, so they are very sensitive in times of change. In 2021 they spent more in all segments and became #1 in Total Pet $. In 2022 spending decreased and they fell to #3. In 2023 they had lifts in all segments but stayed #3 as 3.5% more CUs spent 3.0% more $, 8.9% more often.
  • 45-54 – (16.9% of U.S. CUs); CU Pet Spending: $998.89, +3.3%; Total $: $22.51B, ↑$0.72B (+3.3%) from…
    • Food: ↓$0.42B
    • Supplies: ↑$0.84B
    • Services: ↑$0.28B
    • Vet: ↑$0.01B
    • They have the highest income and were #1 in Pet Spending in 2018. In 2019 & 2020 their spending and rank fell. In 2021 & 2022 their spending grew but they stayed #2. In 2023, all but Food $ were up but their total lift was only 3.3%. They fell to #2 in CU spending and stayed #2 in total $. 0.1% more CUs spent 8.7% more $, 5.1% less often.
  • 55-64 – (17.8% of U.S. CUs); CU Pet Spending: $1016.42, +12.2%; Total $: $24.39B, ↑$2.45B (+11.2%) from…
    • Food: ↓$0.12B
    • Supplies: ↓$0.26B
    • Services: ↑$0.68B
    • Vet: ↑$2.15B
    • 60% are still younger Baby Boomers and they are very reactive. They were the drivers behind the 2020>21 binge & bust in Pet Food. In 22, spending normalized and they returned to #1. In 2023, big lifts in the Services & Vet overcame small drops in products as 2.1% fewer CUs spent 13.2% more $, 0.3% more often They are still #1 in $.
  • 65-74 – (16.0% of U.S. CUs); CU Pet Spending: $909.91, +18.9%; Total $: $19.71B, ↑$3.27B (+19.9%) from…
    • Food: ↑$2.35B
    • Supplies: ↑$0.25B
    • Services: ↓$0.09B
    • Vet: ↑$0.76B
    • This group is all Baby Boomers. They are careful with their money, but their commitment to their pets is very apparent. They are the only group with a spending increase every year from 2020>2023. In 2023 they increased spending in all but Services as 0.7% less CUs spent 9.7% more $, 10.0% more often.
  • 75> – (11.6% of U.S. CUs); CU Pet Spending: $521.60, +21.5%; Total $: $8.07B, ↑$1.62B (+25.1%) from…
    • Food: ↑$1.35B
    • Supplies: ↓$0.09B
    • Services: ↑$0.05B
    • Vet; ↑$0.32B
    • Pet parenting is more difficult, and money is tight for these oldest Pet Parents, but their commitment is still there. In 2021 they had increases in all segments. In 2022, only Food $ fell, but the drop was substantial. In 2023, they  had a strong rebound in spending as their $ grew in all segments but Supplies, including a 35.4% lift in Pet Food. 2.2% more CUs spent 3.2% more $, 18.6% more often.

Age Group Recap: In 2022 Total Pet Spending skewed away from <45 to the 45>74 groups.  In 2023, this reversed as <45 (38% of CUs) generated 46% of the $ lift. However, in 2023 Income became even more important in Pet spending.

Next, we’ll take a look at some other key demographic “movers” in 2023 Total Pet Spending. The segments that are outlined in black “flipped” from 1st to last or vice versa from 2022. The red outline stayed the same.

In 2023, 87 of 96 Demographic Segments (90.6%) spent more on their Pets, a big lift from 69% in 2022. (With inflation, 78.1% spent more in 23.) Another difference was that in 2023 there were 6 categories where all segments spent more. In 2022 there was 1. There was also less turmoil in 2023 as 4 segments held their spot and only 3 of the 24 segments flipped from 1st to last or vice versa. In 2022 there were 10 flips and 3 “holds”. In 2023 all of the biggest lifts were significantly larger than the biggest drops, but the drops were generally small and only happened in 6 categories. We should also note the strong stability in the Area Type category. Both the winner and loser held their position both in 2023 and 2022. Their performance is even more memorable. Not only did they hold their position in 2022 & 2023 but in both years, there were no segments in the Area Type category with a decrease in Total Pet Spending.

Let’s look at some specifics.

10 of the winners are often on Top and almost all of them have higher incomes.

Only 2 winners are surprising, and they have 1 common trait – They are old.

  • Retired     • 65>74 years old  

Among the losers, 6 often find themselves in this position. Note: 2 have increased spending – Asians & the South

    • Asians     • Born <1946     • Blue Collar     • South     • Single Parents     • $40>49K

All but Asians have low incomes. There were 3 surprises: Note: None had a drop in spending.

    • 3+ Earners     • 45>54 yr-olds     • Rural (despite +$0.8B spending in 22 & +$3.5B in 23)

All but Rural have a high income. However, Rural is a big Pet spender, with $1200 in annual CU pet spending.

Recap: After a slight downturn in 2019, Pet Spending turned up in 2020, primarily due to the pandemic binge buying of Pet Food. The Food binge ended in 2021 and Food $ fell. However, it was replaced by binges in the other segments. Pet Parents caught up with all the Supplies purchases that they had postponed due to the pandemic. COVID also caused them to focus on the health of their Pet Children so Veterinary also had a record increase. Services were hit hard by pandemic restrictions and closures, but they came back strong. Together, this produced a $16.23B increase in Pet Spending. 2022 brought a new challenge – radically high inflation. Supplies and Veterinary had drops in spending as their 2021 binge couldn’t be repeated. Food spending bounced back with a 12.5% increase. However, the Food lift didn’t make up for the combined drop in Veterinary & Supplies. Without the record increase in Services, Pet spending would have fallen in 2022 rather than being up $2.73B (+2.7%). However, if you consider 8.9% Petflation in 2022, the amount of Pet Products & Services sold in 2022 was really down 5.7%. Although inflation was still high in 2023, 8.0%, spending grew $14.89B to $117.60B, +14.5% (Real: +6.0%) and the lift was widespread as 90.6% of demographics spent more. It was 78.1% with inflation. All industry segments had increased spending, but the biggest lifts came from Food and Veterinary. Unlike 2022, when 45> was the driver, in 2023 most of the lift came from <45 & 65>. However, the strongest trend was in income. The $100K> group (36.4% of CUs) generated 73.8% of the increase. The 50/50 spending divide grew from $108K to $114K. In 2019, it was only $94K. In 2023, high income was by far the biggest driver in Pet Spending.

2023 U.S. VETERINARY SERVICES SPENDING $35.66B…Up ↑$5.95B

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Veterinary Services is the 2nd largest segment in the Pet Industry. For years, high inflation has been a problem in the segment. Spending grew 24.0% from 2014>2019. Prices rose 17.4%, an avg of 3.3%. This caused a reduction of visit frequency and only 28% of the growth was “real” (avg real growth: +1.3%). In late 2020 & 2021, COVID focused Pet Parents on their “children’s” needs, including Veterinary Services. In 2021 Veterinary Spending reached $32.76 with 87% “real” growth. In 2022 the binge was not repeated so spending dropped -$2.95B (-9.0%) to $29.71B. Inflation was still high in 2023, 9.4%. However, the higher incomes again focused on the needs of their pet children and drove a $5.95B (+20.0%) increase in Veterinary Services spending to a new record high of $35.66B.

In this report, we’ll take a closer look at the demographics behind the 2023 numbers. Note: All 2023 numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Interview Survey, rather than their Diary report. The low frequency of Veterinary Visits is still generating an extremely high variation in Diary data. Interview is a more logical and accurate way to track Veterinary Services Expenditures.

Let’s get started. Veterinary Spending per CU in 2023 was $265.02 up 19.6% from $221.60 in 2022. (Note: A 2023 Pet CU (68%) Spent $389.74. More specifically, the 20.0% increase in Veterinary spending came as a result of:

  • 0.3% more CU’s
  • Spending 12.5 more $
  • …6.3% more often

We’ll take a closer look. But first, the chart below gives an overview of recent Veterinary Spending.

The big drop in the first half of 2015 was tied to the upgrade to Super Premium Foods – Trading $. Then consumers began value shopping for Food and the savings freed up $ for Veterinary Services. Spending began to climb until it flattened out at the beginning of 2017. Inflation slowed in the 2nd half and spending took off. In 2018 prices turned up and consumers held their ground through 2019. The initial COVID reaction in 2020 was a drop in spending but “need focused” consumers then drove a huge increase through 2021. In 2022, inflation grew to 8.8% and spending dropped. Inflation got even higher in 2023, 9.4% but the highest incomes drove a $6.1B lift in the 2nd half.

Now, let’s look at Veterinary spending by some specific demographics. First, here is a chart by Income Group

Veterinary Spending is even more driven by income. All groups but <$30K & $50>70K spent more in 2023. The biggest lift came from the $150>199K group. +$1.92B. However, all income groups over $70K had an increase over $1B. This caused the 50/50 spending break point in $ to increase significantly from $115K in 2022 to $124K in 2023.

National: $265.02 per CU (+19.6%) – $35.66B – Up $5.95B (+20.0%)

  • Over $150K (19.8% of CUs) – $508.69/CU (+18.8%) $13.53B, Up $3.38B (+33.3%) This highest income group is the biggest Veterinary Spender as 19.8% of CUs generated 37.9% of 2023 $ but also 56.8% of the increase from 2022.
  • $100>150K (16.6% of CUs) – $368.32/CU (+12.9%) $8.25B, Up $1.47B (+21.7%) Spending by this middle/upper income group slowed in 2019 but took off in 20>21, stabilized in 22 but grew over 20% in 23.
  • $70K>100K (14.1% of CUs) – $285.15/CU (+40.5%) $5.40B, Up $1.56B (+40.5%) Steady growth 2016>19. Then $ fell in 2020 due to monetary pressures. 21 had a big lift. High 22 inflation caused a drop, but spending recovered in 23.
  • $30K>70K (28.3% of CUs) – $171.26/CU (+13.1%) $6.51B, Up $0.64B (+10.9%) From 2016 to 2020 their pattern was remarkably similar to the big spending $150K+ group. That changed in 2021 as they were the only group to spend less in Vet $ while $150K> had the biggest lift. In 2022>23 the pattern match returned – a drop in 22 & a lift in 23.
  • Under $30K (21.3% of CUs) $68.86/CU (-28.5%) $1.97B, Down $1.11B (-35.9%) This group is very price sensitive. After the big spending dip in 2018, they slowly but consistently increased Veterinary spending until the small drop in 2022. In 2023, their spending plummeted, -35.9% – the only drop. Now, their $ are just a little above 2018.

Now, here is Veterinary Spending by Age Group

All groups spent more. 55>64 & 35>44 had the only lifts over $1B. 45>54 was only +0.01B but had the biggest lift in 22.

National: $265.02 per CU (+19.6%) – $35.66B – Up $5.95B (+20.0%)

  • <25 (4.5% of CUs) – $181.64/CU (+201.2%) – $1.10B – Up $0.72B (+190.1%) Many combined into group CUs and some got married. Many also added pets so 3.7% less CUs spent 72.4% more $ …74.7% more often.
  • 25>34 (15.7% of CUs) – $227.53/CU (+13.3%) – $4.80B – Up $0.60B (+14.3%) The commitment of these Millennials to their pets is growing. Spending was stable 2017>19. The pandemic caused Vet spending to take off In 2020>21. A 22 drop was not unexpected, but they came back strong in 23 as 0.9% more CUs spent 6.8% more $ …6.0% more often
  • 35>44 (17.5% of CUs) – $274.97/CU (+22.8%) – $6.49B – Up $1.38B (+27.1%) In 2019, they radically increased their spending and became #1 in Veterinary $. In 2020, unlike most groups, spending dropped. In 21 they had the biggest % increase. In 22 their spending fell but grew $1.4B in 23 as 3.5% more CUs spent 7.0% more $ …14.8% more often.
  • 45>54 (16.9% of CUs) – $304.10/CU (+0.05%) – $6.91B – Up $0.01B (+0.2%) This group has the highest income, but value is important. In 2017, the slowed inflation caused them to spend significantly more money. In 2018, prices turned up and continued to inflate in 2019. Spending dropped precipitously to their 2016 level, and they lost #1 spot in Veterinary $. 2020 brought a big spending lift which continued into 2021>22. In 22, They returned to #1 in Vet $. In 23 their spending stabilized as 0.1% more CUs spent 2.8% more $…2.7% less often. They fell from #1 to #2.
  • 55>64 (17.8% of CUs) – $346.64/CU (+37.9%) – $8.29B – Up $2.15B (+35.0%) This group was the leader in Veterinary Spending prior to 2015. In 2015 they upgraded to Super Premium Food and Vet Spending fell. In 2016 inflation slowed and they regained the top spot. In 2018 Veterinary prices began to strongly inflate again. Their spending fell and continued down into 2019. In 2020 they moved back to the top in Veterinary Spending. They stayed there with the biggest lift in 2021. In 2022 their spending binge ended and inflation soared to 8.8% so they fell to #2. In 2023 inflation was 9.4% but 2.1% less CUs spent 24.8% more $, 10.5% more often. Their $2B lift pushed them back to #1.
  • 65>74 (16.0% of CUs) – $253.66/CU (+17.0%) – $5.47B – Up $0.76B (+16.2%) This group is all Boomers, so they are committed to their pets. They had consistent annual growth from 2018>2021. In 2022 they had a small dip but in 23 they came back as 0.7% less CUs spent 27.6% more $, 8.3% less often. It appears that inflation now matters less.
  • 75> (11.6% of CUs) – $166.45/CU (+11.4%) – $2.59B – Up $0.32B (+13.9%) This group of oldest Pet Parents has a strong commitment to their pets. In 2015, they had a $1B increase in Veterinary Spending. In 2016 & 2017, they focused on Food, Supplies and Services. In 2018, they turned their attention back to Veterinary. However, their spending has slowly but consistently grown every year since 2015 – the only group to accomplish this. In 2023 2.2% more CUs spent 5.1% less $ …17.5% more often. This produced an 13.9% increase in spending.

Now, let’s take a look at some other key demographic “movers” behind the 2023 Veterinary Spending numbers.

Veterinary spending rose by $5.95B (+20.0%) in 2023. With a high 9.4% inflation rate, the real lift in the amount of Veterinary services bought was only 9.7% (Real: 48.5%). 79 of 96 demographic segments, 82.3% spent more on Veterinary Services in 2023 than in 2022, a big change from last year when 77.1% of segments spent less. BTW – Considering inflation, only 67.7% “really” spent more in 2023. There was still turmoil as 12 of 24 flipped from first to last or vice versa while only 1 segment maintained its position from 2022. 7 of the flips were from last to 1st. We should also note that there were 4 categories in which all segments spent more. In 2022 in 3 categories, all spent less.

All of the “winners” are often found at the top. There were no true surprises. They have a common trait – higher income

In the “losing” group, most were expected. There were 3 that were somewhat surprising.

    ∙ 45>54 yr olds (had the smallest increase after the biggest lift in 2022)  ∙ 4 People   ∙ Married, Oldest Child 18>              

This group is surprising because they have higher incomes. The other “losers” all have below average incomes.

Despite the $3.09B drop from 2021 to mid-yr 2023, Veterinary spending has increased +$14.95B (72.2%) from mid-yr 2020 through 2023. In Veterinary spending, inflation is always a factor. It has traditionally been high but 87% of the 2020>21 growth was real. However, prices rose 8.8% in 2022 and 9.4% in 2023 for a 2021>23 inflation rate of 19.1%. That means that the 9.2% 2021>23 spending lift was really an -8.4% drop in the amount of Veterinary Services sold. High inflation is still a big problem in the Veterinary segment.

The 2022 decrease was widespread across Income and Age groups as all income groups spent less and only 2 age groups spent more. The drop was also widespread as 77% of all segments spent less including 3 categories – Housing, Area and CU Size, where all segments had decreased Veterinary Services spending. The 2023 $5.95B (20.0%) lift had the opposite pattern as 82% of demographics spent more and 4 categories had no segments with a spending decrease – Region, Area Type, Housing and Age Range.

Prior to 2020 there was a youth movement in Veterinary Spending from <45. That changed in 2020 as 45> accounted for 94% of the $3B increase. In 2020, 2021 & 2023 the 55>64 yr-olds were on top. In 2022 it was the 45>54 yr-olds. The $ are skewing older but have also become a little more balanced from 25>74. Although Veterinary services are needed by all Pet Parents, higher income is by far the biggest driver in spending. This is best illustrated by comparing 2023 segment performance (Share of $/Share of CUs): <$30K: 26.0%; $30>69K: 64.6%; $70K>99K: 107.6%; $100>149K: 139.0%; $150>199K: 179.5%; $200K>: 201.0%. Yes, Vet Services are needed by all but are becoming less affordable for many.