Comparing the Spending Demographics of the Industry Segments – SIDE BY SIDE

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The first reports of our Pet Spending Demographics analysis have been very detailed and intense. We looked at the industry as a whole and each of the individual segments. Recent years have seen some turmoil. We have seen the very real impact of outside influences on the industry. In the 2nd half of 2018, the FDA warning on grain free dog food caused a $2.3B drop in Food $ and new Tariffs flattened Supplies $, but Services had a record lift. In 2019, Food rebounded but the tariffs really hit the Supplies segment with a $3B drop. Veterinary $ grew slightly while Services $ fell a bit. The net was -0.2% drop in Total Pet. The 2020 pandemic had varied impacts as Pet Parents focused on needs. This caused a lift in Veterinary and a huge increase in Food because some demographics binge bought out of fear of shortages. Services spending plummeted due to outlet closures and restrictions while Supplies $ continued to fall because consumers saw them as more discretionary. 2021 brought a big change, Food $ fell because there was no “binge” repeat. However, Pet Parents focused on their “children” producing a widespread record lift in all other segments and a $16B increase. In 2022, after the record lift in 2021, spending fell in Supplies and Veterinary, but Food had a strong 12.5% increase and Services continued to surge. This combination produced a 2.7% increase in Total Pet $. In 2023, the industry appears to have fully recovered with spending lifts in all 4 segments for the 1st time since 2014. A 20% increase in Veterinary and a record lift in Food drove the 3rd largest increase in history, +$14.89B, and Total Pet Spending reached $117.6B.

We have often referenced the similarities and differences in spending between Total Pet and the individual industry segments. Total Pet Spending is a sum of the parts and not all parts are equal. In this final report we are going to put the segments side by side to make the parallels, differences and changes from 2022 more readily apparent. We will address:

  • “The big spenders” – those groups which account for the bulk of pet spending.
  • The best and worst performing segments in each of twelve demographic categories
  • The segments with the biggest changes in spending $ – both positive and negative
  • And of course, the “Ultimate Spending CUs”

The emphasis is on “visual” side by side comparisons to allow you to quickly compare the industry segments. We’ll try to minimalize our comments. You can always reference one of the specific reports for more details. We’ll also break the charts up into smaller pieces that are demographically related to make the comparison more focused and easier.

Before we get started, let’s take a look at the current market share of the industry segments. The following 2 charts show the 2023 share of spending for each segment and the evolution over the past 30 years. 1992 was the last year that the Food Segment accounted for 50% of Total Pet Spending. By the way, Total Pet Spending was $16.2B in 1992. We have come a long way, +626%; annual growth rate of 6.6%. This will help put our comparisons into better perspective.

2022>2023 CHANGE in SHARE of TOTAL PET SPENDING

Food: 38.7%, Up from 37.7%

Veterinary: 30.3%, Up from 28.6%

Pets & Supplies: 19.6%, Down from 21.4%

Non-Vet Services: 11.4%, Down -0.6% from 12.0% 

In 2023, Food & Veterinary gained 2.4% in share in Total Pet $ from Supplies & Services. The most notable trend from 1992 to 2012 was the decline in Food share while Supplies gained in importance. Both of those have ended. In recent years, the Product Segments have been on a rollercoaster. Food reached 44% in 2020, the highest level since 44.8% in 1998. Supplies have been trending down since 2012, hitting bottom at 18.1% in 2020 but are again below 20% in 2023 (19.6%). Both Services segments have been more stable. They have generally trended up since 2012. After falling to 8.2% in 2020, Non-Vet Services peaked at 12% in 2022. Except for the big lifts in 2021 & 2023, which pushed them above 30%, Veterinary has been in the 25>28% range since 2012. All are impacted by outside influences but big trends in Food and Petflation tend to make the Product Segments more volatile than the Services Segments.

Now let’s get started with a look at the “Big Spenders”. The following 2 charts will compare the market share and performance in all Pet Industry segments by the groups responsible for the bulk of the spending in 10 demographic categories. With 1 exception – Age, these are the groups that we identified in our Total Pet analysis to generate at least a 60% market share of spending. As you recall, to better target the spending we altered from 1 to 4 groups in every segment. However, to have a true side by side comparison we need to use the same groups for all. The groups that we chose make sense and are the same as 2021. You will see that in a few cases, the share of $ is close  but does not meet our target of 60%. Most of these are due to Food spending becoming significantly more balanced.

The chart makes it especially easy to compare share and performance across categories. Remember, performance levels above 120% show a very high level of importance for this category in terms of increased spending. Unfortunately, it also indicates a high spending disparity among the segments within the category. There are 2 charts, each with 5 categories. The categories are listed in their order of share of Total Pet $ – from highest to lowest.

  • White, Non-Hispanic – This group has a 79.9+% market share in every Segment. Minorities account for 33.7% of CUs but only 15>20% of spending in any segment. Factors: Lower income for Hispanics and African Americans and lower Pet ownership in Asians and African Americans. Whites lost share in Total & in all segments but Supplies. Minorities gained in Total by different paths. Hispanics: ↑Food & Vet; African Americans: ↑Food & Services; Asians: ↑ Services only.
  • 2+ People in CU – 2+ is still the key in pet ownership. However, the results were mixed. Singles had less CUs but gained share in Total & the Product segments. 2+ CUs had the opposite pattern. 2 People only gained in Veterinary & 4 people only in Services. 5+ People gained in both Service segments. Once again, 3 People CUs was the only size to gain share in Total and in every Industry Segment but 2 People still has the biggest share in all.
  • Homeowners – Homeownership is very important in Pet Ownership and subsequently in all Pet Spending. It also increases with age. In 2023, Total & the Product Segments are below 80%. In 2022 it was only Supplies. The group lost 1.6 % in Total Pet share. The loss was driven by big drops in Food & Vet by those w/Mtge, despite a 4.7% gain in Services. W/O Mtge were only up in Vet. Renters gained share in all but Services – the opposite of Homeowners.
  • Suburban & Rural – They gained 0.1% in Total Pet. Gains in Supplies & Services overcame drops in Food & Vet. The Suburbs 2500> gained share in all but Supplies. Rural had the exact opposite pattern. Center city was down in Total Pet and only up in Food & Veterinary.
  • Over $70K Income – INCOME MATTERS MOST IN PET SPENDING! Income has grown in importance, and all segments, but Food performed at 140+%. $70K> gained 3.2% in CU share and 2.4% in Total. They had gains in every segment. Food: +0.6%; Supp: +1.1%; Serv: +2.2%; Vet: +6.3%. Spending appears more balanced in income for all segments but Veterinary. However, the situation is more complicated. Consider this: The only income group to gain in all segments was $200K>, but <$40K gained 5.2% in Food share. As I said, spending is complex, especially in Food.

  • Everyone Works – Income is important, but not always the # of Earners. The group’s share fell for Total & Food. It was not a good year for 2 & 3 Earners – down in Total & 3 of 4 segments. 1 Earner, Singles gained in all but Services. Supplies are now 70+%, but it was not enough overall. However, Services is again 120+% and now joined by Supplies
  • All Wage & Salary Earners– Incomes vary widely in this group, so performance is often lower. The group gained 0.6% in CU share, but lost share in Total Pet and all segments but Veterinary. The drop was driven by Managers and Service Workers. Both were down in Total and 3 of 4 segments. Tech/Sls/Cler had the best year with the exact opposite pattern. Blue Collar also contributed to the share loss as they were down in Total, Supplies & Veterinary.
  • Married Couples – Marriage is 1st in importance to spending in Food, 2nd in Total & Supplies, 3rd in Veterinary but falls to 4th in Services. In 2023 their share & performance fell in Total, Food & Vet but grew in Services & Supplies. The best performer inside the group was CUs with a child 6>17. Outside of the group, it was Unmarried, 2+ Adults.
  • College Graduates > – College Grads rebounded from their 2022 drop but not enough to make up for the huge drop by Associate’s. These were contributing factors in the decision to change this group back to College Graduates only. College Grads gained share in all but Supplies. The biggest gains were in Vet & Services. They are near their 2021 share in both of these segments, but still -5% in Total, -7% in Food & -12% in Supplies. Education has gained importance. It is again #2 for Total and both Services segments but is only #5 for Food & #8 for Supplies.
  • 35 to 64 yrs – Includes the 3 highest income segments. They lost share in Total Pet and Food, stayed even in Supplies & Vet and gained in Services. They are still above 60% for all but Food & Total. The <60% shares were due to a huge spending lift in Food by the 65> group which pushed 65>74 to the top in share. Pet Food is definitely more balanced by age group, but this is likely a 1 time event. Because 35>64 is the leader for 3 of 4 segments, I stayed with them.

Now we’ll look at the Best/Worst performers in each category. Highlighted cells are different from Total Pet; * = New Winner/Loser; ↑↓ = 5+% Performance Change from 2022. The categories are divided into related groups. 1st, Income

  • Income – Income matters. All winners were $150K> and unchanged from 2022. The disparity between 1st and last place in Total fell by 15%. Veterinary was -6% but Food disparity fell -27% due to gains by <$40K. The gap in Supplies grew by 3% but Services was 26% bigger. More balanced spending in Food but much less balance in Services.
  • # Earners – The highest income 3+ Earners group fell from the top in 3 segments. They were replaced by 2 Earners in Vet & Services. The most impactful changes were in Food which drove disparity down -32% & even -18% in Total. Disparity increased only 8% in Services but it grew by over 23% in both Supplies & Veterinary.
  • Occupation– Mgrs & Professionals are #1 in CU income and expenditures, but they were replaced by Self-Employed as best performer in the Product segments. Blue Collar & Service Workers both picked up another bottom spot. The spending disparity decreased by 9% in Total, 27% in Services, 16% in Food but only 1% in Supplies. Only Veterinary had an increase but it was substantial, +33%.

Next are demographics of which we have no control – Age, Generation and Racial/Ethnicity

  • Racial/Ethnic– White Non-Hispanics are the top performer in all segments and African Americans are on the bottom in all but Food. They have the lowest income and only 25% own Pets. High income Asians did replace them in Food, but they also have low Pet ownership. Total Disparity was -4% but mixed among the segments. Food: -11%; Supplies: +18%; Vet: +6%; Services: -6%. Food continues to be more balanced, but Vet disparity is again over 100%.
  • Age – The 45>54 yr-olds no longer “rule”. They were replaced by older groups. The bottom is even older. Only <25 in Services is not 75+. The Total disparity fell -12%. 2 Segments were down – Food: -14% & Vet: -42%. 2 Segments were up – Supplies: +14% & Services: +18%. Some big swings, but again only 1 is over 100% – Services. In 2022, it was Vet.
  • Generation – Gen X still “rules”, all but Food. Gen Z is still at the bottom in Services while Born <1946 is the worst in the others. Disparity was -8%. Food (-17%) & Vet (-13%) were down. Supplies (+15%) & Services (+15%) were up.

In the next 6 categories, we have at least some control

  • Education – Higher Education generally correlates with income. The winners are College Grads while the losers are HS Grads or less. The Disparity gap rose +3%. Food: -18%; Supp: -9%; Vet: +26%; Serv: +45%. Services rely on income.
  • CU Composition – 9 of 10 best/worst are different from 2022. Except for Food & Vet, married w/kids wins. The loser is Single Parents for all. Disparity rose 7%. -10% drops in Products couldn’t overcome 15>29% increases in Services.
  • CU Size– 3 People won all but Services (4) while “1” remained solidly on the bottom. Disparity was down only -0.1%. There was an increase in Veterinary but drops in all others. All changes were small.

  • Housing – The perennial winner and loser. Disparity fell -6%. Food (-13%), Supp. (+2%), Vet (-15%), Serv (+24%).
  • Area– Another perennial winner & loser. The disparity dropped -3% for Total, Food (-2%), Supp (+27%), Vet (-19%) and Serv (-2%). The most notable change was the big lift in Veterinary spending in Center City areas.
  • Region – Midwest & West swapped spots 3 times. The South is at the bottom in all Segments. Disparity rose +10%. Food (+5%), Supp (+15%), Vet (+12%) and Serv (+7%). Big changes are unusual for this lowest disparity category.

Here are the categories with the biggest & smallest disparities for Total Pet & each industry segment.

The fact that income produces the biggest spending disparity is no surprise. Pet spending is driven by income. The low Food Income disparity and the Regional “wins” reflect a growing balance in spending in some categories. In Area Type, Services spending is expanding beyond high population areas while Veterinary spending is now growing in Center City.

Now, here are two summary charts. The first compares the averages.

Services & Supplies disparity grew while Vet was essentially stable. A big drop by Food drove Total down. The disparities for all but Service & Supplies are below 2019 levels. Food has the lowest disparity for the 3rd  straight year. The gap grows as you move from needed to discretionary. Services is again on top & have the only gap over 100%. The Vet disparity also grew slightly but it fell to 3rd highest. Total Pet is down 5% from 22 & 21% from 21, much more balanced.

  • Food – Down 14% from 2022, 30% from 2019, but 159% from the 2020 binge. They are the most balanced.
  • Supplies – The record 2021 increase produced a record disparity. The lift in 2023 pushed them 9% above 2019.
  • Veterinary – Their 2021 lift increased the difference to 100+%. Despite The 2023 lift, they are still below 2019.
  • Services – Only a small $ lift in 2023, but the gap widened by 11%. They are again the only segment over 100% .

This chart shows the number of new winners/losers.

There was more turmoil than in 2022, but Food again led the “pack” with nearly half of the winners & losers changing as their spending exploded in 2023.

  • With a record $6.81B increase in 2023, the turmoil in Pet Food continued with 11 changes. However, there were more new winners than losers – the opposite of 2022.
  • Supplies spending grew in 23 and the # of changes rose from 5 to 8. Winners: 5 up from 4; Losers: 3 up from 1
  • The Veterinary lift was also big and the # of changes jumped to 9 from 4.
  • Services growth slowed but the # of changes was again 4. However, there were no new losers in 23.

Now, let’s look at the Demographic Segments with the Biggest Changes in $. We’ll truly see some differences between the Industry Segments. We have color highlighted differences from Total Pet. Plus:

  • ↔ = Winner/Loser same as 2022
  • ↕ = Flipped from 1st to Last or vice versa

First, the Income related categories.

  • Income – 3 winners & 5 losers were new with 1 flip. 4 winners are over $100K but no losers. All losers were below average income, 4 <$50K. It looks like the win by <$30K in Food was accomplished by trading Vet $.
  • # Earners – All but 2 are new with 2 flips. In Vet & Services, the winner & loser were driven by income. In Products, it was the opposite pattern. In Vet, both flipped. In Total Pet, all segments spent more. This produced an unusual result. The highest income group had the smallest increase while the 2nd highest income was the “winner”.
  • Occupation – No repeats and 6 flipped. Retirees won Total (flip), Food (flip) & Services. The high income, Mgrs & Professionals had 2 flips – to the top in Vet & to the bottom in Food. Tech/Sls/Clerical lost Services but flipped to the top in Supplies. Blue Collar had 20+% lifts in Food & Services but even bigger drops in Vet & Supplies which drove them to the bottom in those categories and Total.

Now the Age and Racial/Ethnic Categories

  • Racial Ethnic – 4 repeats & 4 flips. White, non-Hispanics won in all for the 1st time since 2014. African Americans flipped to the bottom in Supplies & Vet. Asians lost in Food & Total – with the smallest increase. Hispanics lost in Services. Overall, it was a good year for Minorities, +24.3% in Total Pet $. Whites were +12.3%.
  • Age – 1 repeat and 3 flips. There were 3 different winners but 4 were over 55, 1 more than 2022. In 2023, 45>54 was the big loser. They lost Food & flipped from 1st to last in Vet and Total with the smallest increases. There were 3 different losers. 55>64 lost in Supplies. The 25>34 yr-olds lost Services. This is not surprising as they had a 43% lift in 2022. <25 had a great year with lifts in all segments, but they are by far the smallest segment. They didn’t win in $ but they had the biggest % lift in Supplies, Veterinary and Total Pet.
  • Generation – 1 repeat & 2 flips. Millennials reinforced their importance with wins in Food and Total. The high income Gen X won the more discretionary Supplies & Services but flipped to the bottom in Food. Boomers were 2nd in Total & Food but won in Vet. The oldest group, Born <1946, retained their spot at the bottom in Total and added Vet & Services. Gen Z didn’t win but they increased spending in all segments, 50+% in all but Non-Vet Services.

Now, here are more Demographic Categories in which the consumers can make choices.

  • Education – 1 repeat & 1 flip. Higher education is usually tied to increased income and pet spending but not always. It was a strong year for College Grads with wins in all but Supplies. HS Grads w/some College won Supplies while Adv. College Degree lost again. HS Grads lost Vet but after a big lift in 22, Associates lost Food, Services & Total in 23.
  • CU Comp. – 1 repeat & 1 flip. CUs with no Children – Singles (products) & Married, Couple Only (all services & Total) won all segments. Except for Unmarried 2+ Adults in Services, the losers all had children. Married, Oldest Child 18> in Supplies & Vet. Single Parents in Food & Total.
  • CU Size– 1 repeat & 2 flips. 4 different winners. 3 people was the only repeat, in Supplies. 2 People won Veterinary and Total Pet. There was no clear pattern in the winners. 4 people was the loser in all but Services (1 Person).

  • Housing – 4 repeats & 3 flips. In all but Services, all segments spent more. Homeowners w/Mtges are on top in all. Renters lost in Services and had the only decrease on the chart. Homeowners w/o Mortgage lost in all other segments and Total. However, we should note that they increased spending in all 4 of their losses. Another thing of note is that this is the second consecutive dual flip in Supplies.
  • Area – 5 repeats with 2 flips. The big Suburbs are the normal winner. They held onto the top spot in Services, Food & Total and flipped to the top in Vet. Rural, in Supplies, was the only other winner. Rural lost in every other segment and Total but finished last while increasing spending. Center City is the usual loser and they lost in Supplies with the only spending drop. They also tied for last in Food with Rural but they did it with a $1.86B increase in spending.
  • Region – Again no repeats but 4 flips. The West won the needed segments – Food & Vet while the Northeast won the more discretionary Supplies & Services, plus Total Pet. The Midwest, 2022’s big winner, lost Vet but spent more. The South finished at the bottom in all other segments and Total.

The next chart compares the number of repeats, “flips” and new segments among the 12 winners and 12 losers for each industry segment. The idea is to look for patterns in the data that cross segments. Let’s take a look.

  • All were up. Food & Vet $ had big lifts while the Supplies & Services increases were small.
  • After 2 record increases, Services $ slowed to +8.5%. However, they again were the repeat leader (7, down from 13)
  • With big turnarounds in spending, Supplies (9) and Veterinary (13) had the most flips. 62% of Vet flips were last to 1st while 56% of Supplies flips were 1st to last. Services had 2 flips, up from 0 in 2022. Food had a big drop in their numbers as they fell from 11 flips in 2022 to 4 flips in 2023.
  • Total Pet also shows increased stability. 4 repeats, up from 3 in 22. Only 3 flips, down from 10 in 22.
  • There are 24 winners/losers. Here’s the number different from 22. (last yr vs 21) Food: 19 (22); Supplies: 20 (23); Vet: 23 (21); Services: 17 (11); Total: 20 (21). Any change in growth pattern causes turmoil at the segment level.

Next, there were so many positive contributors that in each individual report we recognized 6 segments that didn’t win but still performed so well that they deserved Honorable Mention. I reviewed that list again and came up with segments that won Honorable Mention at least twice. Here are the 7 “SUPER Honorable Mentions” for 2023…

7 segments made the list, 2 less than 2022. Supplies & Total Pet tied for the lead with 5 segments on the “Super” list. Veterinary had 4 and Food & Services had 3. All segments on this year’s list are generally “low profile” but contributed notably to the industry. We should give special kudos to Gen Z and No Earner, 2+ People CUs. These 2 groups won Honorable Mention in 3 Industry segments and Total Pet.

Although the results were mixed, with numerous individual changes, here are some trends of note:

  1. Older Youth Movement – Boomers must inevitably fade. The Gen Xers had a not so great year but are still the CU spending leader in Total Pet and all segments but Food. Spending is skewing towards their older, wealthier members and young Boomers. Millennials had a strong year and are close behind. Gen Z is definitely “in the game”.
  2. The “Magic” number is 3 – As spending has skewed younger the best performing CUs in all but Services have 3 people. Services’ best is 4. However, 2 person CUs still have the largest share of CU’s, 33.1% and 100+% performance in Total Pet and every segment. They’re not done yet.
  3. Improved spending balance in Food – The performance gap between the best and worst narrowed in Food & Total Pet. It widened in all other segments, but only by 1% in Veterinary. However, the disparity is still less than in 2019 for all but Supplies & Services. So “needed” segments are the same or better. Discretionary segments are worse.
  4. Income is still the most important factor – The gap between best & worst narrowed in Total, Food & Vet, but grew in Supplies & Services. The disparity is still the biggest of any category.

And Finally, What you have all been waiting for…

THE ULTIMATE 2023 PET SPENDING CUs – Side by Side

Color Highlighted cells are different from Total Pet; * = New in 2023

Methodology – The segments are chosen because they have the highest annual CU spending of any segment in the category. They may or may not have the most total dollars. That would depend upon the number of CUs in the group.

Final Comment – These “winners” further reinforce the key factors in increased pet spending:

Marriage– A commitment to another person demonstrates that you can make a commitment to your pet “children”.

CU Size – The “magic” number is 3 for Total & all segments but Non-Vet Services, where it is 4.

Homeownership/Area – Owning and controlling your own space has long been a key factor in Pet Parenting.

More space – Small suburbs near a big metro area offer the convenience of the city, plus room for more pets.

Income Matters Most – High Income, A High Paying Occupation, A Formal after HS Degree, Everyone works with 2+ Earners. These are characteristics present in all of the Ultimate Pet Spending CUs.

Generation/Age – Gen X rules all but Food – Boomers. Age is skewing older to the oldest Gen Xers or younger Boomers.

Region – Take your pick – Midwest or West, just not the Northeast or South.

I hope that this Visual Comparison helped you to get a “satellite view” of Pet Industry Spending in 2023. Please refer back to the individual segment reports to get more details.

There is one consistent winner in the Pet Industry…

…OUR PET CHILDREN

 

 

Petflation 2025 – February Update: Rose to +2.4% vs Last Year

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The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until it turned up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. Prices fell -0.1% in Nov, but rose 0.04% in Dec, 0.7% in Jan 25 and 0.4% in Feb to a record high. However, the CPI fell to +2.8% from +3.0% in January. Grocery prices rose 0.1% from January but YOY inflation was stable at 1.9%. After 12 months of 10+% YOY monthly increases, grocery inflation has now been below 10% for 24 months. 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 Dec 21 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 22. National inflation has slowed considerably since then, but Petflation generally increased until June 23. It passed the CPI in July 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, fell below in Sep>Oct, rose above in Nov, then fell below in Dec>Feb 25. As we drill into the data, all 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 25 vs 24 which will include Pet Segments and relevant Human spending categories. Plus
    1. CPI change from the previous month.
    2. Inflation changes for recent years (23>24, 22>23, 21>22, 20>21, 19>20, 18>19)
    3. Total Inflation for the current month in 2025 vs 2019 and vs 2021 to see the full inflation surge.
    4. Average annual Year Over Year inflation rate from 2019 to 2025
  • 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 Feb 23 to Feb 25. 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 from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In Feb, Pet prices were up 0.8% from Jan. Food (+0.6%) & Vet (+2.3%) were up while Supplies (-0.7%) & Services (-0.2%) were down.

In Feb 23, the CPI was +17.1% and Pet was +18.6%. The Services segments inflated after mid-20, while Product inflation stayed low until late 21. In 22, Food prices grew but the others had mixed patterns until July 22, when all rose. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food inflated while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month for all segments except for 1 Supplies dip. In May Product 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 prices grew. 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 Aug, Food drove a drop. In Sep, Products fueled a drop. Services drove a lift in Oct. In Nov, all were up. In Dec, Total Pet fell. In Jan>Feb, the segments were split but Pet hit a record high.

  • 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 rose Jan>Sep 23, fell Oct>Dec, rose Jan>Oct 24, fell Nov, then rose Dec>Feb to a record high but 28.1% of the increase since Dec 19 happened from Jan>Jun 22 – 10% of the time.
  • Pet Food – Prices were at the Dec 19 level Apr 20>Sep 21. They grew & peaked May 23. Jun>Aug ↓, Sep>Nov↑, Dec>Feb↓, Mar↑, Apr>May↓, June↑, Jul>Oct↓, Nov↑, Dec↓, Jan>Feb↑. 99% of the lift was in 22/23.
  • Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They had a deflated rollercoaster 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. 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↑, Mar/Apr↓, May/Jun↑, July↓, Aug↑, Sep/Oct↓ & Nov/Dec↑, Jan>Feb↓.
  • 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>Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug↑, Sep>Dec↓, Jan>Mar 24↑, Apr↓, May↑, June↓, Jul>Nov↑, Dec>Feb↓.
  • 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>Feb.
  • 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 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 (record), fell Jul>Sep, rose Oct>Nov, fell in Dec, then rose in Jan>Feb to a record high.

Next, we’ll turn our attention to the Year Over Year inflation rate change for February and compare it to last month, last year and to previous years. We will also show total inflation from 21>25 & 19>25. Petflation rose from 2.0% to 2.4% but it is still below the National inflation rate (by -14.3%). The chart will allow you to compare the inflation rates of 24>25 to 23>24 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 0.4% from January and were +2.8% vs Feb 24, down from +3.0% last month. Grocery inflation was stable at 1.9%. Like January, only 2 had price decreases from last month – both Pet: Supplies & Services. There were also 2 drops in Oct/Nov but 3 in Aug/Sep/Dec and 5 in July. The national YOY monthly CPI rate of 2.8% is down from 3.0% and is 12.5% below the 23>24 rate and 65% less than 21>22. The 24>25 rate is above 23>24 for 4 – Groceries, Medical Services, Veterinary & Haircuts. In our 2021>2025 measurement you also can see that over 80% of the cumulative inflation since 2019 has occurred in 6 segments, 4 are Pet – all but Vet, plus Groceries & the CPI. Except for Pet & Vet Services, where prices have surged, 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>25 inflation surge provided 98% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were still recovering from a deflationary period. Services expenditures account for 63.8% of the National CPI so they are very influential. Their current CPI is +4.1% while the CPI for Commodities is 0.5%. This clearly shows that Services are driving almost all of the current 2.8% inflation. The situation in Pet is even worse. Petflation is currently 2.4%. The combined CPI for the 2 Service Segments is 6.6%, while the Pet Products CPI is -0.6%.

  • U.S. CPI– Prices are +0.4% from Jan. The YOY increase is 2.8%, down from 3.0%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 40+% higher than the target. The February decrease follows 4 straight lifts after 6 consecutive drops from Apr>Sep. The current rate is below 23>24 but the 21>25 rate is still +21.3%, 81.3% of the total inflation since 2019. The Inflation surge hadn’t started in January 2021, +1.7%
  • Pet Food– Prices are +0.6% vs Jan and +0.4% vs Feb 24, a big change from -1.1%. They are still far below the Food at Home inflation rate of +1.9%. February is the first inflationary month for Pet Food since +1.8% in March 2024 – 11 straight deflationary months. The 2021>2025 inflation surge generated 92% of the 25.0% inflation since 2019. Inflation began for Pet Food in June 2021.
  • Food at Home – Prices are up +0.1% from January, but the YOY increase stayed stable at 1.9%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 28.6% Inflation for this category since 2019 is 9% more than the national CPI but only in 5th place behind 3 Services expenditures (2 Pet) and Total Pet. 81.1% of the inflation since 2019 occurred from 2021>25. This is about the same as 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 surge.
  • Pets & Supplies– Prices were -0.7% from January and YOY pricing flipped to -1.0% from +0.6%. They still have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>25 inflation surge accounted for 116% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a record high in Feb 23. Prices fell in March, rose Apr/May (record), fell Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell July, rose Aug, fell Sep>Oct, rose Nov>Dec, fell Jan>Feb
  • Veterinary Services– Prices are +2.3% from Jan (biggest lift since 2.5% in Mar 23) and +8.1% from 24, up from 6.6%. They are #1 in inflation vs 24 and still the leader since 2019 with +47.3% and since 2021, +35.3%. For Veterinary, high annual inflation is the norm. However, the rate has increased during the current surge, especially since 23. They have the highest rate in 25, and now 75% of the cumulative inflation since 2019 occurred from 2021>25.
  • 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 +0.3% from Jan, and inflation vs last year rose to +3.0% from +2.7%. Medical Services are not a big part of the current surge as only 49.2% of the 18.1%, 2019>25 increase happened from 21>25.
  • 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, rose Jul>Nov, then fell in Dec>Feb 25. Their rate has plummeted from 11.5% in Dec to 4.4% and they fell to #3 in YOY inflation. However, 80.9% of their total 19>25 inflation is from 21>25. In Dec 23, it was 49%.
  • Haircuts/Other Personal Services – Prices are +0.4% from Jan and +4.7% from Feb 24. 12 of the last 14 months have been 4.0+%. Inflation has been pretty consistent. 65.0% of the 19>25 inflation happened 21>25.
  • Total Pet– Petflation rose to 2.4% from 2.0%. 2 segments had a higher rate and 2 were lower. It is 31% less than the 23>24 rate and 14% below the U.S. CPI. Plus, 2.4% is 22.6% below the 3.1% average February rate since 1997. Feb prices rose 0.8%, driven by Vet & Food. The Jan>Feb increase was expected (all yrs but 2018) but double the 97>24 0.4% average change. Another big factor in the CPI increase was that prices only rose 0.3% in Jan>Feb 24. After a strong December & January, February may be another pause in the long recovery.

Now, let’s look at the YTD numbers.

The 24>25 rate is lower than 23>24 for all but Medical Services, Groceries & Haircuts. The 22>23 inflation rate was the highest for Groceries and all pet categories but Supplies. 21>22 has the highest rate for Pet Supplies and the National CPI. The average national inflation in the 6 years since 2019 is 4.0%. Only 3 of the categories are below that rate – Medical Services (2.8%), Pet Supplies (1.9%) and now Pet Food (3.8%). It is no surprise that Veterinary Services has the highest average rate (6.6%), but all 4 other categories are +4.3% or higher.

  • U.S. CPI – The 24>25 rate is 2.9%, only down 6% from 23>24, but it is down 53% from 22>23, 62% less than 21>22 and 27.5% below the average increase from 2019>2025. However, it’s still 61% more than the average increase from 2018>2020. 82% of the 26.2% inflation since 2019 occurred from 2021>25. Inflation is a big problem that started recently.
  • Pet Food – Ytd prices are still deflated -0.3%, but up from -1.1% in Jan. That’s a big change from 3.7% in 23>24, 15.1% in 22>23 and the 2.1% 2018>20 average. However, it is still higher than the -0.7% deflation in 20>21. Pet Food has the highest 22>23 rate but is only #5 in the 21>25 rates. Deflation in the 1st half of 2021 kept YTD prices low then they surged in 2022 and especially in 2023. 91% of the inflation since 2019 occurred from 2021>25.
  • Food at Home – The inflation rate is up from 23>24 but at 1.9%, it is down 82% from 22>23, 76% from 21>22 and 47% from 20>21. However, it is more than double the average rate from 2018>20. It is only tied for 4th place for the highest inflation since 2019 but still beat the U.S. CPI by 10%. You can see the impact of supply chain issues on the Grocery category as 81% of the inflation since 2019 occurred from 2021>25.
  • Pets & Pet Supplies – A true roller coaster, prices rose Jan>Feb 24, fell Mar>Apr, rose May>Jun, fell July, rose Aug, fell Sep>Oct, rose Nov>Dec, then fell Jan>Feb. Currently, prices are deflating vs 24. Supplies have the lowest inflation since 2019. The biggest lifts since 2019 were in 22 & 23. The 2021 deflation created an unusual situation. Prices are up 11.9% from 2019 but 113% of this lift happened from 21>25. Prices are up 13.5% 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 2025, +7.3%, the highest on the chart. They are also #1 in inflation since 2019 and since 2021. At +6.6%, they have the highest average 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. In 2025 it is 2.9%, just slightly above the 2.8% 2019>25 average rate. However, it is being measured against 2024 when prices had the lowest inflation rate of any year at least since 2019.
  • Pet Services – After falling in late 2023, prices surged in 2024, then fell in 2025. The 24>25 inflation rate of 4.9% is 2nd to Veterinary on the chart. It is only their 4th highest rate but is 1.7 times higher than their 2018>21 average rate. Pet Services is 2nd in both 19>25 and 21>25 inflation.
  • Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. 2025 inflation is 4.6%, 18% below its 21 peak, but 39% above the 18>20 average. Consumers are paying over 30% more than in 2019, which usually reduces the purchase frequency.
  • Total Pet – 2025 Petflation is 2.2%, up from 2.0% in Jan, but it is 80% less than 22>23 and even 3% lower than the 2018>21 average rate. Plus, it is 24% below the CPI. Despite the YOY lift in February, Petflation is still low. This was primarily driven by Ytd deflation in Pet Products and lower inflation in Services, while Veterinary continues to reach new record highs. The patterns were definitely mixed but the the “need” segments (Food & Vet) drove the small lift.

The Petflation recovery paused in Aug, came back Sep>Oct, paused in Nov, then resumed in Dec>Jan. With a lift to 2.4% from 2.0%, February may be another pause, but the rate is still 23% below the 25 yr monthly average. We tend to focus on monthly YOY inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 23.6% above 2021 and 28.7% higher than 2019. Those are big lifts. In fact, current prices for Total Pet & Vet are at record highs and the other segments are within 2% of the highest in history. Only Supplies prices (+11.3%) are less than 25% 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. At SZ & GPE 24 and now GPE 25, a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

Attending GPE 2025? It is a showcase for New but has everything that you need! However, You Definitely Need a Plan!

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The first Global Pet Expo (APPMA) occurred 67 years ago with 17 exhibitors in 30 booths. The industry & the show have both come a long way since then.  The show is again full strength and attendees at GPE 25 will see and experience:

  • 1118 separate exhibitor booths
  • With over 350,000 square feet of booths (Plus 45,000 sq ft for the New Product Showcase) Global Pet Expo 2025 actually occupies about 18 acres of prime Florida “real estate”.
  • 3000+ new items in the New Product Showcase and the exhibit floor. Plus, 270 Exhibitors “new” to Pet Shows
  • Sharing the aisles with an expected 20,000 attendees, including more than 6000 “buyers”.
  • The opportunity to choose from 50+ educational sessions across 3 days from March 26-28
  • 5 miles of aisles – just to walk the exhibit floor

The show floor is open for 23 hours so let’s put this in perspective and… “Do the Math!”

 If you don’t attend any seminars, visit the New Product Showcase, stop to chat with anyone in the aisles or for food, a drink or to go to the bathroom and maintain a walking speed of 2.5 mph, you can spend about 1 minute & 8 seconds with each exhibitor…You definitely need a plan!

Global Pet Expo definitely has it all… and more. Attendees will find the broadest selection of products and services from 40 countries while Exhibitors have the opportunity to reach a wide range of buyers across all retail channels.

First and foremost, Global is about Pet Products – Food, treats and a vast array of Supply categories. A regular flow of New Products is always critical to keep businesses and the whole industry strong and growing. Private label is still a hot trend and there is a new huge China Pavilion and over 130 exhibitors actively pushing OEM. Obviously, you must take the time to visit the New Product Showcase. You should also sign up for any relevant classes, network with other industry professionals and…walk the whole show.  There are at least twice as many new products being “launched” on the show floor as there are on display in the New Product Showcase. Plus, 30% of GPE 25 exhibitors did not exhibit at a GPE from 2019>24 and 80% of those companies did no pet shows during that period. GPE is about gathering info and making decisions to improve your business – whether they are made on the spot or put on your “must do” list.

Every business can improve in terms of products. If you are a retailer, what sections of your store are not doing as well as you hoped and need a “facelift” or conversely, what areas are growing and need products to fill additional space? Category managers for distributors and retail chains may only be interested in targeted visits to exhibitors relevant to their “categories”. Representatives may be looking for new manufacturers…in specific product categories. Manufacturers could be looking to find distributors to handle their products or just looking to “check out” the competition. In regard to products, there is always something to see…for everyone!

And Global is the place to see it. It’s all there! With so much to see and do, Time is perhaps the most valuable commodity at the show. How do you make the most of your time on the show floor? Here’s an idea.

In 2014 I first designed a tool in Excel, the Super Search Exhibitor Visit Planner to make “working Global & SuperZoo easier and more productive for ALL attendees – retailers, distributors, reps, groomers, vets…even exhibitors. I have updated the data and produced a tool for every GPE and SuperZoo since then…including GPE 2025.

The “update” is not just exhibitor lists but also to the product category offerings for every exhibitor. I reviewed every exhibitor profile on the show site, but I also visited over 1400 websites and conducted separate internet searches to “validate” the product offerings. It is not 100% accurate, but it is close.

What does the SuperSearch do?… It searches for and produces a list of Exhibitors by product categories.

  • From the simplest – “give me a list that I can look at on my phone or tablet in either Booth # order or alphabetically”
  • To the most complex…”can do a simultaneous search for multiple specific product categories, allowing you to personally narrow down the initial results and see the “final” alphabetically or by booth number. The GPE Super Search Exhibitor Visit Planner does both…and more…and does it quickly! Take a look at the Quick Start Guide. You will see that it looks complex but is really quite simple.

GPE 2025 Super Search Exhibitor Visit Planner – Quick Start Guide

First: When you download the Excel file, Remember to Enable Editing & Macros!

The GPE Super Search Exhibitor visit planner is designed to make your time on the show floor more efficient and more productive. With the Super Search you can conduct up to 5 separate and distinct product category searches simultaneously with consolidated results produced in booth # order to facilitate your “journey”. There are detailed instructions for reference and to help you understand the nuances of the tool. However, it is really very simple so let’s get started. (Note: No changes in instructions from 2024) Here is the Dashboard where you set up your searche

On the dashboard, the first things to note are the numerous category columns. There are 8 different floor sections, 11 different Exhibitor or Animal Types and 33 Dog and/or Cat Product categories. You can search exhibitors for any combination of these.

Let’s take a specific example running 3 simultaneous searches for several Dog/Cat categories:

  • Toys
  • Treats
  • Catnip & Litter (Must sell both)

Now referring to the Dashboard, let’s take it by the numbers:

  • This column is where you activate each search. Type in a “Y” (Cells C3>C7 will auto-capitalize) This search “line” becomes active.(cell turns green) In our example we are running 3 searches so we have 3 “Y’s”
  • Now we enter a 1 in the correct column for each search line. Search Line 1: Toys; Search Line 2: Treats.
  • In Search Line 3 we want exhibitors that sell both Catnip and Litter so we put a 1 in both of these columns.
  • Now we just “click” the Execute Search Button. The searches are done simultaneously and the results combined into a single list in alphabetical order.
  • If you would like to view the list in Booth # order, just click the Booth # Sort.
  • You can switch the list back to an alpha view by clicking the Alpha Sort Button.
  • To Clear all your search categories and start a new search, Click the Clear Criteria Button. Then click Execute (#4) again and you will be back to the full list

Note: Any Search Line with a Y and no 1’s in any column will always deliver the entire list regardless of what is selected in other lines. Change the Y back to an N in unused search lines. Now a sample of the results:

Company A – Has Toys Only; Company B has Dog Treats Only; Company C is on the list for Treats and also has Catnip, but no Litter. This is not unusual as Catnip is often a Treat; Company D has Treats & Toys. Company E has both Catnip and Litter and in fact, actually has it all!

Note: The Super Search highlights your search categories so you know “why you are there”. However, it also shows all categories that are available. Some might “pique” your interest while you are visiting the booth.

You can review the exhibitors alphabetically then put the list in Booth # order to make it easier to “work”. The Super Search also allows you to “cut down” the list during your review. (Pg 2; Point #11 – “U Pick ‘em” in Detailed Instructions) But First, I suggest that you “play” with the Super Search to get a “feel” for the tool, and then review the Detailed Instructions. With your “play” experience, the detailed instructions will become a “quick read” and a valuable reference. You will soon be “up to speed” on the full capabilities of Super Search. Good Luck and Good “Hunting” at GPE 2025!

Ready to Start Planning?

Use the links below to download the Super Search Tool (Be Sure to Enable Editing/Macros/Content if asked by your computer), the Quick Start Guide and the Detailed Instructions. Then GET STARTED!

Click to download Super Search Quick Start Guide (PDF)
Click to download Super Search Detailed Instructions (PDF)

NOW DOWNLOAD THE SEARCH TOOL

(For the Excel file to work on your computer, be sure to enable saving/macros/editing/content if asked.)

Click to download GPE 2025 Super Search 4-2 FINAL (Excel)

NOTE: Global Pet Expo 2025 is open so this is the Final/For the record Super Search.

 

Retail Channel $ Update – December Monthly & January Advance

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In January, YOY Commodities’ inflation rose to 0.8% from 0.3%. Even with a low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw some evidence of this in January. Total Retail $ were +4.81% vs 24, 0.9% above the average 92>24 lift but Relevant Retail was +4.0%, -15.5% below the January average. The situation is mixed and complex and there is still a long road to full recovery. 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 December Monthly Report and then go to the January 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:     (Note: December Ytd data = Year-End, Annual Numbers & January monthly data = 2025 Ytd)

  • 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 December Monthly. Only Relevant & Total were up from November and there were 3 actual sales drops –  all in Gas Stations. We should note: Gas Stations are still selling less product than in 2019. Also, Relevant Retail is all positive again. They have been all positive in 10 of the last 13 months and now in 6 of the last 7. ($ are Not Seasonally Adjusted)

The December Monthly is $4.9B more than the Advance report. Restaurants: +$0.9B; Auto: -$0.1B; Gas Stations: +$0.3B Relevant Retail: +$3.7B. Relevant Retail was the driver in the $ales lift vs November, but only Gas Stations were down. A Nov>Dec increase in Total Retail  has happened every year since 1992. However, the 8.6% lift was 41% below average. There were 3 drops in actual sales – Monthly vs 23 & 21 and Ytd vs 23 for Gas Stations. There were 3 “real” sales drops, 1 more than November. All but Gas Stations & Restaurants 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 December in the Stacked Bar Graph Format

Overall– 10 of 11 were up from November. Vs Dec 23, 10 were actually and “really” up. Vs Dec 21, 6 were up but only 5 were real increases. Vs 2019, All were actually up and only Off/Gift/Souv and Disc Dept Stores were really down.

  • Building Material Stores – The pandemic focus on home has produced sales growth of 32.1% since 2019. Prices for the Bldg/Matl group have inflated 9.3% from 2021 and 21.5% from 2019 which is having an impact. Sales vs November were -9.4% for HomeCtr/Hdwe but +5.5% for Farm Stores. Vs other years, HomeCtr/Hdwe are only actually & really down vs Dec 23, but Farm stores are actually and really down in all comparisons but vs Dec 23 & 2019. Only 27% of the Building Materials group’s 19>24 lift was real. Avg 19>24 Growth: HomeCtr/Hdwe: 5.6%, Real: 1.5%; Farm: 6.5%, Real: 2.4%
  • 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 now 3.6 times higher than the rate for Drug/Med products. Drug Stores are positive in all measurements and 67% of their 2019>24 growth is real. Supermarkets’ actual $ are up in all measurements and they are only “really” down vs 2021. However, only 6.5% of their 19>24 increase is real growth. Avg 19>24 Growth: Supermarkets: +5.3%, Real: +0.4%; Drug Stores: +5.4%, Real: +3.8%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are up 41% from November but their only other positives are vs Dec 23 & Ytd vs 19. Prices are still deflating, -2.0% 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 61% of their 34.5% lift since 19 is real. Avg 19>24 Growth Rate is: +6.1%; Real: +3.9%.
  • Gen Mdse Stores – All actual & real sales were up for Club/SupCtrs & $ stores. However, even with an 28.0% increase from November, Discount Dept Stores were only actually up vs 19. All of their real measurements are negative so none of their growth since 2019 is real. The other channels average 44% in real growth. Avg 19>24 Growth: SupCtr/Club: 6.0%, Real: 2.8%; $/Value Strs: +6.4%, Real: +3.2%; Disc. Dept. Strs: +1.2%, Real: -0.8%.
  • Office, Gift & Souvenir Stores – After a big drop in November, Sales rose 38.8% in December. They are only actually up vs Dec 23 & Ytd vs 19 and all of their real sales numbers, but vs Dec 23 are negative. Their recovery started late, and their progress slowed but may be restarting again. Avg Growth Rate: +0.003%, Real: -1.9%
  • Internet/Mail Order – Sales are +13.9% from November and set a new monthly record of $147.7B. All measurements are positive, but their Ytd growth, +10.3%, is still only 66% of their average since 2019. However, 82.0% of their 106.7% growth since 2019 is real. Avg Growth: +15.6%, Real: +13.4%. 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 Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew in Oct, fell in Nov, then rose in Dec. All measurements are again positive and they are in 2nd place, behind the Internet, in the % increase vs 19 and vs 21. Also, 73% of their 53.2% growth since 2019 is real. Average 19>24 Growth: +8.9%, Real: +6.8%

December had its usual lift vs November, but the Relative Retail lift was -43% below avg. However, 10 small channels were up. The YOY lift was avg for Total, but 20% above avg for Relevant. Also, 10 smaller channels and 4 of 5 big groups were up. Prices are still deflating in 7 channels, but cumulative inflation is impacting $ as only 5 channels were really up vs Dec 21. The Retail Recovery is still slow. The December commodities CPI was 0.3% but rose to 0.8% in January. Let’s see if it impacts Retail.

Dec>Jan sales were down for all. A Dec>Jan Total Retail decrease has happened every year since 1992 but the  -16.5% drop is -23% less than average. All YOY $ comparisons are positive for the first time since Jan 23. The Total Retail lift of 4.8% vs January 24 was 0.9% above their 92>24 average but the Relevant Retail lift vs Jan 24 was -15.5% below average. The Gas Station lift was also below average (-54%). However, the YOY lifts for Restaurants (+24% vs avg ) & Auto (+47% vs avg) were both significantly above average. Inflation is still a factor. The CPI for all commodities rose to 0.8% but it is 18.5% vs 21. The inflation surge was just beginning back then. There is some other “real” news. Only 2 measurements were “really” down. In December, there were 3 but back in September there were 5. All but Gas Stations were YOY all positive. After 2 months with a negative, Relevant Retail has now been all positive in 8 of the last 9 months.

Overall – Inflation Reality – For Total Retail, inflation rose to +0.8% but YOY sales grew 4.8% vs 24. For Restaurants, inflation remains high, +3.3% but their sales rose 6.9% vs 24. Gas prices rose and that group is still in turmoil. Auto prices stopped deflating but their sales grew +6.8% vs Jan 24 and they are again all positive. Inflation remained stable at 0.5% for Relevant Retail and YOY sales are still all positive. Their slow progress continues.

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>Jan 25. Prices are now +0.8% but YOY sales are up 0.9% above the 92>24 average. The lift is still -27% below the 19>25 avg. but now 50.9% of the 19>25 growth is real, up from 39.1%. Low inflation is helping but cumulative inflation is still having an impact. Growth: 24>25: 4.8%; Avg 19>25: +6.6%, Real: +3.6%.

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. January $ are up vs 24 and they have the biggest lifts vs 23, 21 & 19. Inflation slowed to 3.3% in January but is still +24.6% vs 21 and +29.8% vs 19. Their 6.9% YOY lift is 24% above their 92>24 avg but -16% below 19>25. Plus, just 39.2% of their 60.9% growth since 2019 is real and they remain 3rd in performance behind Relevant & Total Retail. Recovery started late but inflation started early. Growth: 6.9%; Avg 19>25:+8.2%, Real: +3.6%. They just account for 13.6% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They worked to overcome the stay-at-home attitude with great deals and 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 $. Their YE real 2022 sales numbers were even worse, -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 Oct, fell Nov, then grew in Dec>Jan 25. Jan $ were +6.8% vs 24, 47% above avg & 10% above 19>25. All comparisons are positive, but only 34.1% of 19>25 growth is real. Growth: 6.8%; Avg 19>25: +6.2%, Real: +2.3%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started to recover in Mar 21 and inflation began. Sales got on a rollercoaster in 22 but set a record, $583B. Inflation started to slow in Aug and prices slightly deflated in Dec & Feb 23, then strongly fell in Mar>Jul to -20.2%. In Aug 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 June, rose July, fell Aug>Dec, then rose in Jan. In Jan, actual $ are up in all comparisons vs 24, 21 & 19. Real sales are down vs 21 & 19. Their Jan lift is -54% below avg and -47% below 19>25.  Growth: 2.4%; Avg 19>25: +4.5%, Real: -0.8%. They show the cumulative impact of inflation and 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 Jul>Aug, fell Sep, then rose Oct>Jan 25. The Jan 4.0% YOY lift is -15.5% below their 92>24 avg and -39% below 19>25. However, 55% of their 47.0% 19>24 growth is real – #1 in performance. Growth: 4.0%; Avg 19>25: +6.6%, Real: +3.9%. In 2024 their inflation rate dropped from 3.2% to 0.1% and stabilized at 0.5% Dec>Jan but its cumulative impact continues to slow growth. We see this in January. We’ll see what happens in the upcoming months.

In 24>25 inflation has slowed, but its cumulative effect has produced a mixed bag. Actual sales comparisons for all big groups are all positive for the 1st time since Jan 23. In January, there were only 2 real drops – both from Gas Stations. In YOY lifts Total Retail’s Jan 4.8% lift was +0.9% above avg. Restaurants were +24% & Auto +47% vs avg. Gas Stations were -54% vs avg and Relevant Retail’s was -15.5% below avg. All $ comparisons – actual & real are positive for all but Gas Stations. (now 8 of 9 months for Rel. Rtl) Overall, January was pretty good. The slow recovery continues.

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

  • Relevant Retail: Growth: +4.0%; Avg: +6.6%, Real: +3.9%. 11 were down from Dec. Vs Jan 24: 10 were up, Real: 10, Vs Jan 21: 10 were up, Real: 6. Vs 19: Only Dept Stores were really down.
  • All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 2020. Sales are -44.4% from December but only their real numbers vs 21 & 19 are negative. Their Jan 1.4% is much more than the -0.4% avg. and it is 2.3 times bigger than the 19>25 avg.  Growth: 1.4%; Avg 19>25: 0.6%, Real: -0.9%.
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -21.2% from Dec, but they are positive in all measurements. However, only 50% of their 39.9% 19>25 lift is real. Their 5.8% lift is -30% below their 92>24 avg. but equal to 19>25. Growth: 5.8%; Avg 19>25: +5.8%, Real: +3.1%.
  • Grocery- These stores depend on frequent purchases, so their changes are usually less radical. Actual $ are -3.1% from Dec but positive in all comparisons. However cumulative inflation has hit them hard. Real $ are down vs 21 and only 10% of 19>25 growth is real. Their 5.2% lift is 66% above avg & +6% vs 19>25. Growth: 5.2%; Avg 19>25: +4.9%, Real: +0.5%.
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -11.3% from Dec but they are positive in all comparisons. Inflation has been relatively low so 63% of their 31.9% 19>25 growth is real. Their YOY lift is -11% below avg and -2% below 19>25. Growth: 4.6%; Avg 19>25: +4.7%, Real: +3.1%
  • Clothing and Accessories – Clothes mattered less when you stayed home. That changed in March 2021 with strong growth through 2022. Sales are -51.8% from Dec but all sales comparisons are positive. 54% of their 19>24 growth is real. Their 3.6% YOY lift is 7% above avg but only equal to 19>25.  Growth: 3.6%; Avg 19>25: +3.6%, Real:+2.7%
  • 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 22. Sales are -16.8% from Dec but only really negative vs 21. However, only 28% of their 19>25 growth is real. YOY lift: 58% above avg & 73% above 19>25. Growth: 5.2%; Avg 19>25: +3.0%, Real: +0.9%
  • 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 -31.6% from Dec but they are now positive in all comparisons. They have had strong deflation and their 25 growth is only 0.2%, -90% below avg, but more than 19>25 (0%). Growth: 0.2%; Avg 19>25: +0.0%, Real: +3.3%.
  • 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, but sales are -10.2% from Dec. Actual sales are all positive and Real sales are only down vs 21, but just 5% of their 19>25 sales growth is real. Their 24>25 sales lift is -84% below avg and -81% below 19>25. Growth: 0.7%; Avg 19>25: +3.6%, Real: +0.2%.
  • 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 sales rollercoaster since June but $ are -43.6% from Dec and only actual and real sales vs 19 are positive. However, 77% of their 19>25 growth is real. Sales are  -4.3% vs 24. Their 92>24 avg Jan lift is 2.9%. 19>25 is 3.4%. Growth: -4.3%; Avg 19>25: +3.4%, Real: +2.6%.
  • 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 -14.8% vs Dec but positive in all comparisons. They are 2nd in the % increases vs 19 & vs 21. 74.3% of their 51.3% 19>25 growth is real. Their 6.6% YOY lift is 52% above their 92>24 avg, but -7% below 19>25. Growth: +6.6%; Avg 19>25: +7.1%, Real: 5.5%.
  • 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 -23.3% from Dec. Their YOY lift is -60% below their avg and -71% below 19>25. They are positive in all comparisons and 83% of their 111.6% 19>25 growth is real. Growth: 3.8%; Avg 19>25: +13.3%, Real: +11.6%.

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 7 channels are currently deflating. Any deflation should help the Retail Situation. As expected, $ fell from December for all 11 channels but the -21.5% drop for Relevant Retail was 25% less than avg. Their 4.0% lift vs Jan 24 was 15.5% below avg, but 10 of 11 smaller channels had a $ increase and sold more product. 5 of those lifts were above avg. Perhaps the best news is that all big groups & 10 smaller channels were positive in all actual sales comparisons. Factoring inflation into the numbers, 4 big groups and 6 channels were “all positive”. Relevant Retail has now been all positive in 8 of the last 9 months. The biggest negative is the smaller lift by Relevant Retail. However, it is primarily being driven by a few larger channels – NonStore, SuprCtr/Clubs/$ & Bldg Matl/Farm. Overall, January sales were much lower than December, but the performance shows that the recovery continues.

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)

Here are some answers to some obvious questions. ALSO NOTE: 4 of the 8 January “pinks” are just slowed deflation

  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.