Retail Channel $ Update – January Monthly & February Advance

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In February, YOY Commodities’ inflation rose slightly to 1.2% from 1.0%. Even with a low inflation rate, high cumulative inflation vs 21 can still impact consumer spending and slow $ales growth.  We saw evidence of this in February. Total Retail $ were +3.6% vs 25, 21.8% below the average 92>25 lift and Relevant Retail was +3.8%, still -18.5% below the February average. The situation is 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 – normally, 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 January Monthly Report and then go to the February 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: January monthly data = 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 January Monthly. All were down from December but there were only 2 actual sales drops – monthly/ytd vs 25 in Gas Stations. We should note: Gas Stations are still selling a little more product than in 2019. Also, Relevant Retail is all positive again. They have been all positive in 20 of the last 22 months.            ($ are Not Seasonally Adjusted)

The December Monthly is $0.3B less than the Advance report. Restaurants: -$0.1B; Auto: +$0.4B; Gas Stations: +$0.5B; Relevant Retail: -$1.3B. Relevant Retail was the driver in the $ales drop vs December, but all were down. A Dec>Jan decrease in Total Retail  has happened every year since 1992. However, the 17.4% drop was 17.5% less than average. There were 2 drops in actual sales – Monthly/Ytd vs 25 for Gas Stations. There were no “real” sales drops, the same as December. All but Gas Stations 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 53.8% of their growth is real.

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

Overall– All 11 were down from December. Vs Jan 25, 9 were actually and 6 “really” up. Vs Jan 21, 10 were up but only 5 were real lifts. Vs 2019, Dept Strs & Off/Gift/Souv were actually & really down, but Home/Hdw was also really down.

  • Building Material Stores – The pandemic focus on home has produced $ growth of 27.2% since 2019. Prices for the group have inflated 26.3% from 21 and 28.9% from 2019, which is having an impact. HomeCtr/Hdwe Sales vs Dec were -11.0% & -17.6% for Farm Stores. Vs other years, HomCtr/Hdwe are actually up & really down for all. Farm stores are actually up for all, but their Real $ were down vs 25 & 21. Bldg/Mat group’s 19>26 real growth was -1.3%. (avg -0.2%) HomeCtr/Hdwe: Jan: 2.0%; Avg 19>26 Growth: 3.2%, Real: -0.5%; Farm: Jan: +5.3%; Avg: 5.2%, Real: 1.5%
  • Food & Drug – Both are essential. Except for the COVID food binge, they tend to have smaller changes in $. Vs Dec: Supermarkets: -3.4%; Drug: -14.2%. In terms of inflation, the Groceries rate is 7 times higher than Drug/Med products. Drug Stores are positive in all measurements and 64.0% of their 2019>26 growth is real. Supermarkets’ actual $ are up in all comparisons, but they are only “really” up vs 2019 and only 9.2% of their 19>26 increase is real growth. Supermarkets: Jan: +1.8%; Avg 19>26: +4.5%, Real: +0.5%; Drug Stores: Jan: +1.2%; Avg: +4.3%, Real: +2.9%.
  • Sporting Goods Stores – They also benefited from the pandemic in that consumers turned to self-entertainment, especially sports & outdoor activities. Sales are -45.3% from Dec, but their only negatives are actual & real vs 21. Prices stopped deflating vs last year. Deflation started in April 23 and was a big change from +1.1% in 22>23 & +7.9% in 21>22. This caused 74% of their 48% lift since 2019 to be real. Jan: 4.1%; Avg 19>26: +5.7%; Real: +4.4%
  • Gen Mdse Stores – Sales were -23.1% vs Dec. All YOY comparisons were up for $ Strs & SupCtr/Clubs. Dept Stores are negative in all comparisons but actual vs Jan 21. Their Actual sales are even -33.6% from 19 (Real: -40.6%). The other channels have an average of 46.9% in real growth. SupCtr/Club: Jan:+3.5%; Avg 19>26: 5.2%, Real: 2.6%; $/Value Strs: Jan: +5.6%; Avg: +5.6%, Real: +3.0%; Dept. Strs: Jan: -9.8%; Avg: -5.7%, Real: -7.2%.
  • Office, Gift & Souvenir Stores– Sales fell -35.8% from Dec. They are actually up vs Jan 21. All others are down. Their recovery started late. It was slowly restarting in Jun/Jul, but their progress had slowed. It took off in Oct, slowed in Nov, grew in Dec, then slowed in Jan. Recovery takes some time. Jan: -2.7%; Avg Growth Rate: -0.9%, Real: -2.4%
  • Internet/Mail Order – Sales are -25.9% from Dec to $116.1B, a Jan record. All YOY measurements are positive, but their YOY growth, +7.8%, is only 56.5% of their average since 2019. However, 82.3% of their 146.8% growth since 2019 is real. Jan: +7.8%; Avg Growth: +13.8%, Real: +12.0%. 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 $100B for the 1st time in 21. In 22 their $ dipped in Jan, Jul, Sep>Nov, rose Dec, fell Jan>Feb 23, grew Mar>May, fell Jun>Aug, rose Sep>Nov, fell Dec>Jan 24, grew Feb>May, fell Jun>Sep, grew Oct, fell Nov, rose Dec, fell Jan>Feb, grew Mar>May, fell Jun>Sep, rose Oct, fell Nov, rose Dec, fell Jan 26. All comparisons are positive, and they are #2 in the increase vs 2019 but now #1 vs 2021. Also, 78.7% of their 97.6% growth since 2019 is real. Jan: +12.6%; Avg 19>26: 10.2%, Real: +8.5%

Jan had its usual drop vs Dec, but the Rel Retl drop was 24% below avg. However, all small channels were down. The YOY lift vs 25 was below avg for Total: -36% & Relevant Retl: -15%, but 4 big groups & 9 smaller channels had lifts. Also, prices are only deflating in Auto & Gas Stations, but cumulative inflation has an impact, as only 5 channels were really up vs Jan 21. The Recovery is slow. In Feb, the commodities CPI rose from 1.0% in Jan to 1.2%. Let’s see if it impacts Retail.

Jan>Feb sales were down for all but Auto. A Jan>Feb Total Retail drop has happened in 65% of the years since 1992. The -3.1% drop is 4.3 times the -0.7% avg. BTW: The -5.3% Jan>Feb drop by Relevant Retail was 2.3 times bigger than their -2.3% avg. There were 2 YOY $ drops, the same as Jan. 4 Big Groups were up vs 25 but the Total Retail lift of 3.6% vs Feb 25 was 22% below their +4.6% 92>25 avg. Plus, the Relevant Retail 3.8% increase vs Feb 25 was 18.5% below their +4.6% avg. Inflation is still a factor. The CPI for all commodities rose to 1.2% from 1.0% vs last year but it is still +19.5% vs 21. There is some good “real” news. Like the Jan Monthly, no “real” measurement was down. Plus, Gas Stations are again selling more Gas than in 2019. Also, 4 Big Groups are again all positive, the same as Dec/Jan. Note: Relevant Retail has now been all positive in 21 of the last 23 months.

Overall Inflation Reality– The Total Retail CPI rose to only 1.2% but the $ lift vs 25 was still 22% below avg. The Restaurant CPI slowed to +3.8% but their $ lift was still 6% below avg. Gas prices rose to -5.5%. They are still in turmoil. Auto inflation is -0.9% vs 25 but +18.6% vs 21. Sales were +3.7% vs 25, 13.4% below their 4.3% avg change. Inflation rose to 2.2% for Relevant Retail and their lift was 18.5% below avg, but they are again all positive. Progress has slowed in 2026.

Total Retail – Since Jun 20, every month but Apr 23, Jun 24 & Feb 25 has set a monthly $ales record. In 2023>26, Sales got on a roller coaster. Up Jul>Aug, down Sep, up Oct>Dec, down Jan 24, up Feb>Mar, down April, up May, down Jun, up Jul>Aug, down Sep, up Oct>Dec, down Jan>Feb 25, up Mar, down Apr, up May, down Jun, up Jul>Aug, down Sep, up Oct, down Nov, up Dec, down Jan>Feb. Prices are 1.2% and YOY $ are +3.6%, 22% below avg. 43% of 19>26 growth is real. Inflation slowed but cumulative inflation is still impacting sales. Growth: 25>26: 3.3%; Avg 19>26: +6.0%, Real: +2.9%.

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. February $ are up vs 25 and they have the biggest lifts vs 21 & 19. Inflation slowed to 3.8% vs last year, but it is +29.8% vs 21 and +35.1% vs 19. Their 5.0% YOY lift is 6% below their +5.4% 92>25 avg. They are all positive again, but just 34% of their 65% growth since 2019 is real. They fell from 3rd  to 4th in performance. Recovery started late but inflation started early. Growth: 5.0%; Avg 19>26: +7.4%, Real: +2.9%.They just account for 13.8% of Total Retail $, but their strong growth has helped Total Retail.

Auto (Motor Vehicle & Parts Dealers) – They overcame 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 was due to high 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 22 sales numbers were even worse, -8.2% vs 21 and -8.9% vs 19. 23 started a sales rollercoaster but the $ hit a 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, grew Dec, fell Jan>Feb 25, grew Mar, fell Apr>Jun, rose Jul>Aug, fell Sep, rose Oct, fell Nov, rose Dec, fell Jan, rose Feb. Feb $ were +3.7% vs 25, below the 4.3% avg. They are again all positive but just 36% of 19>26 growth is real. Growth: 2.0%; Avg 19>26: +5.2%, Real: +2.1%

Gas Stations – Gas Stations were hit hard by “stay at home”. They started recovery 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 Sep they were +2.7% but began deflating to -4.2% in Feb 24. In Mar>May $ grew, fell Jun, rose July, fell Aug/Sep, rose Oct, fell Nov>Feb 25, rose Mar>May, fell Jun, rose Jul, fell Aug>Oct, up Nov, fell Dec>Jan, rose Feb. Feb $ vs 25: -0.7% (4.3% avg). Only down vs 25. Real $ vs 19 are again positive. Growth: -1.3%; Avg 19>26:+3.5%, Real: +0.3%. They show the cumulative impact of inflation can be positive & negative.

Relevant Retail – Less Auto, Gas and Restaurants– They account for ≈60% of Total Retail $ in a variety of channels. Their only down month until Feb 25 was Apr 20, and they led the way in Retail’s recovery. Sales got on a roller coaster in 22, but all months set new records with Dec reaching a new all-time high, $481B, and an annual record of $4.81T. In 23, the roller coaster continued. A Dec lift set a new monthly record of $494.7B & an annual record of $4.997T. $ales got back on the roller coaster in 24. The ride continued as $ rose Oct>Jan 25, fell Feb, rose Mar>May, fell Jun, rose Jul, fell Aug>Sep, rose Oct>Dec, fell Jan>Feb 26. The Feb 3.8% YOY lift is 18.5% below their 92>25 avg of +4.6%, but they are all positive again and 53.1% of their 53.5% 19>26 growth is real, again #1 in Big Group performance. Growth: 3.9%; Avg 19>26: +6.3%, Real: +3.6%. In 2024 their inflation rate fell from 3.2% to 0.1%. It rose in 25 to 1.8% in Sep then slowed to 1.5% in Oct>Nov, rose to 2.0% in Dec>Jan & 2.2% in Feb. YOY Inflation is low, but its cumulative impact can slow growth.

YOY inflation is low, but cumulative & impending lifts can affect sales. In Feb, 2 actual YOY $ comparison were negative, the same as Dec/Jan. In Oct>Nov, there was 1 real drop. That fell to 0 in Dec>Feb. In Oct, all were up vs last year with below avg lifts. In Nov only Auto was down but the lifts were all below avg. In Dec, all were up and Relevant Retl’s lift was above avg. In Jan, 3 lifts, all below avg. In Feb, 4 lifts, all below avg. In Oct/Nov, 3 big groups were all positive. In Dec, there were 4, which has continued through Feb. Relevant Retail has now been all positive in 21 of 23 months. As expected, Feb Total Retail sales fell vs Jan, but the -3.1% drop was 4.3 times more than the -0.7% avg. Recovery is still slow.

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

  • Relevant Retail: Ytd Growth: +3.9%; Avg 19>26: +6.3%; Real: 3.6%. % Real Growth: 53.1%. 9 of 11 were down from Jan. Vs Feb 25: 8 were up, 6 Real. Vs Feb 21: 11 were up; 7 Real. Vs 19: Dept Stores were down & real Furniture Stores.
  • All Department Stores – This group was struggling before the pandemic hit them hard. They began recovery in March 21. Sales are +18.1% from Jan but all YOY measurements but actual vs 21 are negative. Their -6.0% Feb YOY drop is 36% more than their -4.4% avg. Ytd Growth: -7.8%; Avg 19>26: -5.6%; Real: -7.2%. % Real growth: None
  • Club/SuprCtr/$- They fueled a big part of the recovery because they focus on value which has broad consumer appeal. $ales are -6.7% from Jan, but they are up in all comparisons but real vs Feb 25. Their 1.4% YOY Feb lift is -83% below their 92>25 avg of +8.2%. Ytd Growth: 2.6%; Avg 19>26: +5.1%; Real: 2.4%. % Real Growth: 43.9%
  • Grocery- They depend on frequent purchases, so their changes are usually less radical. $ales are -10.5% from Jan. They are actually down vs Feb 25 but really down for all but vs 2019. Cumulative inflation has hit them hard. Their -0.2% YOY Feb drop is a big change from a +3.0% avg. Ytd Growth: 0.8%; Avg 19>26: +4.4%; Real: 0.4%. % Real Growth: 7.4%
  • Health/Drug Stores – Many stores are essential, but consumers visit less frequently than Grocery stores. $ are -3.7% from Jan, but they are positive in all YOY comparisons. Inflation has been relatively low, so it is surprising that their +2.5% YOY lift vs Feb 25 is 49.4% below avg. Ytd Growth: 1.8 %; Avg 19>26: +4.3%; Real: 2.8%. % Real Growth: 62.9 %
  • Clothing and Accessories – Clothes mattered less if you stayed home. That changed in March 2021 with strong growth through 2022. Sales are +7.8% from Jan and positive in all YOY measurements. $ales are +7.0% vs Feb 25, 2.2 times more than their 3.2% avg. Ytd Growth: 6.2%; Avg 19>26: +3.6%; Real: 2.6%. % Real Growth: 68.4%.
  • Home Furnishings – In mid-2020 consumers’ focus turned to their homes and furniture became a priority. Inflation is up to 4.5% in Feb. $ are -1.5% from Jan and are only actually up vs 2019 & vs Feb 21. YOY vs Feb 25, they are -5.6%, far below their 3.1% avg lift. Ytd Growth: -4.8%; Avg 19>26:+2.2%; Real: -0.2%. % Real Growth: None.
  • Electronic & Appliances – They have had many issues. Sales fell in Apr>May of 2020 and didn’t reach 2019 levels until March 21. $ are -5.5% from Jan but they are up in all comparisons. Strong deflation made real sales very high. Sales are +4.9% vs Feb 25, 2.4 times above the 2.1% avg. Ytd Growth: 4.6%; Avg 19>26: 0.7%; Real: 3.9%. % Real Growth: 100+%
  • 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 turned up again in Apr>Sep 25, dropped Oct/Nov, rose Dec/Jan to 5.6%, fell to 4.8% in Feb. Sales are -3.0% from Jan but are actually up and really down for all YOYs but 2019. Sales vs Feb 25 were +3.7%, 4.4% below their 3.9% Avg. Ytd Growth: 3.1%; Avg 19>26: 4.0%; Real: 0.4%. % Real Growth: 8.5%
  • 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 roller coaster since June 24 and $ are -3.3% from Jan. All other comparisons are positive. YOY Sales vs Feb 25 are +11.5%, 4 times more than their 2.8% avg. Ytd Growth: +9.2%; Avg 19>26: +4.6%; Real: 3.8%. % Real Growth: 80.6%.
  • 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 -2.0% vs Jan, but positive in all comparisons. They are 2nd in the % increase vs 19 & vs 21. Plus, their 11.3% YOY Jan lift is 2.7 times more than their 92>25 avg of +4.1%. Ytd Growth: +11.6%; Avg 19>26: +7.9%; Real: 6.1%. % Real Growth: 73.3%.
  • 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 -5.8% from Jan and their YOY lift of 7.5% is -22.8% below the 9.7% avg. However, they are positive in all comparisons. Ytd Growth: 7.3%; Avg 19>26: +12.7%; Real: 10.8%. % Real Growth: 80.4%.

Recap – Driven by Relevant Retail, the Pandemic recovery was widespread by Y/E 21. In 22 we were hit with the strongest inflation in 40 years. Inflation has slowed considerably from its Jun 22 peak, but only 1 smaller channel is deflating. Deflation helps, but cumulative inflation can still have a negative impact – slowed YOY growth and even sales drops. As expected, $ fell from Jan for 9 of 11 channels. 7 of the 9 drops were above avg – Not Good! The biggest concern is still YOY drops and smaller lifts. Relevant Retail’s 3.8% lift vs Feb 25 was 18.5% below avg. 8 channels had a YOY lift vs last year, 1 less than Jan. 4 of the 8 lifts were above avg, 1 more than Jan, the same as Dec but far less than 7 in Oct. There are multiple factors slowing growth, but the major one is high prices from cumulative inflation. December is still the biggest retail month of year, and February is usually the worst. Total & Relevant Retail had the most sales in history for both months. The Feb Yoy lift was -35% below avg for Total and -18.5% below for Relevant. The situation is a little better than January as 7 of 11 channels (8 in Jan) had a below avg lift or a drop vs Feb 25. We’ll see what happens.

Here are the Jan/Feb 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 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 includes the CPI changes vs 21 to show cumulative inflation. Note: Jan Monthly = Ytd

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

Here are some answers to some obvious questions. Note: Product Prices rose but changes by Channel were mixed.

  1. Why is the group for Nonstore 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 Nonstore 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. 5 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.

 

2024 Pet Food Spending was $40.04B – Where did it come from…?

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As we continue to drill ever deeper into the demographic Pet spending data from the US BLS, we have now reached the level of individual Industry segments. We will start with Pet Food, now the 2nd largest, but arguably the most influential. We have noted the trendy nature of Pet Food Spending. In 2018 we broke a 20 year pattern – 2 years up then spending goes flat or turns down. We expected a small increase in 2018 but got a $2.27B decrease. This was due to the reaction to the FDA warning on grain free dog food. The warning lost credibility and spending rebounded in 2019, +$2.35B. In 2020 the market was hit by a bigger outside influence – the pandemic. In Pet Food, it created a wave of panic buying and a $5.65B lift. The panic buying was over, so spending fell -$2.44B in 2021. In 2022 spending returned to more “normal” behavior with a strong $4.29B, +12.5% increase to $38.69B. In 2023, spending skyrocketed with a record $6.81B lift and reached $45.5B. In 2024, spending fell -$5.46B, -12.0% to $40.04B, now 2nd to Veterinary. Let’s take a closer look.

First, we’ll see which groups were most responsible for the bulk of Pet Food spending and the -$5.46B decrease. The first chart details the biggest pet food spenders for each of 10 demographic categories. It shows their share of CU’s, share of pet Food spending and their spending performance (Share of spending/share of CU’s). To reach the 60% goal, 4 are different from Total Pet – Education, Occupation, Area and CU Size. The categories are presented in the order that reflects their share of Total Pet Spending. The big difference is that $70K> income has the smallest share of Food $. This difference is magnified in performance. Being Married is the most important factor in Food spending. In Total Pet and other segments, Income is the most important. Food spending is also more balanced than Total Pet Spending. This is evident by the fact that the Performance of only 5 groups exceeds 120%. In Total Pet there were 7. In 2024, Pet Food accounted for 62.6% of Pet Products $ and 33.7% of Total Pet $, down significantly from 66.4% and 38.7% in 2023. Pet Food is no longer the largest segment (Veterinary) but it is still very important & impactful to the Pet Industry.

  1. Housing – Homeowners (81.3%) – up from 77.6%. Homeownership is a huge factor in pet ownership and pet spending. In 2024, homeowners gained share and their performance rose from 119.2% to 125.3%. They rejoined the 120% club and are tied for 4th in importance. Only w/o Mtge spent more, +$1.3B. W/Mtge were -$4.1B. The increase in share and performance was driven by a -$2.7B, -26.5% drop by Renters.
  2. Race/Ethnic – White, not Hispanic (83.4%) – up from 79.9%. This large group accounts for the vast majority of spending in every segment. They gained share and their performance increased to 125.3% from 120.4%, but this category stayed #3 in terms of importance in Pet Food Spending. Hispanics, African Americans and Asians account for 33.9% of U.S. CU’s & they spend 16.6% of Food $, down from 20.1% in 2023. Only Asians spent more, +$0.55B. Whites were -$2.94B, -8.1%. Minorities were -$2.53B, -27.6%. This % disparity drove the share/performance lifts.
  3. Area – Suburban + Rural (72.7%) down from 73.8%. Their performance fell from 112.7% to 112.0% and their importance dropped to #9, from #8. All segments spent less. The Suburbs had the biggest $ drop, -$2.73B and Center City had the smallest, -$1.01B. Overall, the drop was rather balanced.
  4. Income – Over $70K (66.2%) – up from 61.0%. Their performance rose from 120.9% to 126.4% but they stayed 2nd in importance. High income is still very important in Pet Food Spending but is not at the top of the list. The 50/50 $ divide rose from $93K in 2023 to $98K in 2024 but it is still 6% below the average CU income. Only $40>49K, +$0.56B and 70>99K, +$0.53B spent more. The biggest drop was by <$40K groups, -$4.68B. The $100K> were all down, but the drop was only -$1.8B. The share and performance for $70K> strongly increased because they were only down  -$1.27B, -4.6%, while <$70K was -$4.19B, -23.6%.
  5. # in CU – 2/3 people (60.0%) – up from 54.7%. Their performance also rose from 114.7% to 125.3% and their rank is now tied for 4th. Only 2 people CUs spent more, +$0.43B, +2.6%. In 2024, 2 & 3 People CUs spent -$0.88B, 3.5% less. In 2023 they spent $3.5B more – a big change. Singles led the way down with a -$3.09B, -29.9% decrease in Food spending. Together, 1,4 & 5+ were -$4.58B, -22.2%. This caused the big lifts in share & performance.
  6. Occupation – Wage & Salaried + Self-employed (65.3%) – down from 66.9% – The group’s performance is even lower from 98.7% to 96.0%. Occupation is again last in importance. Only Mgrs/Prof, +$0.91B & All Other, Unemployed, +$0.14 spent more. The widespread spending decreases caused the drops in share & perform ance.
  7. Education – Assoc. Degree> (67.0%) – up from 64.7%. Performance rose from 110.9% to 113.6% but higher education fell from 6th to 8th in importance. Only Associates & HS grads w/some college spent more. Assoc.> were -$2.61B, -8.9%. <Assoc. were -3.09B, -19.2%. This caused the lifts in share and performance.
  8. CU Composition – Married Couples (64.0%) – up from 59.4%. They gained share and their performance rose from 123.3% to 133.3%. They stayed #1 in importance. Only Married, Couple Only & Child 18> CUs spent more. Married CUs were -$1.41B, -5.2%. All others were -$4.05B, -21.9%. This caused the Married Group’s big lifts.
  9. # Earners – 2+ CU, 1 or 2 Earners (59.7%) – up from 57.4% Their performance also rose from 114.3% to 119.2% and they moved from 9th to 6th in importance. Only No Earner, 2+ CUs spent more, +$0.60B. The 1 or 2 Earners, 2+ CUs spent -$2.17B, -8.3% less. All other CUs were -$3.29B, -17.0%. This drove the lift in share & performance.
  10. Age – 35>64 (60.0%) – up from 53.5%. Their performance rose from 102.5% to 115.8% & age moved up from #8 to #7 in importance. All but 45>64 spent less, the reverse of 2023. Age Share: 25>34: 13.9%; 35>44: 17.6%;45>54: 20.6%; 55>64: 21.8%; 65>74: 16.4%. 35>64 have the 3 highest incomes but there’s still some Balance!

The 4 top performers for Pet Food are the same as Total Pet. In 2023 there was a record lift that was widespread and more balanced. This is best illustrated by the fact that in 2023 the performance for only 3 groups exceeds 120% with the highest at 123.3%. In 2024, there was a huge drop and 120+% rose to 5, with the highest at 133.3%. To put the current balance situation into better perspective, we should note that in 2020 there were 8 at 120+%, 5 over 130%.

Now, we’ll look at 2024’s best and worst performing Pet Food spending segments in each category.

Almost all of the best and worst performers are the ones that we would expect. 2024 produced just 1 surprise winner – Married, + Adults in a repeat. There are 7 different winners from 2023 and 8 different losers. This total is 4 more than 2023, which had 6 new winners and 5 new losers. More new losers reflects the widespread nature of 2024’s huge decrease in Pet Food spending. Changes from 2023 are “boxed”. We should also note the performance gap between winner and loser widened in 9 of 12 categories. Overall, the average gap rose from 59.1% in 2023 to 77.4% in 2024. This is strong evidence of decreased spending balance. Here are some more performance specifics:

  • Income – The winner & loser are new but expected. The gap stayed at 86% and is again below 100%.
  • # Earners – Winner & loser are new. The loser has a very low income. The gap widened from 39% to 84%.
  • Occupation – Blue Collar replaced Service Workers on bottom. The gap widened from 38% to 61%.
  • Age, Generation – Gen X is now on top in both and Gen Z on the bottom. Both gaps widened. Age:+42%; Gen:+28%
  • Race – The usual winner. African Americans replaced Asians on the bottom. The gap widened from 83% to 107%.
  • Education – Both are new but, like income, very expected. The gap increased from 35% to 76%.
  • Housing – Owning a home is always important. The usual winner & loser returned. The gap widened – 74% to 79%.
  • Area – The usual winner/loser – Rural on top & Center City on the bottom. The gap narrowed a little 82% to 79%.
  • Region – Both are new and this category also had a small decrease in the performance gap – 30% to 29%.
  • CU Comp, CU Size – Comp: No change. Size: 2 replaced 3. Both gaps widened. Comp: +24%; Size: +15%

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

There are no repeats from 2023 and 17 flipped from 1st to last or vice versa. Last year there were 4 repeats and 4 flips -much more turmoil in 2024. The Surprise winners were w/o Mtge, $40>49K, Asians, Associates, A/O and Center City. The surprising losers were Boomers, w/Mtge, Whites, BA/BS and Suburbs. Spending fell -12.0% as 82.3% of demographic segments spent less. (In 23, 87.5% spent more) Plus, there was no category where all segments had increases. (5 in 23) However, in 2024 in Area, all segments spent less. Here are the specifics:

  • Generation – Gen X flipped to the top, replacing Millennials. Boomers are the new loser.
    • Winner – Gen X – Pet Food Spending: $12.91B; Up $1.48B (+13.0%)                                   2023: Millennials
    • Loser – Baby Boomers – Pet Food Spending: $13.24B; Down $3.31B (-20.0%)                 2023: Gen X
    • Comment – Much of the 2020>21 Pet Food spending boom and bust was due to the Boomers. Gen X took over the top spot in 21 & 22. In 2023, they had the only spending decrease. Millennials edged out Boomers for the win. In 2024, Gen X had the only Food lift. BTW – Millennials were -$2.0B.
  • Housing – The winner and loser flipped.
    • Winner – Homeowners w/o Mtge – Food: $12.96B; Up $1.30B (+11.2%)                        2023: Homeowners w/Mtge
    • Loser – Homeowners w/Mtge – Food: $19.60B; Down $4.06B (-17.2%)                          2023: Homeowners w/o Mtge
    • Comment – Only Homeowners w/o Mtge spent more. Renters spent -$2.70B, -26.5% less. Like 2023, all changes were double digit %. However, all were positive in 2023. In 2024, that number fell to just 1.
  • Age – The Winner and loser both flipped but the result was not surprising.
    • Winner – 45>54 yrs – Pet Food Spending: $8.23B; Up $0.78B (+10.4%)                                2023: 65>74 yrs
    • Loser – 65>74 yrs – Pet Food Spending: $6.58B; Down $2.42B (-26.9%)                               2023: 45>54 yrs
    • Comment: Only 45>64 spent more while <45 and 65> spent less. The lift was driven by Gen Xers while Millennials & Boomers drove the drop. This spending pattern is the exact opposite of 2023.
  • CU Composition – The 2023 winner flipped to the bottom. The 2024 winner is new, but not surprising.
    • Winner – Married, Couple Only – Food: $12.66B; Up $0.65B (+5.4%)                                  2023: Singles
    • Loser – Singles – Food: $7.51B; Down $3.09B (-29.2%)                                                            2023: Single Parents
    • Comment – Only Married, Couple Only and those with a Child 18>, +$0.02B, spent more. All other CUs spent $4.7B less. Married, w/children were -$1.89B, but Singles had by far the biggest drop after their huge, +$2.96B, +38.8% increase in 2023.
  • # Earners – No Earner, Singles flipped to the bottom. No Earner, 2+ CUs replaced them on top.
    • Winner –– No Earner, 2+ CUs – Pet Food Spending: $4.88B; Up $0.60B (+14.1%)                 2023: No Earner, Single
    • Loser – No Earner, Single – Pet Food Spending: $2.55B; Down $2.12B (-45.5%)                   2023: 3+ Earners
    • Comment – No Earner, 2+ CUs had the only spending increase. No Earner CUs were at the top & bottom. All CUs with any workers spent less on Pet Food.
  • Income – Both the winner & loser flipped, and the winner is again a surprise.
    • Winner – $40>49K – Pet Food Spending: $2.66B; Up $0.56B (+26.5%)                                    2023: <$30K
    • Loser – <$30K – Pet Food Spending: $3.92B; Down $2.71B (-40.9%)                                        2023: $40 to $49K
    • Comment – Only the $40>49K & $70>99K groups spent more, +$1.09B. <$40K spent -$4.68B less, which was more than double the -$1.80 decrease by $100K>. All groups over $70K still have 100+% performance.
  • Race/Ethnic – Both the winner and loser from 2023 flipped.
    • Winner – Asians – Pet Food Spending: $1.49B; Up $0.55B (+58.4%)                                         2023: White, Not Hispanic
    • Loser – White, Not Hispanic – Pet Food Spending: $33.40B; Down -$2.94B (-8.1%)             2023: Asian
    • Comment – The U.S. is becoming more racially/ethnically diverse, especially with Hispanics & African Americans but White, Not Hispanics are by far the biggest spender in every Pet Segment. Only Asians spent more, but the Minorities were still -$3.53B, -38.5%.
  • Education – Both winner and loser flipped and are surprising.
    • Winner – Associate’s Degree – Food Spending: $4.55B; Up $0.54B (+13.4%)                       2023: BA/BS Degree
    • Loser – BA/BS Degree – Food Spending: $12.03B; Down $2.40B (-16.6%)                             2023: Associate’s Degree
    • Comment – Only Associate’s degrees and High School Grads with Some College spent more. The other <College groups were -$2.98B, -33.9%. Advanced Deg. were only -$0.75B, -6.8%, so College Grads were -$3.15B, -12.4%.
  • # in CU – 1 Person flipped to the bottom and was replaced on top by 2 People.
    • Winner – 2 People – Pet Food Spending: $16.89B; Up $0.43B (+2.6%)                                 2023: 1 Person
    • Loser– 1 Person– Pet Food Spending: $7.51B; Down $3.09B (-29.2%)                                 2023: 4 People
    • Comment: Only 2 People CUs spent more. Singles were the big loser, but 3 & 4 People CUs both spent -$1.3B less. In fact, 2+ CUs were -$2.37B, -6.8%. Only 2, 3 & 5+ People CUs perform above 100%.
  • Occupation – Both winner & loser are new. The Winner, All Other, Not listed includes Unemployed was surprising.
    • Winner – All Other, Not Listed – Pet Food Spending: $4.79B; Up $0.34B (+7.7%)                2023: Retired
    • Loser – Tech/Sls/Clerical – Pet Food Spending: $5.45B; Down $1.49B (-25.8%)                    2023: Mgrs/Professionals
    • Comment – Only A/O, Unemployed spent more. Self-employed were -$0.64B, -17.5%; Retirees were -$1.48B, -14.0% and All Wage & Salary Workers were -$3.68B, -13.7%.
  • Region – The South flipped from last to 1st and the Northeast replaced them on the bottom.
    • Winner – South – Pet Food Spending: $14.96B; Up $0.15B (+1.0%)                                            2023: West
    • Loser – Northeast – Pet Food Spending: $6.22B; Down $2.38B (-27.7%)                                   2023: South
    • Comment – Only the South spent more. The drop by the Midwest, -$2.37, was virtually equal to the Northeast.
  • Area Type – The Winner and Loser both flipped.
    • Winner – Center City – Pet Food Spending: $10.90B; Down $1.01B (-8.4%)                            2023: Suburbs;
    • Loser – Suburbs 2500> – Center City: $17.23B; Down $2.73B (-13.7%)                                    2023: Ctr City/Rural – Tie          
    • Comment – In an unusual situation, all segments spent less. In 2023 Center City tied for the bottom, despite a $1.86B lift. In 2024, they won with a -$1.01B drop. Rural was -$1.73B, -12.7%.

We’ve now seen the “winners” and “losers” in terms of increase/decrease in Pet Food Spending $ for 12 Demographic Categories. In 2020, very specific segments binge bought Pet Food. In 2021, their pets “ate up” the overstock so Pet Food spending fell. 2022>23 brought a new challenge, strong inflation. However, most of America remains firmly committed to high quality Pet Food. Super premium Food already had high prices, so income is still very important in Pet Food spending. The 2023 result was 87.5% of all demographic segments spent more which drove a record lift of $6.81B, +17.6% to $45.5B. 2024 was a different story. 82.3% of demographics spent less. The result was $40.04B in spending, -$5.46B, -12.0%. We have identified the winning segments in performance and $ increase but they were not alone. Not every good performer can be a winner. Some “hidden” segments should also be recognized for their performance. They don’t win an award, but they get…

HONORABLE MENTION

Because the drop was so widespread, the possible members of this group was very limited. With 5 different categories, the group was diverse. The lifts were small, under 10% with 4 under 4%. No young groups were included. The Gen X/Boomer 55>64 yr olds spent $0.23B more. The biggest % lift came from the urban  1>2.5M people group. They are the only <100% performer, which is unusual. The smaller urban area with 100>249K people also spent $0.10B more, not unexpected in Food. A college degree mattered less as HS Grads w/some college spent more. Marriage & children matter as those with a child 18> had a miniscule, +$0.02B lift. Income matters in Pet Food spending, but the below avg $70>99K group had the biggest increase, +$0.53B. However, we should note that 3 segments had above avg income and 3 were below  avg. The group is definitely diverse.

Summary

Pet Food has been ruled by trends over the years. The drop in 2018 due to the FDA grain free warning broke a 20 year pattern of 2 years up followed by 1 year of flat or declining sales. This trendy nature increased with the move to premium foods in 2004. The 2007 Melamine crisis resulted in a series of “waves” which became a tsunami with the introduction of Super Premium Foods. The 25 to 34 yr old Millennials were the first to “get on board” with Super Premium in the 2nd  half of 2014. In 2015, many more groups began to upgrade. The result was a $5.4B spending lift. These consumers were generally more educated with higher incomes. Unfortunately, they often paid for the upgrade by spending less in other segments. In 2016, spending dropped as many value shopped, especially online. They spent some of the $3B “saved” Food $ in other segments but not enough so Total Pet Spending was down -$0.46B. In 2017, due to a price competitive market, we got a deeper penetration of Super Premium. These upgraders were mostly middle-income and not college educated. The result was a $4.6B increase but this time there was no trading of segment $.

In 2018 we were “due” a small annual increase in Pet Food, but spending fell $2.26B in reaction to the FDA warning on grain free dog food. The big decrease came directly from the groups who had fueled the 2017 increase. In fact, 71% of the demographic groups with the biggest change in Pet Food $ switched from first to last or vice versa from 2017.

That brought us to 2019. The FDA warning was false, so Pet Parents returned to Super Premium or even pricier options. Supplement $ also grew as the health of their Pet Children remained the #1 priority. Pet Food $ grew $2.35B with 75% of demographic segments spending more. Income and related categories mattered more, and Pet Food Spending became less demographically balanced. In 2020 the Pandemic accelerated this trend. Fear of shortages led to binge buying and a $5.65B increase. This behavior was driven by very specific groups. This spending disparity was manifested in the fact that the performance of 8 of 10 big spending groups exceeded 120% while 49% of all segments spent less.

In 2021, the retail market strongly recovered but the turmoil in Pet Food continued. The 2020 binge buying didn’t increase usage, so Pet Food spending fell by $2.44B. Every segment with the biggest increase in 2020 had the biggest decrease in 2021. The resulting drop in $ hid the fact that 65% of all demographic segments spent more on Pet Food.

In 2022 the situation returned to a more normal, balanced pattern in spending. Pet Parents renewed their commitment to high quality food for their children. Despite strong inflation, 82% of demographic segments increased spending generating a $4.29B (+12.5%) lift and reaching a new record high of $38.69B – even exceeding the 2020 binge by $1.85B.

In 2023 inflation grew to +10.6%, but spending was +$6.81B, a record. The lift was widespread. In 5 categories, all spent more and overall,  87.5% of demographics increased spending. 2023 was also more balanced as only 3 big groups performed over 120% and the best/worst discrepancy fell from 73.5% to 59.1%. 2023 was a great year for Pet Food.

In 2024, inflation plummeted to 0.2%, but so did Pet Food spending, -$5.46B, -12.0% to $40.04B. They are now the 2nd largest segment, behind Veterinary. The drop was widespread as 82.3% of demographics spent less and in the Area category, all segments were down. Spending  was also less balanced, as 5 big groups performed over 120%, up from 3 and the best/worst performance discrepancy rose from 59.1% to 77.4%. 2024 was a bad year for Pet Food.

Finally – The Ultimate Pet Food Spending CU is 3 people – a married couple and 1 other adult. They are 45>54 yr-old Gen Xers, White, but not Hispanic. At least one has an Advanced Degree and both work in their own business. This generates an income of $200K>. They are still paying the mortgage on their house in a rural area <2500 in the West.