Archive for category: Pet Market

The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. There was a -0.1% drop in prices from last month, but the CPI rose to +2.7% from +2.6% in October (due to a bigger drop in 23). Grocery prices fell -0.1% from October, but inflation grew from 1.1% to 1.6%, again due to a big drop in 23. However, after 12 months of double digit % YOY monthly increases, grocery inflation has now been below 10% for 21 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 December 2021 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 2022. National inflation has slowed considerably since June 2022, but Petflation generally increased until June 2023. It passed the National CPI in July 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, fell below Sep>Oct, but is again above it. 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 24 vs 23 which will include Pet Segments and relevant Human spending categories. Plus
  1. CPI change from the previous month.
  2. Inflation changes for recent years (22>23, 21>22, 20>21, 19>20, 18>19)
  3. Total Inflation for the current month in 2024 vs 2019 and vs 2021 to see the full inflation surge.
  4. Average annual Year Over Year inflation rate from 2019 to 2024
• YTD comparisons
  1. YTD numbers for the monthly comparisons #2>4 above

In our first graph we will track the monthly change in prices for the 24 months from Nov 22 to Nov 24. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in segment patterns and compare them to the overall U.S. CPI. The year-end numbers and those from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In Nov., Pet prices were up 0.5% from Oct. All segments were up but Supplies & Services had the biggest lifts. Both were +1.3%.

In November 22, the CPI was +15.9% and Pet was +16.0%. Prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices consistently grew but the others had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices grew while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month for all segments except for 1 Supplies dip. In May, Products prices grew while Services slowed. In Jun/Jul this reversed. In Aug all but Services fell. In Sep/Oct this flipped. In Nov, all but Food & Vet fell. In Dec, Supplies & Vet  drove prices up. In Jan>Mar 24 Pet prices grew despite a few drops. In April, prices in all but Vet fell. In May, all but Food grew. In June, Products drove a lift. In July, all but Services fell. In Aug, Food drove a drop in prices. In Sep, Products fueled a drop. In Oct, Services drove a lift. In Nov, all were up.

• U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices turned up Jan>Sep 23, dipped Oct>Dec, rose Jan>Oct 24, then fell in Nov, but 29.9% of the 22.8% increase in the 59 months since Dec 2019 happened from Jan>Jun 2022 – 10.2% of the time.
• Pet Food – Prices were at Dec 19 level from Apr 20>Sep 21. They grew & peaked May 23. Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose Mar, fell Apr>May, grew June, fell Jul>Oct, then rose in Nov. 99% of the lift was in 22/23.
• Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices & essentially stayed there until 22. They turned up in Jan 22 and hit a record high, beating 2009. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct to a new record. Prices stabilized in Nov>Dec but grew in Jan>Feb 23. They fell in Mar, but set a new record in May. The rollercoaster continued with Dec>Feb ↑, Mar/Apr ↓, May/Jun ↑, July ↓, Aug ↑, Sep/Oct ↓ & Nov ↑.
• Pet Services– Inflation is usually 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but with fewer outlets. Inflation grew in 21 with the biggest lift in Jan>Apr. Inflation was strong in 22 but prices got on a rollercoaster in Mar>Jun. They turned up Jul to Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug: ↑, Sep>Dec: ↓, Jan>Mar 24: ↑, Apr: ↓, May: ↑, June: ↓, Jul>Nov: ↑.
• 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 24, grew Feb>May, fell Jun>Jul, then grew Aug>Nov.
• Total Pet – Petflation is a sum of the segments. In Dec 21 the price surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in Dec, grew Jan>May 23 (peak), fell Jun>Aug, grew in Sep/Oct, then fell in Nov. In December prices turned up and grew through March 24 to a record high. Prices fell in April, rose May>June (record), fell Jul>Sep, then rose in Oct>Nov (record). Petflation is now above the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for November and compare it to last month, last year and to previous years. We will also show total inflation from 21>24 & 19>24. Petflation rose to 2.9%, from 2.0% in October, and it is again above the National rate (by +7.4%). In October, it was -13.1%. The chart will allow you to compare the inflation rates of 23>24 to 22>23 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. We’ve included some human categories to put the pet numbers into perspective.

Overall, prices were down -0.1% from October but were +2.7% vs Nov 23, up from +2.6% last month. Grocery inflation rose to +1.6% from 1.1%. Only 2 segments had price decreases from last month – Food at Home and the CPI. There were 2 drops in Oct, but 3 in Aug & Sep and 5 in July. The national YOY monthly CPI rate of 2.7% is up from 2.6%, but it is still 13% below the 22>23 rate and 62% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services, Pet Services & Haircuts. 21>22 has the highest rate for all but Medical & Pet Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 has only occurred in Total Pet and all Pet segments. Except for Pet Services, where prices are skyrocketing, Service Segments have in the past generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 95% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were still recovering from a deflationary period. Services expenditures now account for 64.6% of the National CPI so they are very influential. Their current CPI is +4.5% while the CPI for Commodities is -0.2%. This clearly shows that Services are driving all of the current 2.7% inflation. There is a similar situation in Pet. Petflation is 2.9%. The CPI for the 2 Service Segments is 7.1%. The Pet Products CPI is 0.01%.

• U.S. CPI– Prices are -0.1% from October. The YOY increase is 2.7%, up from 2.6%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 30+% higher than the target. The November increase was the 2^nd straight lift after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +13.5%, 59.5% of the total inflation since 2019. Inflation was growing in November 2021, +6.8%
• Pet Food– Prices are +0.1% vs October, but -1.2% vs Nov. 23, down from -1.3%. They are still significantly below the Food at Home inflation rate of +1.6%. The YOY drop of -1.2% is being measured against a time when prices were 23.1% above the 2019 level but the current decrease is still more than the -0.9% drop from 2019 to 2020. The 2021>2024 inflation surge generated 97% of the 21.4% inflation since 2019. Inflation began in 2021.
• Food at Home – Prices are down -0.1% from October but the monthly YOY increase grew from 1.1% to 1.6%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.4% Inflation for this category since 2019 is 20.7% more than the national CPI but only tied for 3rd place behind 2 Services expenditures. 56.9% of the inflation since 2019 occurred from 2021>24. This is lower than the CPI, but we should note that Grocery prices began inflating in 2020>21 then the rate accelerated. It appears that the pandemic supply chain issues in Food which contributed to higher prices started early and foreshadowed problems in other categories and the overall CPI tsunami.
• Pets & Supplies– Prices were +1.3% from October and inflation grew to +2.8% vs Nov 23 from 1.0%, but they still have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 95% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to another record high in Feb 23. Prices fell in March, rose Apr/May (record), fell Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb 24, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell Sep>Oct, then rose in Nov.
• Veterinary Services– Prices are +0.8% from October and +7.0% from 2023, down from 7.3%. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +39.1% and since 2021, +29.4%. For Veterinary, relatively high annual inflation is the norm. However, the rate has increased during the current surge, especially in 22 & 23. It is still high in 24, so 75.2% of the cumulative inflation since 2019 occurred from 2021>24.
• Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 20>21. Prices rose +0.2% from October but inflation vs last year slowed to +3.7% from +3.8%. Medical Services are not a big part of the current surge as only 56.2% of the 13.0%, 2019>24 increase happened from 21>24.
• Pet Services – Inflation slowed in 2020 but began to grow in 21. In 24, prices surged Jan>Mar, fell in April, rose in May, fell in June, then rose Jul>Nov to a new peak of 12.1%. This is almost double the 6.3% rate in August. 68.8% of their total 19>24 inflation has occurred since 21. In Dec 23, it was only 49%. Plus, they again have the highest 23>24 rate.
• Haircuts/Other Personal Services – Prices are +0.6% from October and +4.8% from Nov 23. 9 of the last 11 months have been 4.0+%. Inflation has been pretty consistent. 59.9% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation rose to 2.9% from 2.0% due to price lifts in all segments. It is still 33% less than the 22>23 rate but 7.4% more than the U.S. CPI. However, 2.9% is 7.6% below the 3.1% average November rate since 1997. Vs Oct, prices rose 0.5%, driven by all but Food (+0.1%). The Oct>Nov increase was much bigger than the 0.1% average since 1997, but a lift was to be expected. It has occurred in 19 of the last 25 years. Another factor in the big CPI lift was that prices fell -0.3% in Oct>Nov 2023. In November the recovery essentially stalled so there is still a ways to go to reach a full recovery.

Now, let’s look at the YTD numbers.

The 23>24 rate is lower than 22>23 for all but Medical Services & Pet Services (their highest rate). The 22>23 inflation rate was the highest for only 2 of 9 categories – Both Pet – Pet Food & Veterinary. 21>22 has the highest rate for the CPI, Food at Home, Pet Supplies & Total Pet. The average national inflation in the 5 years since 2019 is 4.2%. Only 2 of the categories are below that rate – Medical Services (2.7%) and Pet Supplies (2.1%). It is no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.3% or higher.

• U.S. CPI – The 23>24 rate is 3.0%, the same as October, but it is down 29% from 22>23, 63% less than 21>22 and 29% below the average YOY increase from 2019>2024. However, it’s still 20% more than the average annual increase from 2018>2021. 70% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
• Pet Food – Ytd inflation is 0.3%, down from 0.5% in Oct. and 97.3% less than the 22>23 rate. Now, it is also 96.9% lower than 21>22 and 75% below the average rate from 2018>2021. Pet Food has the highest 22>23 rate on the chart and remains in 2^nd place in the 21>24 rates. Deflation in the 1^st half of 2021 kept YTD prices low then they surged in 2022 and especially in 2023. 96% of the inflation since 2019 occurred from 2021>24.
• Food at Home – The inflation rate has slowed remarkably. At 1.1%, it is down 80% from 22>23, 90% from 21>22 and 66% from 20>21. Also, it is even 50% lower than the average rate from 2018>20. It is only tied for 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 18%. You can see the impact of supply chain issues on the Grocery category as 70% of the inflation since 2019 occurred from 2021>24.
• Pets & Pet Supplies – In 24, prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, rose in Aug, fell Sep>Oct, then rose in Nov. Inflation in 24 is 0.9% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The only significant lifts since 2019 were 7.6% in 22 & 2.9% in 23. The 2021 deflation created a unusual situation. Prices are up 11.2% from 2019 but 104% of this lift happened from 21>24. Prices are up 11.7% from their 2021 “bottom”.
• Veterinary Services – Inflation was high in 2019 and steadily grew until it took off in late 2022. The rate may have peaked in 2023, but it is still going strong in 2024, +7.5%, the highest on the chart. They are also #1 in inflation since 2019 and since 2021. At +6.7%, they have the highest average annual inflation rate since 2019. It is 1.6 times higher than the National Average but 2.5 times higher than the Inflation average for Medical Services. Strong Inflation is the norm in Veterinary Services.
• Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. Ytd it is 2.8%. In a non-pandemic year, “normal” is between 2.1>2.9%. We are still seeing the impact of 2023 when prices actually deflated (-0.3%). This was the only deflationary year since the US BLS began tracking this category in 1935.
• Pet Services – After falling in late 2023, prices surged in 2024, except for drops in Apr & Jun. The 23>24 inflation rate of 6.6% is 2^nd to Veterinary on the chart. It is now their highest Ytd rate and is 2 times higher than their 2018>21 average rate. Pet Services is 2^nd in 19>24 inflation but only 4^th in inflation since 21.
• Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. Ytd inflation is 4.5%, which is 15% below its 22 peak, but 30% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the purchase frequency.
• Total Pet – Ytd Petflation is 2.6%, the same as October, but down from 2.7% Jul>Sep. It is 69% less than 22>23 but 12% higher than the 2018>21 average rate. Plus, Ytd it is still 13% below the CPI. Despite the YOY lifts in Aug & Nov, Petflation has slowed in 24. This is primarily driven by drops in Pet Food prices, but Ytd Supplies inflation is also low. Services & Vet prices reached new record highs in November. The mix of patterns has produced some stability in the Jul>Nov Ytd Pet CPIs.

The Petflation recovery paused in August, came back Sep>Oct, then paused again in November. At 2.9%, November was 7.6% below the 25 year average for the month but is again above the National CPI. We tend to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 20.2% above 2021 and 25.0% higher than 2019. Those are big lifts. In fact, in November prices for Vet, Services & Total Pet set new records while prices for the Product segments are less than 1.4% below the highest in history. Only Supplies prices (+11.3%) are less than 21% higher than 2019. Since price/value is the biggest driver in consumer spending, inflation will affect the Pet Industry. Services will be the least impacted as it is driven by high income CUs. Veterinary will see a reduction in visit frequency. The product segments will see a more complex reaction. Supplies will likely see a reduction in purchase frequency and some Pet Parents may even downgrade their Pet Food. Products will see a strong movement to online purchasing and private label. We saw proof of this at both GPE & SZ as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

In 2023 Americans spent $117.60B on our companion animals, 1.13% of $10.40T in total expenditures. Pet Spending was up $14.89B (+14.5%), much more than the $2.73B in 2022. In 2020 Consumers focused on the necessary segments – Food and Veterinary, including a Food buying binge. The discretionary segments, Supplies and Services, suffered until 2021 when Food $ fell but all other segments had record increases. In 2022, Supplies & Vet $ fell while Food & Services grew. In 2023, $ increased in all segments including a record lift in Food. This produced the huge 14.5% increase in Total Pet $.

In this report we will compare Pet Spending in 2023 vs 2022 for the most popular demographic measurement – by Generation. We will also include historical data going back to 2019 when Gen Z first had enough CUs to be recognized as a separate segment. All data comes from the US BLS Consumer Expenditure Survey.

We’ll start by defining the generations and looking at their share of U.S. Consumer Units (CUs are basically households)

GENERATIONS DEFINED

Gen Z: Born after 1996

In 2023, Age 26 or less

Millennials: Born 1981 to 1996

In 2023, Age 27 to 42

Gen X: Born 1965 to 1980

In 2023, Age 43 to 58

Baby Boomers: Born 1946 to 1964

In 2023 Age 59 to 77

Silent/Greatest: Born before 1946

In 2023, Age 78+

• Baby Boomers still have the largest number of CU’s at 41.4M and 30.7% of the total. They had a 2.1M decrease in 2023 and generally have been losing ground. In fact, they have 3.8M fewer CU’s than in 2016.
• The Oldest Generations will continue to lose CUs primarily due to death or movement to permanent care facilities.
• Gen X has the second most CUs and gained a little ground in 2023.
• Millennials have the largest number of individuals, but they still rank only third in the number of CU’s.
• Gen Z gained 1.6M CUs as more of these youngsters established independent households.

Now let’s look at some key CU Characteristics (Note: Nationally, 1 change; CU Size up to 2.5 from 2.4 in 2022.)

CU size: ↑ for Millennials, ↓ for Gen X & Gen Z; # Children: Millennials ↑, Gen X ↓; # Earners: Gen Z ↑, Boomers ↓; Homeownership: ↑ for Gen X & Millennials, ↓ for Born <1946; No Mtge: ↑ for all but Gen Z (No Chge).

• CU Size – Nationally, CU size increased to 2.5 from 2.4. 2+ people CUs account for 69.8% of all U.S. CUs, (up from 69.0% in 2022) and 79.7% of pet $ (down from 80.8%) There were 1.5% more 2+ CUs and they spent 11.5% more on their pets (Natl. Avg: +14.1%). Millennials and now Gen Z are actively building their households. CU size, with all the related responsibilities, now peaks with the Millennials as Gen Xers fell from 3.0 to 2.9. CU size drops as we age but the numbers for the oldest groups are the same as 2022. However, Gen Z fell from 2.1 to 2.0.
• # Children < 18 – 27.0% of U.S. CU’s have children, the same as 2022 and they generate 30.2% of Pet Spending, down from 32.8%. There was a lift in CUs with an oldest child <6 & Single Parents. The others were down. The decrease in Total Pet Spending share was also very focused. Married couples with an oldest child 18> spent -$0.60B less. Single Parents were -$1.0B. All other CUs, with or without children, spent more. The net result was CUs with children spent $1.85B more while those without children increased spending by $13.04B. Overall there was no change in the # of children per CU. Millennials are still the leader and the only generation to average more than 1 child per CU. In 2023 they increased to 1.2 from 1.1. Gen X (#2) fell from 0.8 to 0.7. All others were unchanged.
• # Earners – Pet spending is often tied to the number of earners in a CU. In 2023, all segments in the # of Earners category spent more. 2+ earner CUs still spent the most and had the biggest increase, +$5.18B. The only changes in count were that Gen Z rose to 1.5 from 1.4 while Baby Boomers fell to 0.9 from 1.0.
• Homeownership – Owning and controlling your own space has always been a major factor in increased Pet Ownership and spending. In 2023 homeownership was unchanged at 65.1%. Millennials & Gen X had increases and Born <1946 had the only drop. The homeowners’ share of Total Pet Spending fell from 81.2% to 79.6%. The decrease happened because Homeowners’ Pet Spending increased $10.21B (12.2%), while Renters’ rose $4.67B (24.2%). We should also note that while the percentage of homeowners w/no Mtge is basically unchanged, it actually grew by 0.33%. All generations but Gen Z had slight increases.
  • As expected, Gen Z are the most common renters in society. Homeownership by Millennials has moved up to 53% but it is still only 82% of the national average.
  • Gen Xers have been above the national avg since 2018, and Homeownership generally increases with age.

Next, we’ll compare the Generations to the National Avg.:

In Income, Total CU Spending, Total Pet Spending and the Pet Share of Total CU Spending

CU National Avg: Income – $101,805; Total CU Spending – $77,278; Total Pet Spending – $874.16; Pet Share – 1.13%

• Income – The Gen Xers are still at the top, but their lead fell slightly. Compared to the national average, the incomes of Boomers and the Silent/Greatest fell. Millennials’ income beat the national average in 2020 and continues to grow. The income of Gen Z passed that of the oldest Americans in 2021 and as expected, continues to grow.
• Total Spending – The Gen Xers make the most and spend the most but it’s not out of line with their income. The Millennials’ increase was 50% above the national lift so it is now 5.6% above the national average. Boomers’ spending is 90.8% of the national average, down from 90.9%. Due to a big drop in spending compared to income, the oldest group is in a better position. However, they are still deficit spending vs their after tax income. With an 11.9% increase in Income and an 9.1% increase in spending, the retail importance of Millennials continues to grow.
• Pet Spending – Millennials had a 24.0% lift so now there are 3 groups exceeding the national average. Gen X stayed on top, but their lead has narrowed. Gen Z is now up to 75.3% while the oldest group fell to 50.1% from 55.6%.
• Pet Spending Share of Total Spending – The national number grew from 1.05% to 1.13%. The increase was driven by lifts from all groups but Born <1946. In 2020 Boomers were the only group to spend more than 1% of their total expenditures on their pets. In 2021 only Gen Z spent less than 1% of their total expenditures on their pets. In 2022, only Boomers and Gen X were above 1%. In 2023, all but the oldest group are above 1%. Boomers again lead with an incredible 1.33%. However, the strong commitment to their pets by Gen Z is very evident with a 1.25% score.

Now, let’s look at Total Pet Spending by Generation in terms of market share as well as the actual annual $ spent for 2019 through 2023. The 2023 numbers are boxed in red (decrease) or green (increase) to note the change from 2022.

• After 2 years at #2, Boomers regained the top spot in Pet Spending from Gen X and their $ exceed their 2020 binge.
• There are a variety of spending patterns. Spending in the oldest group is low and except for a surge in 2021 has been slowly falling. Millennials are the only group with consistent annual growth. Gen X also grew every year until 2020. They came back strong and moved to the top in 2021>22. They fell to #2 in 2023. The Boomers have been on a rollercoaster because they react strongly to trends and outside influences. In 2020 they drove the panic buying of Food. In 2021 their spending fell due to a big drop in Food $. In 2022 it increased but was still below 2020. In 2023 lifts in all but Supplies pushed them back to #1. Their pattern is the exact opposite of the oldest generation. Gen Z is just getting started but growing. They’re the smallest group but their 2023 spending is 3.6 times more than 2021.
• In 2023, again only the Silent/Greatest generations spent less. Millennials & Boomers had the biggest lifts.
  • Silent/Greatest: -$0.34B. Boomers: +5.26B. Gen X: +0.94B. Millennials: +$6.56B. Gen Z: +$2.46B.
• Boomers – Ave CU spent $930.33 (+$139.07, 17.6%); 2023 Total Pet spending = $39.25B, Up $5.26B (+15.5%)
  • 2019>23: Up $10.52B; Spending turned strongly up and they’re back to #1 in $. Plus, they’re finally above 2020.
• Gen X – Ave CU spent $969.74 (+$12.30, 1.3%); 2023 Total Pet Spending = $35.37B, Up $0.94B (+2.7%)
  • 2019>23: Up $9.62B Their annual Pet spending growth since 2015 had been strong and consistent until a drop in 2020. In 2021>22 they were #1 in CU Pet spending and Total $. In 2023 they fell to #2 in Total $ but are #1 in CU.
• Millennials – Ave CU spent $898.78 (+$173.79, 24.0%); 2023 Total Pet Spending = $32.18B, Up $6.56B (+25.6%)
  • 2019>23: Up $15.75B; As the income and overall spending of Millennials grows, their pet spending has also grown every year. This younger group has by far the biggest increase in $ since 2019 of any group, $15.75B, +96%
• Gen Z – Ave CU spent $658.29 (+$198.03, 43.0%); 2023 Total Pet Spending= $5.95B, Up $2.46 (+70.7%)
  • 2019>23: Up $4.88B; They’re starting to build H/Hs but are now committed Pet Parents. Pet $ are +260% vs 2021
• Silent/Greatest – Ave CU spent $437.80 (+$11.95, 2.8%); 2023 Total Pet Spending = $4.86B, Down $0.34B (-6.5%)
  • 2019>23: Down $1.60B; CU Spending was up, but their # of CUs continues to fall, -7.1% vs 2022 & -32.9% from 2019.

Baby Boomers took the top spot in Total Pet Spending from Gen X and the spectacular growth continued for Gen Z. Only the oldest group spent less. However, with 8.0% inflation, Gen X also really bought less Pet Products & Services in 2023.

Let’s look at the individual segments. First, Pet Food…

• Gen X had the only decrease. The Boomer lift exceeded the one from 21>22, but Millennials had the biggest increase and the younger groups have had more consistent growth. Gen Z has quadrupled their spending since 2021.
• Since 2014, Millennials’ have led the way in food trends, and they are the only group with an annual increase every year since 2016.
• Boomers – Ave CU spent $381.53 (+$65.97, 20.9%); 2023 Pet Food spending = $16.55B, Up $3.23B (+24.3%)
  • 2019>2023: Up $3.99B They are again #1 in Total Food $ but they are still below their 2020 COVID panic buy.
• Millennials – Ave CU spent $357.97 (+$114.43, 47.0%); 2023 Pet Food Spending = $12.67B, Up $3.87B (+44.1%)
  • 2019>2022: Up $6.88B They are the only group with increased spending every year since 2016. Their income is growing as is a commitment to their pets. They often pioneer food upgrades, and they moved up to #2 in 23.
• Gen X – Ave CU spent $320.80 (-$46.41, -12.6%); 2023 Pet Food spending = $11.43B, Down $1.65B (-12.6%)
  • 2019>2022: Up $3.05B They reacted to the FDA warning by further upgrading their food. No pandemic panic buying. In 2021>22 they were the leader in CU Pet Food Spending. In 2023, they fell to 3^rd. Value shopping!
• Gen Z – Ave CU spent $264.59 (+$58.56, 28.4%); 2023 Pet Food spending = $2.43B, Up $0.82B (+50.4%)
  • 2019>2023: Up $2.09B; Pets are more important to these youngsters. Pet Food spending is +386% from 2021.
• Silent/Greatest – Ave CU spent $221.88 (+$67.76, 44.0%); 2023 Pet Food spending = $2.41B, Up $0.53B (+28.3%)
  • 2019>2023: Down $0.07B; CU count is falling, and prices are high, but they are committed to their pets.

Pet Food Spending is driven by trends and outside influences like FDA warnings and COVID. 2023 brought a record increase. Even with 10.6% inflation, all but Gen X spent more $ and bought more food.  Now, Supplies Spending.

• The oldest groups spent less and Supplies spending again skewed towards the younger groups. Gen X had the biggest lift and stayed #1. Millennials passed Boomers and are now #2. Gen Z now spends 2.4 times more than the oldest group. In 2022, they spent -$0.02B less.
• Gen X – Ave CU spent $10 (+$14.46, 7.4%); 2023 Pet Supplies spending = $7.71B, Up $0.67B (+9.5%)
  • 2019>2023: Up $2.24B; Gen Xers are again the leader in Supplies spending. They were affected by tarifflation in 2019 but held their ground in 2020. In 2021 spending exploded, fell in 2022, then grew in 2023 – not unexpected.
• Millennials – Ave CU spent $184.53 (+$2.76, 1.5%); 2023 Pet Supplies spending = $6.66B, Up $0.31B (+4.8%)
  • 2019>2023: Up $2.74B; Millennials earn their share of Supplies $. They were the least impacted by the tariffs in 2019 and spent more in 2020. Their spending then took off in 2021 and has had slow growth in 2022>23.
• Baby Boomers – Ave CU spent $157.13 (+$0.82, 0.5%); 2023 Pet Supplies spending = $6.50B, Down $0.30B (-4.3%)
  • 2019>2023: Up $0.60B In 2020 they focused on Food! In 2021, a big lift. +$0.07B in 2022 and -$0.30B in 2023.
• Gen Z – Ave CU spent $171.13 (+$52.08, 43.7%); 2023 Pet Supplies spending = $1.53B, Up $0.65B (+74.9%)
  • 2019>2023: Up $1.11B; With a big increase in Food, their huge lift in Supplies is not surprising, Pets need both.
• Silent/Greatest – Ave CU spent $55.26 (-$17.38, -23.9%); 2023 Pet Supplies spending = $0.63B, Down $0.26B (-29.3%)
  • 2019>2023: Down $0.47B; They’re losing CUs & were hit hard by COVID & inflation. Small lifts in 21>22. A drop in 23.

In 2019, tarifflation drove spending down in all groups. In 2020 Millennials and Gen X spent a little more while the older groups spent a lot less. In 2021 spending took off in all groups. In 2022, only Gen X spent less. In 2023, the older groups spent less, but the younger groups spent more – enough to generate a $1.08B increase.

Next, we’ll turn our attention to the Service Segments. First, Non-Veterinary Pet Services

• All but the oldest spent more. Gen X had the biggest increase and became #1 in Services $.
• Gen X – Ave CU spent $129.49 (+$19.23, 17.4%); 2023 Pet Services spending = $4.78B, Up $0.79B (+19.8%)
  • 2019>2023: Up $1.74B; A big drop in 2020. The 2^nd biggest lifts in 21>22 but fell to #2. In 23 they are again #1.
• Baby Boomers – Ave CU spent $103.01 (+$7.45, 7.8%); 2023 Pet Services spending = $4.26B, Up $0.11B (+2.6%)
  • 2019>2023: Up $1.48B; The biggest $ drop in 2020 and the biggest lifts in 2021>22. Small lift in 23, now #2 in $.
• Millennials – Ave CU spent $100.55 (+$5.05, 5.3%); 2023 Pet Services spending = $3.63B, Up $0.29B (+8.7%)
  • 2019>2023: Up $1.83B; In 2020 they had the smallest decrease of any group and with the 2021>23 lifts, their spending is now double the amount in 2019.
• Silent/Greatest – Ave CU spent $38.96 (-$11.29, -22.5%); 2023 Pet Services spending = $0.61B, Down $0.17B (-28.0%)
  • 2019>2023: Down $0.51B; They have the need but not the $. Their 2023 spending was 54% less than 2019.
• Gen Z – Ave CU spent $35.23 (-$2.12, -5.7%); 2023 Pet Services spending = $0.31B, Up $0.04B (+14.8%)
  • 2019>2022: Up $0.25B; They still have the smallest share of the $ but their spending is 5 times more than 2019.

This segment had slow annual growth until 2017 which saw a small drop in spending due to an extremely competitive environment. In 2018, the increased number of outlets really hit home, and spending exploded. 2019 brought another small decrease as Gen Xers & Millennials looked for and found a better deal. 2020 brought pandemic restrictions and closures. 2021 saw a record lift which they exceeded in 2022. In 2023, growth slowed, and Gen X is again #1 in $.

Now, Veterinary Services

• The oldest group had the only decrease. Gen X stayed on top in CU spending, but Boomers are now #1 in total $.
• Except for the 2022 drop by Millennials, the younger groups have had a growing commitment to this Pet Parenting responsibility. The combined Vet $ of Millennials, Gen Z & Gen Xers is up 80% from 2019 but 139% from 2017.
• Boomers – Ave CU spent $288.66 (+64.83, 29.0%); 2023 Veterinary spending= $11.94B, Up $2.21B (+22.7%)
  • 2019>2023: Up $4.46B; In 2020, Boomers focused on Food & Veterinary. In 2021 they had a big drop in Food but a big lift in Vet $. They were the leader in Vet $ until the drop in 22 pushed them to #2. They are again #1 in 23.
• Gen X – Ave CU spent $310.35 (+$25.02, 8.8%); 2023 Veterinary spending= $11.45B, Up $1.13B (+10.9%)
  • 2019>2023: Up $4.24B; They have been at the top of CU Vet spending since 2018. They are the only group with an annual increase in Vet $ every year since 2019. In 2022 they became #1 in Total $. In 2023 they fell to #2.
• Millennials – Ave CU spent $255.73 (+$51.55, 25.2%); 2023 Veterinary Spending $9.22B, Up $2.09B (+29.3%)
  • 2019>2023: Up $4.30B; They had the biggest lift in 21, the biggest drop in 22 and another big lift in 23.
• Gen Z – Ave CU spent $187.34 (+$89.50, 91.5%); 2023 Veterinary spending = $1.67B, Up $0.95B (+133.0%)
  • 2019>2023: Up $0.47B; Their growing commitment to Pets includes Vet Services as spending more than doubled.
• Silent/Greatest – Ave CU spent $121.70 (-$27.14, -18.2%); 2023 Veterinary spending $1.38B, Down $0.44B (-24.0%)
  • 2019>2023: Down $0.55B; Their pets’ health is still a priority, but high prices & a drop in CUs drove their $ down.

Veterinary spending continues to be important to the 3 younger groups but is also a priority for Boomers as they moved back to the top in $. Even with 9.4% inflation, all but the oldest group bought more Veterinary Services.

One last chart to compare the share of spending to the share of total CU’s to see who is “earning their share”.

• Gen X Performance – Total: 109.7%; Food: 91.6%; Supplies: 122.2%; Services: 129.8%; Veterinary: 117.1%
  • Gen Xers stayed at the top in performance. They earned their share in Total Pet and all segments but Food. Except for the 2020 dip they increased their Total Pet Spending every year since 2016. In 2021 they had a big increase in every segment. In 2022 they had some spending dips but an overall increase as they stayed on top in Total Pet $. In 2023, they had lifts in all, but Food and they are the performance leader in all NonFood segments. Expect their commitment and pet spending to continue to grow.
• Baby Boomers Performance – Total: 108.6%; Food: 118.3%; Supplies: 91.8 %; Services: 103.3%; Veterinary: 108.9%
  • Boomers led the way in building the industry and are again the “top dogs” in $. They earn their share in all but Supplies and are still the spending leader in Total Pet, Food & Veterinary. They are also the most emotional Pet Parents, so their spending is subject to radical swings like 2020’s panic, binge buying of Pet Food. They should still be a major force in the Pet Industry for many more years, but the Gen Xers are performing well, and the Millennials are also preparing to eventually take their turn at the top.
• Millennials Performance – Total: 102.1%; Food: 103.9%; Supplies: 107.9%; Services: 100.8%; Veterinary: 96.5%
  • Millennials are now the only group to have increased their pet spending every year since 2016. Their spending is more evenly balanced, and their performance is 100+% in all but Veterinary. Their future as the Pet Parenting spending leaders is still aways off. Their income, home ownership and pet spending are all increasing. They are educated and well connected. Indications are that they may lead the way in adopting new trends, especially in food. Their progress is good news, but in reality, their leadership may be a decade away.
• Gen Z Performance – Total: 76.3%; Food: 80.7%; Supplies: 100.0%; Services: 35.3%; Veterinary: 70.7%
  • Their getting started numbers are low in all but Supplies. 2 strong years have pushed them far above the oldsters.
• Silent/Greatest Performance – Total: 49.1%; Food: 63.0%; Supplies: 32.3%; Services: 39.1%; Veterinary: 45.9%
  • Pet Parenting is more challenging in old age. Their performance continues to fall, from 55.6% in 22 to 49.1%.

Baby Boomers are still the heart of the industry and again the $ leaders, but Gen X leads in CU $. Gen X will continue to grow as they are pursued by Millennials. Both are ready, willing and able to take their turn at the top. Pet Spending has become more balanced across the generations. This bodes well for the continued strong growth of the industry

The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. With a 0.1% increase in prices from last month, the CPI rose in October to +2.6% from +2.4% in September. Grocery prices rose 0.1% from September but inflation slowed to 1.1%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 20 consecutive months below 10%. As we have learned, even minor price changes can affect consumer pet spending, especially in the discretionary pet segments, so we will continue to publish monthly reports to track petflation as it evolves in the market.

Petflation was +4.1% in December 2021 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 2022. National inflation has slowed considerably since June 2022, but Petflation generally increased until June 2023. It passed the National CPI in July 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, but Sep>Oct are again below it. We will look deeper into the data. The reports will include:

• A rolling 24 month tracking of the CPI for all pet segments and the national CPI. The base number will be pre-pandemic December 2019 in this and future reports, which will facilitate comparisons.
• Monthly comparisons of 24 vs 23 which will include Pet Segments and relevant Human spending categories. Plus
  1. CPI change from the previous month.
  2. Inflation changes for recent years (22>23, 21>22, 20>21, 19>20, 18>19)
  3. Total Inflation for the current month in 2024 vs 2019 and vs 2021 to see the full inflation surge.
  4. Average annual Year Over Year inflation rate from 2019 to 2024
• YTD comparisons
  1. YTD numbers for the monthly comparisons #2>4 above

In our first graph we will track the monthly change in prices for the 24 months from Oct. 22 to Oct. 24. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in segment patterns and compare them to the overall U.S. CPI. The year-end numbers and those from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In Oct., Pet prices were up 0.2% from Sep. The price lift was driven by Pet & Vet Services. The Product segments were both down.

In October 22, the CPI was +16.0% and Pet was +15.4%. Prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices consistently grew but the others had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices grew while Vet & Supplies prices stabilized. In Jan>Apr 23, prices grew every month for all segments except for 1 dip by Supplies. In May Products prices grew while Services slowed. In Jun/Jul this reversed. In Aug all but Services fell. In Sep/Oct this flipped. In Nov, all but Food & Vet fell. In Dec, Supp. & Vet  drove prices up. In Jan>Mar 24 Pet prices grew despite a few drops. In April, prices in all but Vet fell. In May, all but Food grew. In June, Products drove a lift. In July, all but Services fell. In August, Food drove a drop in prices. In Sep, Products fueled a drop. In Oct, Services drove a lift.

• U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices turned up Jan>Sep 23, dipped in Oct>Dec, then rose Jan>Oct 24, but 31.6% of the 22.8% increase in the 58 months since Dec 2019 happened from Jan>Jun 2022 – 10.3% of the time.
• Pet Food – Prices were at Dec 19 levels from Apr 20>Sep 21. They grew & peaked in May 23. In Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose in Mar, fell Apr>May, grew in June, fell in Jul>Oct. 99% of the lift was in 22/23.
• Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices & essentially stayed there until 22. They turned up in Jan and hit a record high, beating 2009. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct to a new record. Prices stabilized in Nov>Dec but grew in Jan>Feb 23. They fell in Mar, but set a new record in May. The rollercoaster continued with Dec>Feb lifts, Mar/Apr drops, May/Jun lifts, July drop, Aug lift & Sep/Oct drops.
• Pet Services– Inflation is usually 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but with fewer outlets. Inflation grew in 21 with the biggest lift in Jan>Apr. Inflation was strong in 22 but prices got on a rollercoaster in Mar>Jun. They turned up Jul to Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug: ↑, Sep>Dec: ↓, Jan>Mar 24: ↑, Apr: ↓, May: ↑, June: ↓, Jul>Oct: ↑.
• Veterinary – Inflation has been consistent. Prices turned up in Mar 20 and grew through 21. A surge began in Dec 21 which put them above the overall CPI. In May 22 prices fell and stabilized in June causing them to fall below the CPI. However, prices rose again and despite some dips they have stayed above the CPI since July 22. In 23>24 prices grew Jan>May, leveled Jun/Jul, fell Aug, grew Sep>Dec, fell Jan, grew Feb>May, fell Jun>Jul, grew Aug>Oct.
• Total Pet – Petflation is a sum of the segments. In Dec 21 the price surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in Dec, grew Jan>May 23 (peak), fell Jun>Aug, grew in Sep/Oct, then fell in Nov. In December prices turned up and grew through March 24 to a record high. Prices fell in April, rose May>June (a record), fell Jul>Sep, rose in Oct, but Petflation is still below the U.S. CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for October and compare it to last month, last year and to previous years. We will also show total inflation from 21>24 & 19>24. Petflation fell to 2.0%, from 2.1% in September, and it is again below the National rate (-13.1%). In August, it was +12.0%. The chart will allow you to compare the inflation rates of 23>24 to 22>23 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. We’ve included some human categories to put the pet numbers into perspective.

Overall, prices were up 0.1% from September and were +2.6% vs Oct 23, up from +2.4% last month. Grocery inflation slowed to +1.1% from 1.3%. Only 2 had price decreases from last month – Pet Food and Pet Supplies. There were 3 drops in Aug & Sep, but 5 in July. The national YOY monthly CPI rate of 2.6% is up from 2.4%, but it is 19% below the 22>23 rate and 66% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services and Pet Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 has now only occurred in Total Pet and all Pet segments. Except for Pet Services, where prices are skyrocketing, Service Segments have in the past generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 95% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were still recovering from a deflationary period. Services expenditures now account for 64.6% of the National CPI so they are very influential. Their current CPI is +4.7% while the CPI for Commodities is -1.0%. This clearly shows that Services are driving all of the current 2.6% inflation. There is a similar situation in Pet. Petflation: 2.0%. The CPI for the 2 Service Segments is 6.1%. The Pet Products CPI is -0.7%.

• U.S. CPI– Prices are +0.1% from Sep. The YOY increase is 2.6%, up from 2.4%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 30+% higher than the target. The October increase was a big change after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +14.1%, 62.1% of the total inflation since 2019. Inflation was growing in October 2021, +6.2%
• Pet Food– Prices are -0.3% vs Sep. and -1.3% vs Oct. 23, down from -0.9%. They are still significantly below the Food at Home inflation rate, +1.1%. The YOY drop of -1.3% is being measured against a time when prices were 23.1% above the 2019 level and the current decrease is actually less than the -1.7% drop from 2019 to 2020. The 2021>2024 inflation surge generated 98% of the 21.3% inflation since 2019. Inflation began in 2021.
• Food at Home – Prices are up 0.1% from September but the monthly YOY increase slowed from 1.3% to 1.1%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.2% Inflation for this category since 2019 is 19.8% more than the national CPI but tied for 3rd place behind 2 Services expenditures. 59.2% of the inflation since 2019 occurred from 2021>24. This is lower than the CPI, but we should note that Grocery prices began inflating in 2020>21 then the rate accelerated. It appears that the pandemic supply chain issues in Food which contributed to higher prices started early and foreshadowed problems in other categories and the overall CPI tsunami.
• Pets & Supplies– Prices were -0.4% from Sep and inflation fell to +1.0% vs Oct 23 from 1.5%, and they have the lowest rate vs 2019. Prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 92% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a new record high in Feb 23. Prices fell in March, rose in Apr/May to a new record, fell in Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell in Sep>Oct.
• Veterinary Services– Prices are +1.0% from Sep and +7.3% from 2023. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +38.5% and since 2021, +28.8%. For Veterinary, relatively high annual inflation is the norm. However, the rate has increased during the current surge, especially in 22 & 23. It is still high in 24, so 74.8% of the cumulative inflation since 2019 occurred from 2021>24.
• Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 20>21. Prices rose +0.4% from Sep and inflation vs last year rose to +3.8% from +3.6%. Medical Services are not a big part of the current surge as only 55.3% of the 13.2%, 2019>24 increase happened from 21>24.
• Pet Services – Inflation slowed in 2020 but began to grow in 21. In 24 prices surged Jan>Mar, fell in April, rose in May, fell in June, then rose Jul>Oct. to a new peak of 8.3%. This is up from Sep: 7.3% & Aug: 6.3%. 67.3% of their total 19>24 inflation has occurred since 21. In Dec 23, it was 49%. Plus, they again have the highest 23>24 rate.
• Haircuts/Other Personal Services – Prices are +0.2% from Sep and +4.5% from Oct 23. 8 of the last 10 months have been 4.0+%. Inflation has been pretty consistent. Just 58.8% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation fell to 2.0% from 2.1% due to price drops in Products. It is still 62% less than the 22>23 rate and 13.1% less than the U.S. CPI. 2.0% is 35.5% below the 3.1% average rate since 1997. Vs Sep, prices rose 2%, driven by Vet & Services. The biggest Aug>Sep price increase was +0.7% in 2022 but a lift was to be expected. It has occurred in 15 of the last 20 years. A big factor in the small CPI drop was that the Sep>Oct price lift in 23 was a little bigger than 24. 2024 appears to be moving back towards a more normal pattern, but there is still a ways to go.

Now, let’s look at the YTD numbers.

The inflation rate for 22>23 was the highest for 4 of 9 categories – All Pet – Pet Food, Services, Veterinary & Total Pet. The 23>24 rate is usually much lower than 22>23 for all but Medical Services. 21>22 still has the highest rate for Food at Home, the CPI & Pet Supplies. The average annual national inflation in the 5 years since 2019 is 4.2%. Only 2 of the categories are below that rate – Medical Services (2.7%) and Pet Supplies (2.1%). It comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.3% or higher.

• U.S. CPI – The 23>24 rate is 3.0%, the same as September, but it is down 30% from 22>23, 64% less than 21>22 and 29% below the average YOY increase from 2019>2024. However, it’s still 27% more than the average annual increase from 2018>2021. 72% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
• Pet Food – Ytd inflation is 0.5%, down from 0.7% in Sep. and 96% less than the 22>23 rate. Now, it is also 95% lower than 21>22 and 43% below the average rate from 2018>2021. Pet Food has the highest 22>23 rate on the chart and remains in 2^nd place in the 21>24 rates. Deflation in the 1^st half of 2021 kept YTD prices low then they surged in 2022 and especially in 2023. 96% of the inflation since 2019 occurred from 2021>24.
• Food at Home – The inflation rate has slowed remarkably. At 1.1%, it is down 81% from 22>23, 90% from 21>22 and 62% from 20>21. Also, it is even 49% lower than the average rate from 2018>20. It is only tied for 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 17%. You can see the impact of supply chain issues on the Grocery category as 71% of the inflation since 2019 occurred from 2021>24.
• Pets & Pet Supplies – In 24, prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, rose in Aug, fell Sep>Oct. Inflation in 24 is 0.7% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The only significant increases were 7.5% in 22 & 3.3% in 23. The 2021 deflation created a unusual situation. Prices are up 11.2% from 2019 but 105% of this increase happened from 2021>24. Prices are up 11.8% from their 2021 “bottom”.
• Veterinary Services – Inflation was high in 2019 and steadily grew until it took off in late 2022. The rate may have peaked in 2023, but it is still going strong in 2024, +7.6%, the highest on the chart. They are also #1 in inflation since 2019 and since 2021. At +6.7%, they have the highest average annual inflation rate since 2019. It is 1.6 times higher than the National Average but 2.5 times higher than the Inflation average for Medical Services. Strong Inflation is the norm in Veterinary Services.
• Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. Ytd it is 2.7%. In a non-pandemic year, “normal” is between 2.1>2.9%. We are still seeing the impact of 2023 when prices actually deflated (-0.3%). This was the only deflationary year since the US BLS began tracking this category in 1935.
• Pet Services – After falling in late 2023, prices surged in 2024, except for drops in Apr & Jun. The 23>24 inflation rate of 6.1% is 2^nd to Veterinary on the chart. It is 8% less than 22>23 but now equal to 21>22. Also, it is 1.9 times higher than the 2018>21 average rate. Pet Services is 2^nd in 19>24 inflation but only 4^th in inflation since 21.
• Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. The industry responded by raising prices. Ytd inflation is 4.5%, which is 13% below its 21 peak, but 30% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
• Total Pet – Ytd Petflation is 2.6%, down from 2.7% Jul>Sep. It is 70% less than 22>23 but 13% higher than the 2018>21 average rate. Plus, YTD it is still 13% below the CPI. Despite the YOY lift in August, Petflation has slowed in 24. This is primarily being driven by drops in Pet Food prices, but Ytd Supplies inflation is also low. Services & Vet prices reached new record highs in October. The mix of patterns has produced stability in the Aug>Oct Ytd Pet CPIs.

The Petflation recovery paused in Aug. then came back in Sep>Oct. At 2.0%, October was 35.5% below the average rate for the month and is again lower than the National CPI. We continue to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 19.8% above 2021 and 24.5% higher than 2019. Those are big lifts. In fact, in October prices for Vet & Services set new records while prices for Total Pet & all other segments are less than 1.4% below the highest in history. Only Supplies prices (+10.0%) are less than 23% higher than 2019. Since price/value is the biggest driver in consumer spending, inflation will affect the Pet Industry. Services will be the least impacted as it is driven by high income CUs. Veterinary will see a reduction in visit frequency. The product segments will see a more complex reaction. Supplies will likely see a reduction in purchase frequency and some Pet Parents may even downgrade their Pet Food. Products will see a strong movement to online purchasing and private label. We saw evidence of this at both GPE 24 & SZ 24 as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.

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

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

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

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

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

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

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

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

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

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

Now, here is Veterinary Spending by Age Group

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

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

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

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

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

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

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

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

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

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

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

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