Archive for category: Pet Market

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

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

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

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

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

2022>2023 CHANGE in SHARE of TOTAL PET SPENDING

Food: 38.7%, Up from 37.7%

Veterinary: 30.3%, Up from 28.6%

Pets & Supplies: 19.6%, Down from 21.4%

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This chart shows the number of new winners/losers.

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

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

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

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

First, the Income related categories.

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

Now the Age and Racial/Ethnic Categories

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

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

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

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

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

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

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

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

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

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

And Finally, What you have all been waiting for…

THE ULTIMATE 2023 PET SPENDING CUs – Side by Side

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

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

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

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

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

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

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

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

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

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

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

There is one consistent winner in the Pet Industry…

…OUR PET CHILDREN

 

 

Now we will turn to Veterinary Services. For years, Veterinary Services have had high inflation. This has resulted in CU income becoming the dominant factor in spending and a reduction in visit frequency.

In 2017 low inflation drove a 7.2% increase in visit frequency and a $2.5B spending lift. In 2018 inflation returned to normal. Consumers spent $0.56B more (+2.7%), but inflation was 2.6% so almost all of the lift was from higher prices. In 2019 the situation got worse. Consumers spent $0.58B (+2.7%) more but inflation was 4.1% so there was a decrease in the amount Vet Services purchased. In 2020 the pandemic hit, and Pet Parents focused on needs – Food & Veterinary. Veterinary spending grew $3.05B, (+14.0%). In 2021, this behavior grew even stronger and produced a record $7.82B (+31.5%) increase. In 2022 inflation reached 8.8%. Spending fell -$2.95B (-9.0%) but the amount of Vet Services sold fell 16.4%. In 2023 inflation was 9.4% but Vet Care is needed so spending grew $5.95B (+20.0%) – with inflation, +9.7%.

We’ll start our analysis with the groups who were responsible for the bulk of Veterinary spending in 2023 and the $5.95B increase. The first chart details the biggest Veterinary spenders for each of 10 demographic categories. It shows their share of CU’s, share of Veterinary spending and their spending performance (Share of spending/share of CU’s). In terms of performance – 5 groups perform above 120%, the same as 2022, but 1 less than 2018>2021. This is 1 less than Supplies, 2 less than Services (7) but 2 more than Food (3). This means that these big spenders are performing well but it also signals that there is still disparity between the best and worst performing demographics in this “needed” segment. Only the Age & Income groups are different from Total Pet and the categories are listed in the order that reflects their share of Total Pet $pending. Again, High Income is the most important factor in Spending.

1. Race/Ethnic – White, not Hispanic (84.7%) down from 86.0%. This group accounts for the vast majority of spending in every segment but lost share in Vet $ in 2023. Their 127.6% performance is also down from 128.0% but they grew from #5 to #4 in importance in Veterinary Spending. Only African Americans spent less, -$0.04B (-3.8%). Whites spent $4.64B (+18.2%) more but their share & performance fell because of a $1.24B (58.7%) lift by Hispanics.
2. # in CU – 2+ people (82.0%) up from 79.8% This group, which is 69.8% of U.S. CUs, gained in share and their performance grew from 115.7% to 117.5%. Their rank in importance in Vet Spending moved from #8 to #7. All but 4 People spent more. The gains happened because Singles had a much smaller lift (+7.0%) than 2+ CUs (+23.3%).
3. Housing – Homeowners (81.2%) down from 83.9% Homeownership is a major factor in pet ownership and spending in all industry segments. In terms of importance to Veterinary spending, their 124.8% performance rating is down from 128.9%, and they dropped to 5th from 4th place. All segments increased spending. Renters were +39.7% while Homeowners were +16.2%. This produced the drops in share & performance for Homeowners. We should also note that Homeownership is definitely not as important to Veterinary Spending as it once was. In 2015 their share was 88.4% with performance of 141.8%.
4. Age – 35>64 (60.8%) down from 61.1% Their performance also fell from 117.1% to 116.7% and they fell to 8th from 6th place in importance. All ages spent more but 45>54 was only +0.2% while <25 was +190.1%. These were big factors in the group’s small drops in share and performance.
5. Area – Suburban & Rural (69.3%) down from 70.9% Suburban CU’s are the biggest spenders in every segment. All areas spent more. Center City had the biggest % increase, +27.2%, while Rural was only up +6.0%. This drove the drop in share and caused their performance to fall to 106.0%, from 108.2%. They’re still last in importance.
6. Income – Over $100K (61.1%) up from 57.0% Their performance also grew from 160.8% to 167.7%. Higher income is still the most important factor in Veterinary spending. The only drops were from <$30K, -$1.11B and $50>69K,  -$0.10B. The $100K> groups spent $4.85B more. This caused he big lifts in share and performance.
7. # Earners – “Everyone Works” (69.2%) up from 67.7% Their Performance also grew from 116.1% to 118.0%. They moved up from #7 to #6 in importance. Only No Earner, Singles spent less. 3+ Earners were only +$0.05B but 2 Earners & 1 Earner, Singles spent $4.56B more. They drove the group’s lifts.
8. Occupation – All Wage & Salaried (68.6%) up from 65.9% and their performance increased from 109.3% to 112.6%. In the group, only Blue Collar spent less. Outside the group, Self-employed & A/O, Unemployed spent less. White Collar workers spent $5.32B, +35.6% more. They drove the lifts in share in performance. We should also note that their perfomance lift was slowed a little because they had 1.1 million more CUs than in 2022.
9. CU Composition – Married Couples (61.5%) down from 62.5% Their performance also fell to 127.7% from 130.8% and they moved down to #3 from #2 in importance. Only Married, Oldest Child 18> & Single Parents spent less. The drops in share and performance were due to big lifts by Singles & Unmarried, All Adult CUs.
10. Education – College Grads (64.9%) up from 60.9%. Income generally increases with education. It is also important in understanding the need for regular Veterinary care. Their performance also increased from 130.3% to 135.8% and they moved up from #3 to #2 in importance. Only HS Grads or less spent less in 2023. College grads (47.8% of CUs) generated 84.7% of the 22>23 lift and 100% of the big increases in share and performance.

Spending disparity rose in 5 categories and fell in 5 categories. The average group performance was 125.4%, up from 123.2% in 2022 so spending became slightly less balanced. Notably, higher income & education became a little more important. In fact, a College Degree rose to #2 in importance.

Now, we’ll look at 2023’s best and worst performing Veterinary spending segments in each category.

There are no surprising winners or losers but 9 are different from 2022, up from 4 last year. This is 5 more than Services, and 1 more than Supplies but 2 less than the 11 in Food. Also, the average difference between Best & Worst was 89.8%, a little more than 88.8% in 2022. There was considerable turmoil, but it was evenly divided so the change in spending disparity between segments in 2023 was minimal. The changes from 2022 are “boxed”. We should note:

• Income– The Winner & Loser are the same. The gap is 175.0% but 6.8% less than 2022.
• Earners – 2 Earners replaced 3+ Earners on top but the gap widened by 3.8%.
• Occupation – Blue Collar replaced Service Workers at the bottom and the gap widened a lot, +32.3%.
• Age – 55>64 replaced 45>54 yr-olds and 75+ replaced <25. The gap actually narrowed by an incredible -42.0%.
• Race/Ethnic; Another set of expected repeats. The gap between winner and loser widened by 6.2%
• Education; Housing; Area – These all had an expected repeat winner & loser, but the performance gap change for Education was very different. Education: +33.3%; Housing: -15.0%; Area: -19.2%.
• Region – West replaced Midwest at the top. The South has now finished last for 8 years in a row, but the win/lose gap increased by 12.2%. Also, 3 regions performed at 100+%. That hasn’t happened since 2018.
• CU Composition – Couple Only replaced Child 18> & Single Parents replaced Child <6. The gap widened +14.8%.
• # in CU – 3 People replaced 4 on top and the gap grew by +5.3%. Only 2 & 3 people CUs perform above 100%.
• Generation – Born <1946 replaced Gen Z at the bottom and the performance gap narrowed by -13.4%.

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

We saw some turmoil in performance. It continues here. There was 1 repeat, and 13  segments flipped from 1^st to last or vice versa. Last year there were 3 repeats and 14 flips. There were no truly surprising winners and there was only 1 surprising loser – the high income, 45>54 yr olds. In 2023 there were 4 categories in which all segments spent more. In 2022, there were 3 where all spent less. Plus, in 2022, only 23% of 96 demographic segments spent more. In 2023, that grew to 82.3%. If you consider 9.4% inflation, 67.7% still spent more.

• Race/Ethnic – The winner and loser flipped.
  • Winner – White, Not Hispanic– Veterinary: $30.19B; Up $4.64B (+18.2%)                                            2022: African Americans
  • Loser – African Americans – Veterinary: $1.13B; Down $0.04B (-3.8%)                                                   2022: White, Not Hispanic
  • Comment– African American were the only group that spent less and the drop was small. Hispanics spent $1.24B, +58.7% more after a $1.12B drop in 2022. Asian Americans also spent a little more, $0.11B, +12.3%. That’s 4 consecutive years of increases for this group with a low level of pet ownership – very encouraging.
• Occupation – The winner and loser both flipped back to more “normal” positions.
  • Winner – Mgrs & Professionals – Vet Spending: $14.77B; Up $4.10B (+38.4%)                                    2022: Blue Collar
  • Loser – Blue Collar – Vet Spending: $1.36B; Down $0.56B (-29.2%)                                                         2022: Mgrs & Professionals
  • Comment – All Other/Unemployed & Self-Employed also spent less. We should also note that Retired had the 2^nd largest lift, both in $ and percentage, +$1.66B, +31.6%.
• Education – Adv. College degree flipped to the top. HS Grads replaced them at the bottom.
  • Winner – Adv. College Degree – Veterinary Spending: $11.85B; Up $3.79B (+47.1%)                           2022: <HS Grads
  • Loser – HS Grads – Veterinary Spending: $2.70B; Down $0.35B (-11.5%)                                                 2022: Adv College Degree
  • Comment – In 2023, only HS Grads or less had spending decreases. < College still spent $0.90B more in 2023, almost triple their 2022 lift. However, the big turnaround was in College Graduates. In 2022 they spent -$3.27B less than in 2021. In 2023 they spent $5.04B, +27.8% more. 85% of the Vet $ lift came from 48% of the CUs.
• # Earners – The winner and loser both flipped.
  • Winner – 2 Earners – Veterinary Spending: $15.69B; Up $3.49B (+28.6%)                                              2022: No Earner, Single
  • Loser – No Earner, Single – Veterinary Spending: $1.79B; Down $0.65B (-26.7%)                                 2022: 2 Earners
  • Comment – No Earner, Singles had the only decrease, but No Earner, 2+ CUs spent $1.04B more. Interestingly, the highest income segment, 3+ Earners had the smallest lift, +$0.05B, +1.2%.
• # in CU – 2 People flipped to the top and 4 People replaced them on the bottom.
  • Winner – 2 People – Veterinary Spending: $15.13B; Up $3.20B (+26.8%)                                                 2022: 3 People
  • Loser – 4 People – Veterinary Spending: $4.29B; Down $0.49B (-10.3%)                                                  2022: 2 People
  • Comment: In 2022, all groups spent less. In 2023, only 4 People CUs spent less. The 22>23 lift was definitely concentrated as 2 & 3 People CUs (47.7% of CUs) produced 88.4% of the lift, +$5.26B.
• Area Type – Suburbs 2500> flipped from last to 1^st and Rural replaced them at the bottom.
  • Winner – Suburbs 2500> – Veterinary Spending: $17.21B; Up $3.17B (+22.6%)                                    2022: Center City
  • Loser – Rural – Veterinary Spending: $7.48B; Up $0.43B (+6.0%)                                                              2022: Suburbs 2500>
  • Comment – In 2020 & 2021 all groups spent more. In 2022, all spent less. In 2023, all spent more again. Since 2020, all segments have the same spending pattern. Center City settled into 2^nd place after flipping for 3 straight years. The Suburbs 2500> have the biggest share of Vet $, 48.3% and generated 53.3% of the lift.
• CU Composition – The winner & loser are again both new.
  • Winner – Married, Couple Only – Veterinary: $11.17B; Up $2.30B (+26.0%)                                       2022: Married, Child 6>17
  • Loser – Married, Child 18> – Veterinary: $2.79B; Down $0.49B (-14.9%)                                               2022: Unmarried, 2+ Adults
  • Comment – Single Parents also spent less. 2023 favored CUs with no children. Married, Couple only had the biggest lift and 2^nd place went to Unmarried, 2+ All Adult CUs, +$2.18B, +50.9%.
• Region – The Midwest flipped to the bottom and the West replaced them on top. This ends 5 yrs of Northeast flips.
  • Winner – West – Veterinary Spending: $10.32B; Up $2.30B (+28.6%)                                                     2022: Midwest
  • Loser – Midwest – Veterinary Spending: $7.93B; Up $0.31B (+4.1%)                                                        2022: Northeast
  • Comment – All Regions spent more. In 2022, only the Midwest increased spending.
• Generation – Both winner & loser are new. (CU Comp was the only other category with a new winner & loser.)
  • Winner – Baby Boomers – Veterinary: $11.94B; Up $2.21B (+22.7%)                                                     2022: Gen X
  • Loser – Born <1946 – Veterinary: $1.38B; Down $0.44B (-24.0%)                                                             2022: Millennials
  • Comments – Only the oldest group spent less. In 2022, Millennials had the biggest drop. In 2023 they finished a close 2^nd to the Boomers, +$2.09B, +29.3%. In 2022, Gen Z “got on board” in every aspect of Pet Parenting, including an +80.9% increase in Veterinary $. In 2023 their commitment continued to grow as Vet $ were +133%.
• Housing – Homeowners w/Mtges stayed on top while those w/o Mtges replaced Renters at the bottom.
  • Winner – Homeowner w/Mtge – Veterinary: $19.11B; Up $2.21B (+13.1%)                                          2022: Homeowner w/Mtge
  • Loser – Homeowner w/o Mtge – Veterinary$: $86B; Up $1.83B (+22.9%)                                             2022: Renter
  • Comment – In 2023, all spent more. In 2022, all spent less but Renters had the only drop over -$1B. From 2020>2023: Homeowners w/Mtges are +$5.05B (+35.9%); Homeowners w/o Mtges are +$3.27B (+49.6%); Renters are +$2.51B (+59.9%). That’s strong, widespread growth in this category.
• Age – Both winner and loser flipped. That’s the 2^nd consecutive flip for 55>64.
  • Winner – 55>64 yrs – Veterinary Spending: $8.29B; Up $2.15B (+35.0%)                                             2022: 45>54 yrs
  • Loser – 45>54 yrs – Veterinary Spending: $6.91B; Up $0.01B (+0.2%)                                                    2022: 55>64 yrs
  • Comment: All segments spent more. The lift for 45>54 was virtually no gain. In 2022 the spending skewed a little older. In 2023, it also skewed older, but the lift was pretty evenly divided by the 45>54 age group. Segments below 45 yrs old spent $2.70B more (46% of the lift). Those 55> spent $3.23B more (54% of the lift).
• Income – $150>199K flipped to the top and <$30K replaced them at the bottom.
  • Winner – $150>199K – Veterinary Spending: $5.35B; Up $1.92B (+55.9%)                                           2022: $200K>
  • Loser – <$30K – Veterinary Spending: $1.97B; Down $1.11B (-35.9%)                                                    2022: $150>199K
  • Comment – Only the <$30K & $50>69K groups spent less. All groups $70K> had $1B increases so they were close to winning. Their increases were 21+% and generated 108% of the $5.95B Veterinary lift.

We’ve now seen the winners and losers in terms of increase/decrease in Veterinary Spending $ for 12 Demographic Categories. 2022 had a $2.95B drop. The decrease brought a lot of turmoil in the $ changes. In 2023 there was a huge turnaround as spending rose $5.95B, +20.0%  and reached $35.66B. The big flip in spending caused the  turmoil in $ change to continue. In 2023 only 1 held their spot and 13 flipped from 1^st to last or vice versa. In 2022 there were 3 holds and 14 flips – about the same. The biggest difference was that in 2022, only 23% of demographics spent more and there were 3 categories where all spent less. In 2023, 87% spent more and there were 4 categories where all segments had increases. This made the “hidden gems” much easier to find. Here are some segments that didn’t win but helped drive the big lift in Veterinary spending. These groups don’t win an award, but they certainly deserve…

HONORABLE MENTION

Married, Oldest Child <6 are just getting started. They have slightly above average income so the 142% lift in Vet spending shows that they are also committed to their Pet Children. Gen Z “got on board” with Pet Parenting in 2022. With big lifts in all segments, their commitment is growing even stronger in 2023. Hispanics have high pet ownership but low income. In 2022, their Vet spending fell $1B. In 2023, they found the $ for the needed services, +$1.24B. Lower incomes are always challenged by Veterinary high prices but many of the services are necessary for the health of their pets. In 2023, No Earner, 2+ CUs & $70>99K found over $1B more to spend on Vet Services. Renters also have low income, but pet ownership is growing in this segment. They had 30+% increases in the most needed segments – Pet Food & Vet Services.

Summary

In 2020 the pandemic focused Pet Parents on the needed segments. This drove a $3B increase in Veterinary $. Boomers & Millennials led the way, but the lift was widespread as 85% of demographic segments spent more. In 2021 the lift grew to a record $7.82B with 93% of all segments spending more including 9 categories where all segments had increases. In 2022, the “binge” was not repeated. Inflation also increased radically to 8.8% and spending fell -$2.95B (-9.0%). Only 23% of demographics spent more and in 3 categories all segments decreased spending.

In 2023 Inflation grew to 9.4% but the higher income groups stepped up. The $30>49K segments also found the necessary $ so their spending increased. The result was a $5.95B, +20.0% increase as Veterinary Spending reached $35.66B. In 2023, 82.3% of demographics spent more and in 4 categories all segments increased spending. Even considering the 9.4% inflation, 67.7% spent more – a big change from 2022.

The performance of big spending groups is very important in all industry segments. In Veterinary we identified 5 demographic categories with high performing (120+%) large groups. That is the same as 2022. It is 2 more than Pet Food, but 1 less than Supplies & 2 less than Services. The big groups with a high performance level in Veterinary are:

• Income: $100K> (167.7%) Performance increases with income but doesn’t reach 100+% until income reaches $70K
• CU Composition: Married Couples (127.7%) Only Married Couples (except Child <6) & All Adult CUs perform at 100+%.
• Education: College Grads (135.8%) Performance increases with education. All with an Associate’s Degree> are 100+%
• Housing: Homeowners (124.8%) Only Renters (53.8%) perform below 100%.
• Race/Ethnic: White, Not Hispanic (127.6%). Hispanics, African Americans & Asians only perform between 25% and 62%

Consumers have no control over Race/Ethnicity but can make decisions in the other categories. Income is still the most important factor. The others are important but essentially equal in performance – 125>136%. Although spending grew, the balance was basically unchanged with again 5 big groups performing over 120%. Another indication of this is that the average spending disparity between the best and worst performing segments only grew from 88.8% to 89.8%. We should note that the 50/50 spending dividing line did increase from $115K to $124K, emphasizing income’s importance.

Perhaps the biggest concern is high inflation. In 2021 spending grew 31.5% in the pandemic surge. Inflation was high at 4.2% but 84% of the growth was real. In 2022 spending fell -9.0%. Inflation was 8.8% so the amount sold was really down -16.4%. Also 77% of 96 demographic segments spent less $ but if we factor inflation into the numbers, 91% actually bought less Veterinary Services. In 2023, inflation reached a record 9.4%. Spending was +20.0% so the “real” increase was 9.7%. If high inflation continues it could have a major impact on Veterinary Spending. We’ll see.

Finally – The “Ultimate” Veterinary Services Spending CU consists of 4 people – a married couple with children. Their oldest child, still at home is under 18. They are 55>64 years old. They are White, but not of Hispanic origin. Both work. At least one of them has an Adv. College Degree and is a Mgr/Professional. Their total income is $200K>. They live in a small suburb, adjacent to a big city in the Western U.S. and are still paying off the mortgage on their home.

Next, we’ll turn our attention to Pets & Supplies. We’ll see differences from Pet Food as the spending in the Supplies segment is more discretionary. There are other factors too. Spending can be affected by the spending in other segments as consumers often trade $ between segments. However, the biggest factor is price. Many categories have become commoditized so price changes can impact buying behavior. In the 2nd half of 2016, deflation began, and Supplies started a 24 month lift, totaling $5B. Prices turned up in mid-2018 due to new tariffs and Supplies $ fell a record -$3B in 2019. In the 2020 pandemic, Supplies weren’t a necessity, so sales dropped -$1.7B. In 2021, Pet Parents caught up with their children’s needs and Supplies spending exploded, +$8.65B. In 2022, the “binge” was not repeated, and inflation was 7.7%. Spending fell -$1.86B. In 2023, inflation fell to 2.6% and Supplies $ grew $1.08B, 4.9% to $23.02B.

Let’s see which groups were most responsible for the bulk of Pet Supplies spending in 2023 and the $1.08B lift. The first chart details the biggest pet supplies spenders for each of 10 demographic categories. It shows their share of CU’s, share of Supplies spending and their spending performance (Share of spending/share of CU’s). 2 groups are different from Total Pet – Age & Education. The groups are presented in the order that reflects their share of Total Pet Spending. This highlights the differences in share. The biggest difference is in performance. There are 6 groups with performance of 120% or more, down from 7 in 2022, but 1 more than Total Pet and 3 more than Pet Food. The drop from 2022 indicates that Supplies spending became slightly more balanced in terms of the big groups in 2023.

1. Race/Ethnic – White, not Hispanic (83.6%) up from 81.5%. This large group accounts for the vast majority of spending in every segment. Their share increased and their performance grew from 121.2% to 125.9% and they moved up from #4 to #3 in importance in spending. Minority groups account for 33.7% of all CUs but spend only 16.4% of Supplies $. Only African Americans spent less but the lifts by Hispanics & Asians were under 1%.
2. # in CU – 2+ people (81.1%) down from 83.3% and their performance fell from 120.8% to 116.2% – Out of 120% Club. 2 & 4 People CUs spent less while 1 Person CUs were +18.6%. This caused the drops in share & performance.
3. Housing – Homeowners (78.4%) down from 78.8%. Homeownership is a big factor in pet ownership and spending in all segments. Their performance fell to 120.4%, from 121.0% but they stayed #5 in importance. All segments spent more but the w/o Mtge lift was only +0.5%. Renters led with +6.5%. This caused the small drops.
4. Age – 35>64 (61.9%) up from 61.8%. Their performance level rose to 118.8% from 118.6% and moved up from #8 to #7 in importance. Only the 25>34, 55>64 and 75+ yr-old groups spent less. All others spent more. However, most lifts were small. Only <25 (+63.1%) and 45>54 (+18.6%) had double digit % growth. The result of this mixture of spending was the miniscule increase in group share and performance.
5. Area – Suburban & Rural (72.5%) up from 70.3% and their performance grew to 110.7%, from 107.3%, but they stayed last in importance. In this category, only Center City spent less, -2.8%. The big Suburbs, over 2500 population only had a 0.9% lift. This was a bit of a surprise after their -$2.74B drop in 2022. The action was in the Rural areas. They were +$1.16B (+20.6%). The gains in share and performance were due to Rural spendng.
6. Income Over $70K (72.1%) up from (71.0%) A gain in share but their Performance fell from 150.2% to 142.7%. Income remains the most important factor in increased Pet Supplies Spending. Both <$70K and $70K> spent more. However, the lift for $70K> was $1.01B while <$70K was only $0.07B. Only 3 segments spent less – <$30K (-$0.07B), $40>49K (-$0.18B) & $100>149K (-$0.15B). Almost all of the lift came from $70K>. A key factor in the increase in share but drop in performance was that $70K> gained 4.5 million CUs. This gain in CU share lowered performance.
7. # Earners – “Everyone Works” (71.4%) up from 69.7%. Their performance grew from 119.5% to 121.8% and they moved up from #7 to #4 in importance and joined the 120% club. In this group, all adults in the CU work. The # Earners is more important than in Food but it is income that truly matters. In the group, only 2 Earners spent less, but 1 Earner, Singles were +$0.98B. They were the primary driver in the increase in share and performance.
8. Occupation – All Wage & Salary Earners (69.3%) up from 68.7%. Their performance was 113.8%, down from 114.0%. Only Tech/Sls/Cler & Self-Employed spent more. Tech/Sls/Cler was up +$1.55B. This drove the lift in share. Performance dropped in the group because they had a 1.1 million increase in CUs.
9. CU Composition – Married Couples (61.3%) up from 60.7%. Their performance also increased from 127.1% to 127.2% but they stayed 2^nd in importance. Only Married, Oldest Child <6 or 18> had decreases. The Married group was +0.78B, +5.9%. The “Unmarried” group was only +$0.3B, +3.5%. This resulted in the small increases in share and performance for all Married CUs.
10. Education – Associate’s Degree> (70.0%) down from 72.0%. This group was expanded to reach a 60+% share. In 2023, they lost market share and their performance level also decreased from 124.8% to 120.0%. Higher Education fell from 3rd to 6th in importance. In the Education category, the only spending decreases were by HS Grads and those with an Adv. College Degree. There were big lifts by HS Grads w/some College & <HS Grads. The BA/BS group couldn’t keep up so <College were +$0.92B, +10.1% & College Grads were +$0.15, +1.2%. This caused the drops.

Pet Supplies spending still skews more towards younger and higher income CUs than Food. However, the biggest difference may be in the spending disparity in segments within the big groups. Supplies now has 6 big groups with perfomance of at least 120%. That’s down from 7 in 2022, but it’s twice as many as the 3 in Pet Food.

Now, we’ll look at 2023’s best and worst performing Pet Supplies spending segments in each category.

Almost all of the best and worst performers are those that we would expect. There are truly no big surprises. In Pet Supplies spending, there are 8 that are different from 2022, up from 5 last year. That is 1 less than Veterinary & 3 less than Food, but 1 more than Total Pet and 4 more than Services. They have 5 new winners. With 6, only Food has more. In terms of disparity, the difference between the avg winner & loser was 95.4%, up from 87.5% in 2022 but stlll less than 123.6% in 2021. A little less balanced at the segment level. Changes from 2021 are “boxed”. We should note:

• Income matters in Supplies spending – 220.8% performance and a disparity of 180.9%.
• Occupation – Self-Employed replaced Managers. Only White Collar Workers – at any level, perform at 100+%.
• Education – Both are new, but not a big change from Adv College Degree & <HS Grads.
• Region – The Midwest replaced the West at the top and the South returned to their usual spot at the bottom. The South is the only Regon with under 100% performance. The disparity grew to 60% from 41% in 2022.
• CU Composition – Married, Oldest Child 6>17 returned to the top while Single Parents replaced Singles at the bottom. In 2023, all Married CUs, except those with an oldest child <6, performed over 100%.
• CU Size – 3 People CUs replaced 5+ People at the top. 1 Person CUs are the only size performing <100%.

Performance Overview – While the increase in the average performance disparity was small, 95.4% from 87.5%, it was widespread – 10 of 12 categories. Only Occupation & CU Size had less disparity between segments.

Now, it’s time to “Show you the money”. Here are segments with the biggest $ changes in Pet Supplies Spending.

In 2019, Tarifflation caused a record $2.98B drop in Supplies spending. 2020 brought the pandemic and pet parents focused on “needs” so the more discretionary Supplies segment fell another $1.65B. In 2021 Pet Parents caught up on  the Supplies needed by their “children” and spent a record $8.65B more. In 2022, the binge wasn’t repeated so the $ fell -$1.86B. In 2023 there was a small $1.08B lift. In the chart, there are 5 repeats from 2022 and 9 segments flipped from last to 1^st  or vice versa. In 2022 there was 1 repeat and 15 flips. In 2023, 65.6% of segments spent more (with inflation 54.2%) and Housing was all positive. In 22, only 52% spent more and no category was all positive. Here are the specifics:

• Occupation – Tech/Sls/Clerical flipped from last to 1^st and Blue Collar replaced them at the bottom.
  • Winner – Tech/Sales/Clerical– Supplies Spending: $4.37B; Up +$1.55B (+54.8%)                                             2022: Mgrs/Profess.
  • Loser – Blue Collar – Supplies Spending: $1.02B; Down -$0.38B (-27.0%)                                                           2022: Tech/Sls/Cler.
  • Comment – Only Tech/Sls/Cler & Self-Employed spent more in 2023. Managers & Professionals are the only segment that spent more every year 2020>22. Even their spending fell -2.7% in 2023. Except for Blue Collar, all of the drops in spending were small, less than -4.5%.
• Race/Ethnic – White, Not Hispanic and African Americans swapped positions at the top and bottom.
  • Winner – White, Not Hispanic – Supplies: $19.24B; Up +$1.36B (+7.6%)                                                   2022: African Americans
  • Loser – African Americans – Supplies: $0.97B; Down -$0.31B (-23.9%)                                                      2022: White, Not Hispanic
  • Comment – Their share of Pet Supplies $ rebounded to 83.3% from the 81.1% low in 2022. White, Not Hispanics still drive this discretionary segment. They have the highest % of pet ownership and the second highest income. The interaction of these two factors is very apparent in this category. Only African Americans spent less but the gains by Hispanics and Asians were <$0.02B. Whites produced 126% of the Supplies lift.
• Area Type– Center City flipped from 1^st to last and Rural replaced them on top.
  • Winner – Rural – Pet Supplies Spending: $6.76B; Up +$1.17B (+20.9%)                                                        2022: Center City
  • Loser – Center City – Pet Supplies Spending: $6.33B; Down -$0.18B (-2.8%)                                               2022: Suburbs 2500>
  • Comment– Only Center City spent less but the Suburbs 2500> only spent $0.09B more. Rural (Areas <2500 Population) drove the Supplies spending lift.
• Region – The South flipped from 1^st to last and the Northeast replaced them on top.
  • Winner – Northeast – Pet Supplies Spending: $4.07B; Up $1.11B (+37.2%)                                                  2022: South
  • Loser – South – Pet Supplies Spending: $6.99B; Down -$0.65B (-8.5%)                                                         2022: West
  • Comment – Like 2022, 2 spent more & 2 spent less. In 2022, the South & Midwest spent $1B more. In 2023, the Midwest again spent $1B more but they were joined by the Northeast. The West spent less in both years.
• # Earners – 2 Earners stayed on the bottom but a new 1 Earner winner – Singles.
  • Winner – 1 Earner, Single – Pet Supplies Spending: $3.37B; Up +$0.98B (+41.0%)                                   2022: 1 Earner, 2+ CU
  • Loser – 2 Earners – Pet Supplies Spending: $9.22B; Down -$0.40B (-4.2%)                                                 2022: 2 Earners
  • Comment – Income is the biggest factor, but the # of Earners is still important in Supplies Spending. The ups & downs were mixed with no clear pattern. 1 Earner, Singles, No Earner, 2+ CU and 3+ Earners spent more. No Earner, Singles, 1 Earner, 2+ CU and 2 Earners spent less. Most drops were small while all lifts were 17+%.
• Age – 45>54 stayed on top while the older 55>64 replaced 35>44 on the bottom.
  • Winner – 45>54 yrs – Pet Supplies Spending: $5.41B; Up $0.84B (+18.3%)                                                   2022: 45>54 yrs
  • Loser – 55>64 yrs – Pet Supplies Spending: $4.39B; Down -$0.26B (-5.6%)                                                    2022: 35>44 yrs
  • Comment: 2023 Supplies spending was an age rollercoaster. <25: +$0.40B; 25>34: -$0.17B; 35>54: +$0.95B; 55>64: -$0.26B; 65>74: +$0.25B; 75>: -$0.09B.
• # in CU – 3 People stayed on top. 4 People replaced 5+ on the bottom.
  • Winner – 3 People – Pet Supplies Spending: $4.49B; Up $0.78B (+21.1%)                                                      2022: 3 People
  • Loser – 4 People – Pet Supplies Spending: $2.86B; Down -$0.47B (-14.0%)                                                   2022: 5+ People
  • Comment: 3 People CUs were the only size to spend more in 2022. In 2023, 1 and 5+ CUs also spent more. Only 2 and 4 People CUs spent less.
• Housing – The winner and loser flipped positions.
  • Winner – Homeowner w/Mtge – Supplies: $12.44B; Up +$0.74B (+6.3%)                                           2022: Homeowner w/o Mtge
  • Loser – Homeowner w/o Mtge – Supplies: $5.60B; Up +$0.03B (+0.5%)                                             2022: Homeowner w/Mtge
  • Comment – All Housing segments spent more but all of the lifts were small. Renters finished second In $, +$0.34B but they had the biggest percentage increase, +6.8%.
• CU Composition – Married, Oldest Child 18> flipped from 1^st to last. Singles replaced them on top.
  • Winner – Singles – Supplies: $4.34B; Up $0.68B (+18.6%)                                                               2022: Married, Oldest Child 18>
  • Loser – Married, Oldest Child 18> – Supplies: $2.44B; Down $0.49B (-16.6%)                            2022: Married, Oldest Child 6>17
  • Comment – CUs with children spent -$0.06B less due to drops by Single Parents and Married couples with an oldest child under 6 or over 18. CUs with no children were +$1.14B.
• Generation – Gen X flipped from last to 1^st. Boomers replaced them on the bottom.
  • Winner – Gen X – Supplies: $7.71B; Up $0.67B (+9.5%)                                                                       2022: Gen Z
  • Loser – Boomers – Supplies: $6.50B; Down -$0.30B (-4.3%)                                                               2022: Gen X
  • Comment – Only Boomers and those born <1946 spent less. The younger groups – Gen X, Millennials and Gen Z spent more. Gen Z’s lift was only -$0.02B behind Gen X but the percentage was much bigger, +74.9%.
• Income – $150>199K stayed on top and $40>49K replaced $200K> on the bottom.
  • Winner – $150>199K – Pet Supplies Spending: $4.24B; Up +$0.61B (+16.7%)                                 2022: $150>199k                     
  • Loser – $40>49K – Pet Supplies Spending: $1.06B; Down -$0.18B (-14.6%)                                      2022: $200K>
  • Comment – All big groups <$70K, $70K>, <$100K and $100K> spent more. There were only 3 segments that spent less – <$30K, $40>49K and $100>149K. Except for $40>49K, the drops were -3.4% or less. While all big groups spent more, $150K> provided $1.0B (92.6%) of the Supplies lift.
• Education – Adv College Degrees stayed on the bottom while HS Grads w/some College replaced Associate’s on top.
  • Winner – HS Grad w/some College – Supp. Spending: $4.05B; Up +$0.58B (+16.6%)                         2022: Associate’s Degree
  • Loser – Adv. College Degree – Supplies Spending: $5.60B; Down $0.25B (-4.3%)                                 2022: Adv College Degree
  • Comment – HS Grads also spent less but the group w/o at least a BA/BS degree spent $0.92B more. This was 85.2% of the Total Supplies lift and certainly an unexpected pattern.

We’ve now seen the winners and losers in Pet Supplies Spending $ for 12 Demographic Categories. In 2022, despite the -$1.86B decrease, 52% of demographic segments spent more but there was no all-positive category.  In 2023, there was a small lift, $1.08B, 66% of demographics spent more (54% with inflation) and Area Type was all positive. Overall, 2023 had less turmoil than 2022. In performance, there were no surprises but the disparity between winner and loser increased by 8%. The performance winners reflected the importance of income in Supplies spending. However, not every good performer can be “the” winner and some of these “hidden” segments should be recognized for their performance. They don’t win an award, but they deserve…

HONORABLE MENTION

Supplies spending is driven by income, but Pet Parenting is widespread. This is very apparent in the strong performance of these segments. All have below average incomes, with many at or near the bottom in their category. The 100>250K Small City group is a low Total Pet spender but perform above 100% in Supplies. Gen Z’s surge in commitment to their Pets continues. In recent years, the <HS Grad group has significantly increased pet spending. In 2023 they turned their attention to Supplies. No Earner, 2+ CUs turned their attention to Pets with big spending lifts in all segments. 2023 was a great “Pet” year for Singles. They also had lifts in all industry segments. The $30>39K group had double digit lifts in all but Services. This clearly demonstrates that while income may be the most important, it is not the only factor in Supplies spending. Although the lift was small, it was demographically widespread.

Summary

While Pet Food spending has shown a definite pattern, Pet Supplies have been on a roller coaster ride since 2009. Many Supplies categories have become commoditized and react strongly to changes in the CPI. Prices go up and spending goes down…and vice versa. Supplies spending has also been reactive to big spending changes in Food. Consumers spend more to upgrade their Food, so they spend less on Supplies – trading dollars. We saw this in 2015. In 2016 the situation reversed. Consumers value shopped for Food and spent some of the “saved” money on Supplies.

That brought us to 2017. Both Supplies and Food prices deflated while the inflation rate in both of the Services segments dropped to lows not seen in recent years. Value was the “word” and it was available across the market. Perhaps the biggest impact was that the upgrade to super premium Food significantly penetrated the market. This could have negatively impacted Supplies Spending, but it didn’t. Supplies’ spending increased in 93% of all demographic segments.

2018 started out as expected with a $1B increase in Supplies and a small lift in Food. Then the government got involved. In July the FDA issued a warning on grain free dog food and spending dropped over $2B. New tariffs were implemented on Supplies and spending flattened out then turned down -$0.01B in the 2^nd half. The full retail impact of Tariffs hit home in 2019 when Supplies spending fell -$2.98B, affecting 97% of all demographic segments.

In 2020 The pandemic caused consumers to focus on needs. That resulted in big spending lifts for Food and Veterinary and big drops in Supplies and Services. Some good news was that Supplies spending became more balanced. The performance gap between best and worst narrowed by 10.25%.

In 2021 the overall Retail Market had recovered but with no repeat  of the buying binge, Pet Food $ dropped. In Supplies, the pent-up buying desires of Pet Parents were unleashed. They bought all the Supplies items that had been on “hold” for the last 2 years. The result was the biggest spending increase in history.  In 2022, the Supplies binge was also not repeated, and inflation took off, so spending fell -$1.86B. However, 52% segments still spent more on Supplies.

In 2023, inflation slowed and Supplies had a small $1.08B, 4.9% lift. 65.6% of segments spent more (54.2% with inflation) and the Housing category was all positive. At the Big Group level things were slightly more balanced with 6 performing at 120+%. (Down from 7) At the segment level, it was different. The 50/50 income spending divide increased from $114K to $117K and the disparity between the Best and Worst performers increased to 95.4% from 87.5%. The 2023 results are mixed but the recovery from the 2022 drop is under way. Ytd in 2024 inflation was only 0.7%. We’ll see what happens.

Finally – The “Ultimate” Pet Supplies Spending CU consists of 3 people – a married couple, with a child under 18. They are 45>54 yrs old. They are White, but not of Hispanic origin. They have their own business where they both work and at least one has a Associate’s Degree. Their child also works – part time and their household income is $150>199K. They live in a small suburb in the Midwest and are still paying off the mortgage on their home.

The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until it turned up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. Prices fell -0.1% in November but rose 0.04% in December. The CPI rose to +2.9% from +2.7% in November. Grocery prices rose 0.1% from November and inflation grew from 1.6% to 1.8%. However, after 12 months of 10+% YOY monthly increases, grocery inflation has now been below 10% for 22 months. Even minor price changes can affect consumer pet spending, especially in the discretionary pet segments, so we will continue to publish monthly reports to track petflation as it evolves in the market.

Petflation was +4.1% in Dec 21 while the overall CPI was +7.0%. The gap narrowed as Petflation accelerated and reached 96.7% of the national rate in June 22. National inflation has slowed considerably since then, but Petflation generally increased until June 23. It passed the CPI in July 22 but fell below it from Apr>Jul 24. It exceeded the CPI in August, fell below in Sep>Oct, rose above in Nov, then fell below in Dec. 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 (Note: December YTD = Annual)
  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 Dec 22 to Dec 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 from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In December, Pet prices were down -0.2% from November. The drop came from a mixture of patterns. Food (-0.6%) & Services (-0.5%) were down while Vet (+0.4%) & Supplies (0.1%) were up.

In Dec 22, the CPI was +15.5% and Pet was +16.0%. The Services segments generally inflated after mid-20, while Product inflation stayed low until late 21. In 22 Petflation surged. Food prices generally increased 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, Supp. & Vet  drove prices up. In Jan>Mar 24 Pet prices grew desspite a few dips by individual segments. In April, prices in all but Vet fell. In May, all but Food grew. In June, Products drove a lift. In July, all but Services fell. In Aug, Food drove a drop. In Sep, Products fueled a drop. In Oct, Services drove a lift. In Nov, all were up. In Dec, the segments were split but Total Pet fell.

• U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices rose Jan>Sep 23, dipped Oct>Dec, rose Jan>Oct 24, fell in Nov, then rose in Dec but 29.9% of the 22.8% increase in the 60 months since Dec 19 happened from Jan>Jun 22 – 10% of the time.
• Pet Food – Prices were at the Dec 19 level from Apr 20>Sep 21. They grew & peaked May 23. Jun>Aug ↓, Sep>Nov ↑ Dec>Feb ↓, Mar ↑, Apr>May ↓, June ↑, Jul>Oct ↓, Nov ↑, Dec ↓. 91% 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 ↑, Mar/Apr ↓, May/Jun ↑, July ↓, Aug ↑, Sep/Oct ↓ & Nov/Dec ↑.
• Pet Services– Inflation is usually 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but with fewer outlets. Inflation grew in 21 with the biggest lift in Jan>Apr. Inflation was strong in 22 but prices got on a rollercoaster in Mar>Jun. They turned up Jul>Mar 23 but the rate slowed in April and prices fell in May. Jun>Aug ↑, Sep>Dec ↓, Jan>Mar 24 ↑, Apr ↓, May ↑, June ↓, Jul>Nov ↑, Dec ↓.
• 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>Dec.
• Total Pet – Petflation is a sum of the segments. In Dec 21 the price surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in Dec, grew Jan>May 23 (peak), fell Jun>Aug, grew Sep/Oct, then fell in Nov. In December prices turned up and grew through March 24 to a record high. Prices fell in April, rose May>June (record), fell Jul>Sep, rose Oct>Nov (record), then fell in Dec. Petflation is again below the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for December 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 2.9% in November, and it is again below the National inflation rate (by -31.0%). 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 0.04% from November and were +2.9% vs Dec 23, up from +2.7% last month. Grocery inflation rose to +1.8% from 1.6%. Only 3 had price decreases from last month – all Pet: Food, Services & Total. There were 2 drops in Oct & Nov but 3 in Aug & Sep and 5 in July. The national YOY monthly CPI rate of 2.9% is up from 2.7%, but it is 15% below the 22>23 rate and 55% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies, Medical Services, Pet Services & Haircuts. 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 have skyrocketed, 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 93% 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 +4.4% while the CPI for Commodities is 0.3%. This clearly shows that Services are driving virtually all of the current 2.9% inflation. The situation in Pet is even more pronounced. Petflation: 2.0%. The combined CPI for the 2 Service Segments is 6.2%. The Pet Products CPI is -0.9%.

• U.S. CPI– Prices are +0.04% from Nov. The YOY increase is 2.9%, up from 2.7%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 45+% higher than the target. The December increase was the 3rd straight lift after 6 consecutive drops from Apr>Sep. The current rate is below 22>23 but the 21>24 rate is still +13.2%, 57.9% of the total inflation since 2019. Inflation was growing in December 2021, +7.0%
• Pet Food– Prices are -0.6% vs Nov. but -1.7% vs Dec. 23, down from -1.2%. They are still far below the Food at Home inflation rate of +1.8%. The YOY drop of -1.7% is being measured against a time when prices were 23.0% above the 2019 level but the current decrease is still more than double the -0.75% drop from 2019 to 2020. The 2021>2024 inflation surge generated 91% of the 20.9% inflation since 2019. Inflation began in June 2021.
• Food at Home – Prices are up +0.1% from November and the monthly YOY increase grew from 1.6% to 1.8%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.6% Inflation for this category since 2019 is 21.1% more than the national CPI but only in 3rd place behind 2 Pet Services expenditures. 55.4% 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 +0.1% from November and inflation fell to +1.5% vs Dec 23 from 2.8%. 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 99% of the total price increase since 2019. Prices set a record in October 2022 then deflated. 3 monthly increases pushed them to a record high in Feb 23. Prices fell in March, rose Apr/May (record), fell Jun>Aug, grew Sep>Oct, fell Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, rose in Aug, fell Sep>Oct, then rose Nov>Dec.
• Veterinary Services– Prices are +0.4% from Nov and +6.2% from 2023, down from 7.0%. They are #2 in inflation vs 23 but still the leader in the increase since 2019 with +38.9% and since 2021, +28.0%. 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 72.0% of the cumulative inflation since 2019 occurred from 2021>24.
• Medical Services – Prices turned sharply up at the start of the pandemic but then inflation slowed and fell to a low rate in 20>21. Prices rose +0.1% from Nov, but inflation vs last year slowed to +3.4% from +3.7%. Medical Services are not a big part of the current surge as only 55.0% of the 12.9%, 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, rose Jul>Nov, then fell in Dec. Their 11.5% rate is almost double the 6.3% rate in Aug. 68.2% 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 +0.03% from Nov and +4.8% from Dec 23. 10 of the last 12 months have been 4.0+%. Inflation has been pretty consistent. 57.2% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation fell to 2.0% from 2.9% due to a lower rate in all segments. It is 61% less than the 22>23 rate and now 31% below the U.S. CPI. Plus, 2.0% is 31% below the 3.1% average December rate since 1997. Vs Nov, prices fell -0.2%, primarily driven by Food. The Nov>Dec decrease was far below the +0.2% average change and a bit unexpected. A drop has only occurred in 8 of the last 25 years. Another factor in the big CPI drop was that prices rose 0.2% in Nov>Dec 23. In December, the recovery strongly restarted, and we are getting closer to a full recovery.

Now, let’s look at the YTD numbers. (Note: December YTD = Annual)

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, Haircuts, 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 +4.2% or higher.

• U.S. CPI – The 23>24 rate is 2.9%, slightly below 3.0% in November, but it is down 29% from 22>23, 64% less than 21>22 and 31% below the average annual increase from 2019>2024. However, it’s still 93% more than the average annual increase from 2018>2020. 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 0.2%, down from 0.3% in Nov. and 98.1% less than the 22>23 rate. Now, it is also 98.0% lower than 21>22 and 87% 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 1.2%, it is down 76% from 22>23, 89% from 21>22 and 66% from 20>21. Also, it is even 45% lower than the average rate from 2018>20. It is only in 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 69% 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 Nov>Dec. Inflation in 24 is 0.9% and is only higher than 19>20. Supplies have the lowest inflation since 2019. The most significant lift since 2019 was 7.7% in 2022. The 2021 deflation created a unusual situation. Prices are up 11.1% from 2019 but 105% of this lift happened from 21>24. Prices are up 11.6% 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, +7.4%, 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. In 24 it was 2.8%, just slightly above the 2.7% 2019>24 average rate. However, it is being measured against 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 & Dec. The 23>24 inflation rate of 7.0% is 2^nd to Veterinary on the chart. It is their highest annual rate and is 2.1 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. 2024 inflation was 4.5%, 17% below its 22 peak, but 27% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the purchase frequency.
• Total Pet – 2024 Petflation is 2.6%, the same as November. It is 68% less than 22>23 but 8% higher than the 2018>21 average rate. Plus, it is 10.3% below the CPI. Despite the YOY lifts in Aug & Nov, Petflation has slowed in 24. This was primarily driven by lower inflation in Pet Food & Supplies, while prices in Services (Nov) & Vet (Dec) reached new record highs. The patterns were mixed but Products dominate the Pet Industry, so Petflation slowed.

The Petflation recovery paused in Aug, came back Sep>Oct, paused in Nov, then resumed in Dec. At 2.0%, Dec was 37% below the 25 yr monthly average and the 2.6% rate for 2024 was 17% below the annual average. We tend to focus on monthly/annual inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 18.8% above 2021 and 24.2% higher than 2019. Those are big lifts. In fact, current prices for all segments are within 2% of the highest in history. Only Supplies prices (+10.6%) are less than 20.9% 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.