Archive for category: Pet Market Segments

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

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

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

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

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

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

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

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

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

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

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

• >$100K – (36.4% of CUs); CU Pet Spending: $1357.08, +10.1%; Total $: $65.778, ↑$10.99B (+20.1%) from…
  • Food: ↑$3.74B
  • Supplies: ↑$0.85B
  • Services: ↑$1.55B
  • Vet: ↑$4.85B
  • The $100K> group exceeded 50% of Pet $ for the 1^st time in 2020. Their lead is growing as they now do 55.9%.

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

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

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

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

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

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

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

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

Let’s look at some specifics.

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

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

  • Retired     • 65>74 years old  

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

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

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

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

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

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

Except for a small decline in 2017, Non-Vet Pet Services had shown consistent, small annual growth. In 2018, that changed as spending grew a spectacular $1.95B. The number of outlets offering Pet Services has rapidly grown and more consumers have opted for this convenience. However, spending plummeted -$1.73B in 2020 due to COVID closures and restrictions. 2021>2022 brought a spectacular recovery. Spending grew $5.47B (+79%). Growth slowed in 2023, +$1.05B (+8.5%) to $13.42B. In this report we will drill down into the data to see what groups drove the 2023 lift. (Note: All numbers in this report come from or are calculated from data in the US BLS Consumer Expenditure Surveys)

Services’ Spending per CU in 2023 was $99.73, up 8.2% from $92.21 in 2022. Note: A 2023 Pet CU (68%) Spent $146.66

More specifically, the 8.5% increase in Total Pet Services spending came as a result of:

• 0.3% more CUs
• Spending 7.8% more $
• 0.4% more often

The chart below gives a visual overview of recent spending on Pet Services

After the big lift in 2018, spending stabilized in 2019. Increased availability and convenience has significantly increased Services spending. This happened despite a return to a normal inflation rate, +2.4%. However, inflation grew to 2.5+% and in the 2^nd half of 2019 and spending declined slightly. The 2020 pandemic brought restrictions and closures which drove spending radically down. In 2021>2022 it grew spectacularly despite inflation rates of 4.9% in 2021 & 6.3% in 2022. In 2023, inflation was 5.7% and growth slowed. In fact the 8.5% lift was “really” only a 2.7% increase in the amount of Services bought. Now, let’s look at some demographics of 2023 Services spending.

First, by Income Group.

In 2022 all groups spent more. In 2023 <$50K & $70>100K had big drops. The biggest lifts came from higher incomes, especially $200K> which was up $1.16B. The 2023 50/50 dividing line in $ for Services was $147K. That is up radically from $134K last year and it is still by far the highest of any segment. It is readily apparent that income is overwhelmingly the primary driver in Pet Services spending.

• <30K (21.3% of CU’s) – $27.42 per CU (-12.3%) – $0.78B, ↓$0.21B (-21.4%) – This segment is shrinking and money is tight, so Services spending is less of an option. Inflation was still high and spending fell 21%. It is now below $1B.
• $30>70K (28.3% of CU’s); $50.13 per CU (+11.0%); $1.91B, Up $0.15B (+8.8%) – In 2020, they had the only increase and they are the only group to spend more in 2020, 2021, 2022 & 2023. In 23, $30>50K: ↓-$0.25B; $50>70K: +$0.4B
• $70>100K (14.1% of CU’s) – $65.67 per CU (-25.8%) – $1.24B, Down $0.43B (-25.8%) – The spending of this middle income group slowly but consistently grew 2016>19. Then it plummeted in 2020. They rebounded somewhat in 2021, but spending took off in 2022, a 61% lift. In 2023, they had the biggest drop.
• $100>150K (16.6% of CU’s) – $130.98 per CU (+6.9%) – $2.93B, Up $0.39B (+15.3%) – They had consistent growth from 2016>19. In 2020 they had the biggest drop. Consistent growth returned 2021>23 and they are now near $3B.
• $150K> (19.8% of CU’s) – $246.34 per CU (+8.2%) – $6.55B, Up $1.16B (+21.4%) – Spending fell 2019>20, then it took off in 21>23. They generate 49% of Services total $ and their CU spending is 2.5 times the national average. Note: Spending in the $150>199K segment was down -$0.01B so all of the $150K> group’s increase came from $200K>.

Now, let’s look at spending by Age Group.

<25, 35>64 & 75> spent more in 2023. Only 25>34 and 65>74 spent less. The biggest lift was from 55>64. The lifts from the oldest & youngest groups were minor. Spending share is relatively balanced from 35>64. Here are the specifics:

• 55>64 (17.8% of CU’s) $134.78 per CU (+29.2%) – $3.22B – Up $0.68B (+26.5%) 2017>2019 they slowly increased Services spending. A big drop in frequency drove spending down in 2020 but they had a strong recovery 21>23 and took the top spot in Services $ in 2021. They held on in 23 as 2.1% less CUs spent 16.2% more $, 11.2% more often.
• 45>54 (16.9% of CU’s)- $120.78 per CU (+11.4%) – $2.74B – Up $0.28B (+11.5%) This highest income group was #1 in Services $ in 2019 and held on in 2020 despite a 20% drop in frequency. In 2021 they had the only $ drop and fell to #3. In 2022 they moved up to #2. In 2023 0.1% more CU’s spent 12.3% more $, 0.8% less often. They are still #2.
• 35>44 (17.5% of CU’s) – $115.27 per CU (+9.2%) – $2.72B – Up $0.31B (+13.0%) A $1B increase in 2018 pushed them to #1. In 2019>20 spending fell. In 2021 they had a big increase and moved up to #2. In 2022 $ grew 17.6% but they fell to #3. In 2023 3.5% more CU’s spent 11.1% more $, 1.7% less often. They are still #3 but just $0.02B behind #2.
• 65>74 (16.0% of CU’s) – $97.47 per CU (-3.6%) – $2.10B – ↓ $0.09B (-4.2%). This group is very value conscious and had been growing in numbers until 2023. From 2017>19 their spending was stable. In 2020 it fell 20%. In 2021>22 they came back strong. In 2023 0.7% less CU’s spent 3.1% more $, 6.5% less often and Services $ fell -4.2%.
• 25>34 (15.7% of CU’s) – $78.22 per CU (-10.4%) – $1.65B – ↓ $0.18B (-9.6%). These Millennials “found” the Services segment in 2018. Their spending slowly fell in 2019>20 but reached a record high in 2021 due to an increase in frequency. In 2022 their $ surged but they fell in 2023 as 0.9% more CU’s spent 10.6% less $, 0.3% more often.
• 75> (11.6% of CU’s) – $51.85 per CU (+3.9%) – $0.81B – Up $0.05B (+6.2%) They have a big need for pet services, but money is always an issue. In 2019 they had the biggest lift but gave it all back in 2020. In 2021>22 spending surged with a big increase in frequency. In 2023 $ grew 6.2% as 2.2% more CU’s spent 15.2% more $, 9.8% less often.
• <25 (4.5% of CU’s) – $27.68 per CU (+4.5%) – $0.17B – Up $0.001B (+0.7%) After 2018 spending fell and essentially stabilized from 2019>23. They had a miniscule lift in 2023 as 3.7% less CU’s spent 13.5% less $, 20.8% more often.

Earlier, we saw that income was a big driver in Services spending, so it is no surprise that the 3 highest income age groups, 35>64, account for 64.7% of all Services $. They are also the only groups with 100+% performance ($ share/CU share) 65>74 is close, 97.7%. Pet Services offer great benefits, but you need to have/find the money to get them.

Finally, here are some key demographic “movers” that drove the lift in Pet Services Spending in 2023. The segments that are outlined in black “flipped” from 1^st to last or vice versa from 2022. A red outline stayed the same.

You see a little less stability in 2023. There were 7 that held their position and 2 flips from last to 1^st. In 2022, 13 held their position and there were no flips. Also, 2 categories had no segments that spent less on Services. There were 9 in 2022. In fact, in 2023, 72 of 96 segments (75%) spent more on Services than last year. In 2022 the percentage was 93%. So 2023 was not as great as 2022 but it was still good. The recovery growth has definitely slowed but it is still happening and is demographically widespread.

You see from the graph that, except for Education the winners’ changes were substantially larger than the losers’. This speaks to the strength and widespread nature of the lift. We should also note that regardless of the type of area that you live in or the number of people in your household, you spent more on Pet Services.

6 of the winners held their spot. Pet Services are a regular part of their Pet Parenting, and its importance continues to grow. The winners also demonstrate the importance of income to Services. While this segment has become more demographically widespread, higher incomes dominate. 9 of the 12 winners are either 1^st or 2^nd in income in their categories. The only winner that is bit of a surprise is Retired. High need, but low income – But more Boomers.

Almost all of the losers are not unexpected. Once again, if we look at income, 9 of 12 are at or near the bottom in income in their category. The other 3 also have below average incomes. Only Tech/Sls/Clerical is somewhat surprising, but their drop was very small, only -0.08B. We should also note that the biggest $ drop was by Associate’s Degree. In 2022 they more than doubled their Services spending.

In 2023, 75% of demographic segments spent more on Services than in 2022 and 99% from the low point in 2020. The segment has strongly recovered. However, when you factor 5.7% inflation into the 2023 numbers, only 32% of the 8.5% 22>23 lift was real, +2.7%. Plus, just 60% of demographic segments had a real increase in Services $. The recovery has definitely slowed. There is one spending trend that must be noted. Income continues to be the biggest factor in Services spending and its importance is growing. The 50/50 income dividing line in Services spending is now up to $147,000. That is 44% more than the average CU income and 84% more than the median income. $147K> is 22% of all CUs but accounts for 50% of Services $, 110% of the $1.05B lift from 2022 and 60% of the $6.5B increase from 2020.

Overview – After the huge lift in 2018, Services spending plateaued in 2019. That changed with the pandemic in 2020. Like many retail services segments, Pet Services outlets were deemed nonessential and subject to restrictions. This resulted in a radically reduced frequency of visits and was the biggest reason behind the 20% drop in spending.

2021 and 2022 brought a strong recovery with the 2 biggest increases in history. The segments that were hit the hardest by the pandemic generally had the strongest recovery. Both big lifts were largely driven by the same groups, but in 2022, 93% of all segments spent more. With continued high inflation, growth slowed markedly in 2023. 79% of segments had an increase in spending but only 58% had lifts that exceeded the inflation rate. Plus, the purchase frequency was only +0.4% from 22. However, one group stepped up – high income. CUs with $200K> income increased Services spending by $1.16B, 110% of the Services 22>23 lift. Pet Services have become more important to Pet Parents and the Pet Industry, but growth is increasingly being driven by high income. However, many households still find the $ to fill this need.

Total Pet spending grew to $117.60B in 2023, up $14.89B (+14.5%) from 2022. After a record $8.75B (+57%) increase in 2021 the Supplies segment fell $1.86B in 2022. They started to recover in 2023, up $1.08B (+4.9%) to $23.02B. (Note: All numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Surveys)

Supplies Spending fell -$4.6B 2018>20 due to Tarifflation and COVID. In 2021, Pet Parents caught up. Spending turned up in the 1^st half then skyrocketed in the 2^nd half. In 2022, it plateaued in the 1^st half then fell sharply in the 2^nd half. 2023 had a 1^st half lift & a 2^nd half drop. We’ll drill down into the data to determine what & who was drove the lift in Spending.

In 2023, the average household spent $171.08 on Supplies, up 4.5% from $163.64 in 2022. (Note: A 2023 Pet CU (68%) Spent $251.59) This doesn’t exactly match the 4.9% total $ increase. Here are the specific details:

• 0.3% more CU’s
• Spent 1.5% less $
• 6.1% more often

Let’s start with a visual overview. The chart below shows recent Supplies spending history.

Since the great recession, spending in the Supplies segment has been driven by price. Although many supplies are needed by Pet Parents, when they are bought and how much you spend is often discretionary. When prices fall, consumers are more likely to buy more. When they go up, consumers spend less and/or buy less frequently.

2014 was the third consecutive year of deflation in Supplies as prices reached a level not seen since 2007. Consumers responded with a spending increase of over $2B. Prices stabilized and then moved up in 2015.

In 2015 we saw how the discretionary aspect of the Supplies segment can impact spending in another way. Consumers spent $5.4B for a food upgrade and cut back on Supplies – swapping $. Consumers spent 4.1% less, but they bought 10% less often. That drop in purchase frequency drove $1.6B (78%) of the $2.1B decrease in Supplies spending.

In 2016, supplies’ prices flattened out and consumers value shopped for their upgraded food. Supplies spending stabilized and began to increase in the second half. In 2017 supplies prices deflated, reaching a new post-recession low. The consumers responded with a $2.74B increase in Supplies spending that was widespread across demographic segments. An important factor in the lift was an increase in purchase frequency which was within 5% of the 2014 rate.

In 2018 prices started to move up in April and rapidly increased later in the year due to the impact of new tariffs. By December, Supplies prices were 3.3% higher than a year ago. This explains the initial growth and pull back in spending.

In 2019 we saw the full impact of the tariffs. Prices continued to increase. By yearend they were up 5.7% from the Spring of 2018 and spending plummeted -$2.98B. The major factor in the drop was a 13.1% decrease in purchasing frequency.

2020 brought the pandemic. Prices deflated but with retail restrictions and the consumers’ focus on needed items, both the amount spent and frequency of purchase of Supplies fell.

In 2021 the recovery began with a strong lift in the 1^st half that reached record levels in the 2^nd half. Pet parents bought all the supplies that they had been putting off for 2 years – the biggest lift in history. 2021 spending ended up where it was headed in 2018 before being “derailed” by outside influences. In 2022 inflation took off, especially in the 2^nd half. Spending plateaued then fell -$2.44B in the 2^nd half. In the 1^st half of 2023 spending increased, primarily because of inflation. In the 2^nd half inflation fell to 0.1%, but prices were still high so spending dropped.

That gives us an overview of the recent spending history. Now let’s look at some specifics regarding the “who” behind the 2023 lift. First, we’ll look at spending by income level, the most influential demographic in Pet Spending.

National: $171.08 per CU (+4.5%) – $23.02B – Up $1.08B (+4.9%).

Only the <$30 & $100>150K income groups spent less but the 50/50 $ divide moved up to $117K from $114K.

• <$30K (21.3% of CUs)- $68.33 per CU (+7.7%); $1.95B– Down $0.07B (-3.4%). This group is very price sensitive, but they still need Supplies. Their Total Supplies $ only fell because they have 10.4% fewer CUs.
• $30K>70K (28.3% of CUs)- $117.82 per CU (+5.3%); $4.48B – Up $0.14 (+3.2%). This big, lower income group matches both the national spending pattern and that of the $150K+ group. 2019 Tarifflation and 2022 inflation had big impacts. Despite fewer CUs, spending grew. Until 2019 they were the leader in Supplies $. Now, they rank 3^rd.
• $70>$100K (14.1% of CUs) – $180.19 per CU (+4.7%); $3.41B – Up $0.15B (+4.7%). This group had consistent spending until 2020 hit them hard. They rebounded strong in 21 and spending even grew slightly in both 22 & 23.
• $100K>$150K (16.6% of CUs) – $214.74 per CU (-10.0%); $4.81B – ↓$0.15B (-3.0%). This group had the 2^nd biggest COVID drop. In 21 they had the 2^nd biggest recovery. In 22, they had the only significant lift but their $ fell 3% in 23.
• $150K> (19.8% of CUs) – $314.49 per CU (+1.2%); $8.36B – Up $1.00B (+13.6%). This highest income group had the biggest $ drop in 22, which is not surprising after a $4.6B lift in 21. In 23 they provided 93% of the Supplies lift. This came from 12.3% more CUs. BTW, the $150>200K group was again the driver as $200K> spent -3.2% less per CU.

With high prices, income matters. While $30>100K spent a little more, almost all of the overall lift came from $150K>.

Now, we’ll look at spending by Age Group.

National: $171.08 per CU (+4.5%) – $23.02B – Up $1.08B (+4.9%)

2023 was an age group spending rollercoaster. Under 25: ↑; 25>34:↓; 35>54: ↑; 55>64: ↓; 65>74:↑; 75>: ↓

• 45>54 (16.9% of CUs) $237.89 per CU (+18.1%); $5.41B – Up $0.84B (+18.3%). From 2007>2018 this highest income group was the leader in Supplies spending. They had a pandemic drop but strong growth in 21 & 22. The lift continued in 2023 as 0.1% more CU’s spent 19.8% more, 1.5% less often. They moved up from #2 to #1.
• 35>44 (17.5% of CUs) $189.19 per CU (-0.9%); $4.47B – Up $0.11B (+2.6%) They are 2nd in income and expenditures. Strong inflation drove their $ down in 2019 but COVID had little impact. Spending took off in 21, fell in 22 then grew slightly in 23 as 3.5% more CUs spent 6.1% less $, 5.6% more often. They are #2, up from #3
• 55>64 (17.8% of CUs) $183.28 /CU (-3.6%); $4.39B – ↓ $0.26B (-5.6%). Tarriflation caused a spending drop in 2019. Spending fell in 2020 as they binge bought pet food. They had a strong recovery in 21. Growth slowed in 22 then $ fell in 23 as 2.1% less CUs spent 12.9% less on Supplies, 10.7% more often. They fell from #1 to #3.
• 25<34 (15.7% of CUs) $165.46 per CU (-5.5%); $3.49B – Down $0.17B (-4.7%). After trading Supplies $ for upgraded Food and Vet Care in 2016, these Millennials turned their attention back to Supplies. Tarriflation hit them hard in 2019 but they actually increased spending in the pandemic. The lift grew even stronger in 2021 but then spending fell slightly in 2022 and again in 2023 as 0.9% more CUs spent 1.0% less $, 4.6% less often.
• 65>74 (16.0% of CUs) $145.29 per CU (+9.4%); $3.14B – Up $0.25B (+8.7%). This older group is very price sensitive so rising prices caused them to cut back on spending in 2019. Like the 25>34 yr-olds, they also increased spending in 2020 and spending soared in 2021. However, unlike the 25>34 yr-olds and despite high prices, their spending grew in 2022 and again in 2023 as 0.7% less CUs spent 2.2% more, 7.1% more often.
• 75> (11.6% of CUs) $70.27 per CU (-9.8%); $1.10B – Down $0.09B (-7.8%). This low-income group is price sensitive but they are committed to their pets. Their spending was severely impacted by the Pandemic. They had a strong recovery in 21 & 22 but their $ fell in 23 as 2.2% more CU’s spent 23.6% less, 18.1% more often.
• <25 (4.5% of CUs) $172.54/CU (+69.3%) $1.04B- Up $0.40B (+63.1%). Many moved in with other adults or got married. Many also added Pets to their CU. In 2023 3.7% less CUs spent 1.2% less $, 71.5% more often.

Supplies spending was on an age roller-coaster in 2023 with no clear pattern but the 45>54 group drove most of the lift.

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

In 2023, even with only a small increase, 65.6% of segments still spent more. In 2022 it was 52%. There was 1 Category – Housing, in which all spent more. That didn’t happen in 2022. In 2023 there were 9 “flips” and 5 that held their spot. In 2022 there were 15 “flips” and 1 “holdover”. 2023 was clearly better and more stable than 2022.

5 winners are the “usual suspects”:  • White, Not Hisp.    • $150>199K    • Gen X    • 45>54 yr-olds    • Homeown w/Mtge

5 are very surprising:  • Tech/Sls/Cler    • Rural    • 1 Earner, Single    • Singles    • HS Grad w/Some College

Among the losers, most often show up here. There are only 2 big repeat surprises:  • 2 Earners    • Adv. College Degree

After the post pandemic binge buy in 2021, Supplies spending fell $1.86B (-7.8%) in 2022. This was not surprising after the record $8.65B lift. It is very similar to the binge/bust pattern in Pet Food that occurred a year earlier. Although spending fell by $1.9B, 52% of 96 demographic segments spent more on Supplies. In 2023 spending grew $1.08B (+4.9%) as 65.6% of demographics spent more. There is a key factor to be considered to put 2022>23 Supplies spending in a better perspective. Many Supplies categories have been commoditized, so the segment has been very susceptible to price changes. Prices fell 2016>18 and spending grew by $5B. Prices rose in 2018/19 and spending fell -$4.6B. In 2022 the inflation rate was 7.7%. That means that the amount of Supplies purchased in 2022 was “really” -14.4%, almost double the actual $ drop. In 2023 Supplies spending grew by $1.08B (+4.9%). Annual inflation was 2.6% so the “real” lift was +2.3%. Inflation in the 1st half of 23 was 5.2% and spending was +$1.65B. In the 2^nd half the CPI fell to 0.1% but spending was -$0.57B. That is the opposite of what we would expect. Supplies spending is definitely more discretionary, but many products are needed for a better life – both for Pets and Pet Parents. As Supplies spending moves more towards higher incomes, perhaps Pet Parents are becoming less price sensitive in this segment. We’ll see what happens in 2024.

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>Aug 24. Despite a 0.1% increase in prices from July, YOY inflation slowed in August to +2.5% from +2.9% in July. This was due to a big Jul>Aug price lift in 2023. Grocery prices fell -0.1% from July and inflation slowed to 0.9%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 18 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. However, at 2.8% in August, it is again above the CPI, +12%. 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 August 22 to August 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 August, Pet prices were down -0.02% from July. The small price drop was entirely driven by Pet Food. All other segments were up.

In August 22, the CPI was +15.3% and Pet was +13.3%. 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, 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 August, Food drove a small drop in Total Pet prices.

• 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>Aug 24, but 31.4% of the 22.5% increase in the 56 months since Dec 2019 happened from Jan>Jun 2022 – 10.7% of the time.
• Pet Food – Prices were at Dec 19 levels from Apr 20>Sep 21. They then started to grow & peaked in May 23. In Jun>Aug they fell, grew Sep>Nov, fell Dec>Feb, rose in Mar, fell Apr>May, grew in June, then fell in Jul>Aug. 96% of the lift was in 22/23.
• Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They then had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices and essentially stayed there until 22. They turned up in Jan and hit an all-time 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 (another record high), a July drop and an August lift
• 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: ↑Up, Sep>Dec: ↓Down, Jan>Mar 24: ↑Up, Apr: ↓Down, May: ↑Up, June: ↓Down, Jul>Aug: ↑Up.
• 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, stabilized Jun/Jul, fell in Aug, grew Sep>Dec, fell in Jan, grew Feb>May, fell Jun>Jul, then grew in August.
• 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 in May>June (a record) then fell in Jul>Aug, but Petflation is again above the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for August 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 2.8%, up from 1.9% in July, and it is now +12.0% above the National rate. Last month, it was -34.5%. 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 July and were +2.5% vs August 23, down from +2.9% last month because there was a bigger Jul>Aug price lift in 23. Grocery inflation dropped to +0.9% from 1.1%. Only 3 had price decreases from last month – Pet Food, Total Pet and Groceries. There were 5 drops in July but only 2 in May & June. The national YOY monthly CPI rate of 2.5% is down from 2.9%. It is 32% below the 22>23 rate and 70% less than 21>22. The 23>24 rate is below 22>23 for all but Pet Supplies & Medical Services. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred in all but 2 segments – Medical Services & Haircuts – both Services categories. Service Segments have generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 97% 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 64.1% of the National CPI so they are very influential. Vs 2023, their current CPI is +4.8% while the CPI for Commodities is -1.2%. This clearly shows that Services are driving all of the current 2.5% inflation.

• U.S. CPI– Prices are +0.1% from June to a new record high. The YOY increase is 2.5%, down from 2.9% because of a big price lift in 2023. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 25+% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 3 consecutive drops and now 6 of 9 with drops – improving. The current rate is below 22>23 but the 21>24 rate is still +15.1%, 66.5% of the total inflation since 2019. Inflation was starting in August 2021.
• Pet Food– Prices are -0.4% vs July and -0.4% vs August 23, down from -0.04%. They are still significantly below the Food at Home inflation rate, +0.9%. The YOY drop of -0.4% is being measured against a time when prices were 22.7% above the 2019 level and the current decrease is only 2/3 of the -0.6% drop from 2019 to 2020. The 2021>2024 inflation surge has now generated 100+% of the 22.3% inflation since 2019. 2021 was the new “bottom”.
• Food at Home – Prices are down -0.1% from July and the monthly YOY increase fell from 1.1% to 0.9%. This is radically lower than Jul>Sep 2022 when it exceeded 13%. The 27.1% Inflation for this category since 2019 is 19.4% more than the national CPI but still in 4th place behind 3 Services expenditures. 66.1% of the inflation since 2019 occurred from 2021>24. This mirrors the national 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 +0.2% from July and inflation grew to +3.1% vs Aug 23 but they have the lowest rate vs 2019. As we have noted, prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 85.3% of the total price increase since 2019. Prices reached an all-time high in October 2022 then deflated. 3 monthly increases pushed them to a 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 in Nov, grew Dec>Feb, fell Mar>Apr, rose May>Jun (record), fell in July, then rose in August.
• Veterinary Services– Prices are +0.1% from July and +7.6% from 2023. They took the top spot in inflation vs 23 and are still the leader in the increase since 2019 with +37.4% and since 2021, +27.3%. 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 75.7% 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 July, but inflation vs last year slowed to +3.2% from +3.3%. Medical Services are not a big part of the current surge as only 49.6% of the 13.5% 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>Aug. Inflation peaked at +8.0% in March 23. In August, it was 6.3%, down from 6.6%. 67% of their total 19>24 inflation has occurred since 21. In Dec 23, it was only 49%. They have the 2^nd highest 19>24 rate.
• Haircuts/Other Personal Services – Prices are +0.6% from July and +4.7% from 23. 6 of the last 8 months have been 4.0+%. Inflation has been pretty consistent. Just 54.6% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation grew to 2.8% from 1.9% in July due to a big price drop in 23. It is still 58% less than the 22>23 rate but now 12% more than the U.S. CPI. 2.8% is 9.7% below the 3.1% average August rate since 1997. Vs July, prices fell -0.02%, driven entirely by Pet Food. The biggest Jul>Aug price decrease was in 23 but a drop has occurred in only 6 of the last 27 years, so this month’s data was a bit surprising. In terms of Petflation, 2024 appears to be moving back towards a more normal pattern. However, the path to get there will be unusual and 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 (2.8%) and Pet Supplies (2.2%). It comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.4% or higher.

• U.S. CPI – The 23>24 rate is 3.1%, down from 3.2% in July. It is also down 31% from 22>23, 63% less than 21>22 and 26% below the average YOY increase from 2019>2024. However, it’s still 37% more than the average annual increase from 2018>2021. 74% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
• Pet Food – Ytd inflation is 0.9%, down from 1.1% in July and 93% less than the 22>23 rate. Now, it is also 88% lower than 21>22 and 18% 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 prices 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 84% from 22>23, 90% from 21>22 and 52% from 20>21. Also, it is even 48% lower than the average rate from 2018>20. It is 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 74% of the inflation since 2019 occurred from 2021>24.
• Pets & Pet Supplies – Prices rose Jan>Feb, fell Mar>Apr, rose May>Jun, fell in July, then rose in August. Inflation in 24 is 0.5% and is only higher than the deflation in 19>20 & 20>21. Supplies have the lowest inflation since 2019. The only significant increases were 7.2% in 22 & 4.3% in 23. The 2021 deflation created an unusual situation. Prices are up 11.4% from 2019 but 109% of this increase happened from 2021>24. Prices are up 12.4% 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, +7.7%, 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 2.4 times higher than the Inflation average for Medical Services. Strong Inflation is the norm in Veterinary Services.
• Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. Ytd it is 2.4%. 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 5.6% is 2^nd to Veterinary on the chart. It is 20% less than 22>23 and 7% below 21>22. However, it is still 1.7 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 4.4%, which is 19% below its 21 peak, but 33% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
• Total Pet – Ytd Petflation is 2.7%, the same as July. It is 72% less than 22>23 but 17% 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 inflation, but Ytd Supplies inflation is also low. Services prices set a new record in August and Vet prices grew. The mixture of patterns produced the stability of the August Ytd Pet CPI.

Petflation has definitely slowed in 24 but it hit the pause button in August. At 2.8%, August was 9.7% below the average for the month but is now 12% higher than the National CPI. We continue to focus on monthly inflation while ignoring one critical fact. Inflation is cumulative. Pet prices are 20.7% above 2021 and 25.2% higher than 2019. Those are big lifts. In fact, in August prices for Pet Services set a new record while prices for Total Pet & all other pet segments are less than 0.8% below the highest in history. Only Pet Supplies prices (+11.6%) are less than 22% 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 and SZ 24 as a huge # of exhibitors offered OEM services. Strong, cumulative inflation has a widespread impact.

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>Jun 24. However, the CPI slowed in June to +3.0% from +3.3% in May. Grocery prices increased slightly, 0.02% from May and inflation rose to 1.1% from 1.0%. After 12 straight months of double-digit YOY monthly increases, grocery inflation has now had 16 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 at 2.0% in June, it is 33.3% below the national rate, a big change from +52% in January. 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 June 22 to June 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 June, Pet prices were up 0.3% from May. The Product segments were up, while the Service segments were down.

In June 22, the CPI was +15.3% and Pet was +11.1%. 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 except for 1 dip by Supplies. In May Products prices grew while Services slowed. In Jun/Jul this reversed. In August all but Services fell. In Sep/Oct this was reversed. 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 price 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>Jun 24, but 31.5% of the 22.3% increase in the 54 months since Dec 2019 happened from Jan>Jun 2022 – 11.1% of the time.
• Pet Food – Prices were at or below 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. 97% of the lift was in 22/23.
• Pet Supplies – Supplies prices were high in Dec 19 due to tariffs. They then had a “deflated” roller coaster ride until mid-21 when they returned to Dec 19 prices and essentially stayed there until 22. They turned up in Jan and hit an all-time 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, then continued the rollercoaster with Dec>Feb lifts, Mar/Apr drops & May/Jun lifts, to a new high.
• 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. They rose Jun>Aug, fell Sep>Dec, rose Jan>Mar, fell in Apr, rose in May, fell in June.
• 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, prices grew Jan>May, stabilized Jun/Jul, fell in Aug, grew Sep>Dec, fell in Jan 24, grew Feb>May, then fell in June.
• 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 then rose in May & June, a new record, but Petflation is just 2/3 of the National CPI.

Next, we’ll turn our attention to the Year Over Year inflation rate change for June 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 2.0%, up from 1.6% in May, but it is still 33% below the National rate. In January, it was +52%. 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 +0.03% from May and were +3.0% vs June 23, down from +3.3% last month because there was a bigger May>Jun price lift in 23. Grocery inflation grew slightly to +1.1% from +1.0%. Only Pet Services & Veterinary had  price decreases from last month. There were also 2 drops in May – Pet Food & Groceries. The national YOY monthly CPI rate of 3.0% is down from 3.3% and equal to the 22>23 rate but only 33% of 21>22. The 23>24 rate is also equal to 22>23 for Pet Serv & Haircuts and only more for Med Serv. In our 2021>2024 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred in all but 2 segments – Medical Services & Haircuts – both Services categories. Service Segments have generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Pet Products have a very different pattern. The 21>24 inflation surge provided 104% 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 64.1% of the National CPI so they are very influential. Their current CPI is +5.0% while the CPI for Commodities is -0.4%. This clearly shows that Services are driving the current 3.0% inflation rate.

• U.S. CPI– Prices are +0.03% from May. The YOY increase is 3.0%, down from 3.3%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 50+% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 2 consecutive drops and now 4 of 7 with drops – a little better. The current rate is equal to 22>23 but the 21>24 rate is still +15.6%, 68.7% of the total inflation since 2019. Inflation was low in June 2021.
• Pet Food– Prices are +0.7% vs May and -0.2% vs June 23, up from -1.1%. They are still significantly below the Food at Home inflation rate, +1.1%. The YOY drop of -0.2% is being measured against a time when prices were 23.1% above the 2019 level and the current decrease is still less than the -0.7% drop from 2019 to 2020. The 2021>2024 inflation surge has generated 98.7% of the total 23.4% inflation since 2019.
• Food at Home – Prices are up 0.02% from May and the monthly YOY increase is 1.1%, up from 1.0%. It is radically lower than Jul>Sep 2022 when it exceeded 13%. The 26.7% Inflation for this category since 2019 is 18% more than the national CPI but still in 4th place behind 3 Services expenditures. 70.4% of the inflation since 2019 occurred from 2021>24. This mirrors the national 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 up 1.0% from May and are +0.6% vs June 2023. They have the lowest increase since 2019. As we noted, prices were deflated for much of 20>21. As a result, the 2021>24 inflation surge accounted for 100+% of the total price increase since 2019. Prices reached an all-time high in October 2022 then deflated. 3 months of increases pushed them to a record high in Feb 23. Prices fell in March, rose in Apr/May to a new record, fell in Jun>Aug, grew in Sep>Oct, fell in Nov, grew again Dec>Feb, fell Mar>Apr, then rose May>Jun to a new record.
• Veterinary Services– Prices are -0.5% from May but +6.4% from 2023, still the highest rate in the Pet Industry. Plus, they are the leader in the increase since 2019 with +38.6% and since 2021, +27.5%. 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 71.2% 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 grew 2% from May, and they are +3.3% vs last year. Medical Services are not a big part of the current surge as only 50% of the 15.0% 2019>24 increase happened from 21>24.
• Pet Services – Inflation slowed in 2020 but began to grow in 2021. In 2024 prices surged Jan>Mar dropped in April, set a record in May, then fell to +6.3% vs 23 in June. Inflation peaked at +8.0% in March 23. Now, 69% of their total 19>24 inflation has occurred since 2021. In December, it was only 49%. They still have the 2^nd highest 19>24 rate.
• Haircuts/Other Personal Services – Prices are +0.6% from May and +5.0% from 23. 4 of the last 6 months have been 4.0+%. Inflation has been pretty consistent. 62% of the 19>24 inflation happened 21>24.
• Total Pet– Petflation rose to 2.0% from 1.6% in May but is still 79% less than the 22>23 rate and 33% less than the U.S. CPI. For June, 2.0% is 35.5% below the 3.1% average rate since 1997. Vs May, prices grew 0.3% as Product prices were up while Services prices fell. A May>Jun price increase has happened in 18 of the last 27 years, so this month’s data was not surprising. In terms of Petflation, even with the CPI increase, 2024 appears to be returning to a more normal pattern. However, the path to get there may be unusual and 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 & Haircuts. 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 (2.8%) and Pet Supplies (2.2%). It comes as no surprise that Veterinary Services has the highest average rate (6.7%), but all 5 other categories are +4.5% or higher.

• U.S. CPI – The 23>24 rate is 3.2%, down from 3.3% in May, but also down 35% from 22>23 and 61% less than 21>22. It is also 24% below the average YOY increase from 2019>2024, but it’s still 52% more than the average annual increase from 2018>2021. 76% of the 22.7% inflation since 2019 occurred from 2021>24. Inflation is a big problem that started recently.
• Pet Food – Ytd inflation is 1.3%, down from 1.6% in May and 91% less than the 22>23 rate. Now, it is also 80% lower than 21>22 and 24% below the average rate from 2018>2020. 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 prices surged in 2022 and especially in 2023. 95% of the inflation since 2019 occurred from 2021>24.
• Food at Home – The inflation rate has slowed remarkably. At 1.1%, it is down over 86% from 22>23, 89% from 21>22 and 50% from 20>21. Also, it is even 44% lower than the average rate from 2018>20. It remains in 3rd place for the highest inflation since 2019 but still beat the U.S. CPI by 16%. You can see the impact of supply chain issues on the Grocery category as 76% of the inflation since 2019 occurred from 2021>24.
• Pets & Pet Supplies – Prices increased Jan>Feb, fell Mar>Apr then rose in May>Jun. The 2024 inflation rate of 0.2% is only higher than the deflation in 19>20 & 20>21. Supplies have the lowest inflation since 2019. The only significant increases were 4% in 22 & 5.2% in 23. The 2021 deflation created a unique situation. Prices are up 11.5% from 2019 but 115% of this increase happened from 2021>24. Prices are up 13.2% 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 at the start of 2024, +8.0%, 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 2.4 times higher than the Inflation average for Medical Services. Strong Inflation is the norm in Veterinary Services.
• Medical Services – Prices went up significantly at the beginning of the pandemic, but inflation slowed in 2021. Ytd it is 2.1%. 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 5.3% is 2^nd to Vet in the Pet Industry. It is 24% less than 22>23 and 13% below 21>22. However, it is still 1.7 times higher than the 2018>21 average rate. Pet Services is 2^nd in 19>24 inflation but only 5^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 4.4%, which is 19% below the 21 & 22 peak but 40% above the 18>20 average. Consumers are paying over 25% more than in 2019, which usually reduces the frequency.
• Total Pet – Ytd Petflation is 2.9%, down from 3.0%. It is 72% less than 22>23 but 24% higher than the 2018>21 average rate. However, it is still 9% below the CPI. Despite the May & June price lifts, Petflation has slowed in 24. This is primarily being driven by drops in Pet Food inflation but Ytd Supplies inflation is also low. Services and Veterinary prices both fell from record highs in May, which also contributed to the slight drop in the Ytd Pet CPI.

Petflation has definitely slowed in 24. June was 35% below the average for the month and 33% lower than the National CPI. This is about the same as it was back In 2021. One fact is often ignored in the headlines – Inflation is cumulative. Pet prices are 21.7% above 2021 and 25.8% higher than 2019. Those are big lifts. In fact, in June prices for Supplies & Total Pet set new records. Services & Veterinary prices are less than 0.5%s below the highest in history and Food prices are 0.4% below their peak. Only Supplies prices (+11.5%) are less than 24% 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 likely 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 GPE 24 & will see it at SZ 24 as a huge # of exhibitors offer OEM services. Strong, cumulative inflation has a widespread impact.