Archive for category: Pet Market Segments

Inflation continues to slow but is still far above the target rate. The huge YOY increases in the monthly Consumer Price Index peaked in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices dropped in Oct & Nov and the November CPI  fell to +3.1% from +3.2% vs 2022. Grocery inflation also continued to slow. After 12 straight months of double-digit YOY monthly increases, grocery inflation is now down to +1.7%, 9 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 2022 and at 4.3% in November, it is still 38.7% above the national rate of 3.1%. We will look deeper into the numbers. This and future 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 23 vs 22 which will include Pet Segments and relevant Human spending categories. Plus
  1. CPI change from the previous month.
  2. Inflation changes for recent years (21>22, 20>21, 19>20, 18>19)
  3. Total Inflation for the current month in 2023 vs 2019 and now vs 2021 to see the full inflation surge.
  4. Average annual Year Over Year inflation rate from 2019 to 2023
• 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 November 21 to November 23. 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 current numbers plus yearend and those from 12 and 24 months earlier are included. We also included and highlighted (pink) the cumulative price peak for each segment. In November, Pet prices were down from last month overall and in all segments but Food & Vet Services.

In November 21, the CPI was +8.2% and Pet prices were +3.5%. Like the CPI, prices in the Services segments generally inflated after mid-2020, while Product inflation stayed low until late 21. In 22 Petflation took off. Food prices grew consistently but the other segments had mixed patterns until July 22, when all increased. In Aug>Oct Petflation took off. In Nov>Dec, Services & Food prices continued to grow 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 June/July this was reversed. In August all but Services fell. In Sep/Oct this was reversed. In November, all but Food & Veterinary Services fell driving down Total Pet prices, -0.2% vs October. Petflation has been above the CPI since Nov 22.

• 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, then dipped in Oct/Nov, but 35% of the 19.5% increase in the 47 months since December 2019 happened in the 6 months from January>June 2022 – 13% of the time.
• Pet Food – Prices were at or below Dec 2019 levels from Apr 20>Sep 21. They turned up and grew, peaking in May 23. In Jun>Aug they dipped but grew again in Sep>Nov. 93% of the 23.2% increase has occurred since 22.
• Pet Supplies – Supplies prices were high in Dec 19 due to added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to Dec 19 prices and essentially stayed there until 2022. They turned up in January and hit an all-time high, beating the 2009 record. They plateaued Feb>May, grew in June, flattened in July, then turned up in Aug>Oct setting a new record. Prices stabilized in Nov>Dec but turned up in Jan>Feb 23, a new record. They fell in March, peaked at a new record in May, fell in Jun>Aug, grew in Sep>Oct, then fell in Nov.
• Pet Services– Normally inflation is 2+%. Perhaps due to closures, prices increased at a lower rate in 2020. In 2021 consumer demand increased but there were fewer outlets. Inflation grew in 2021 with the biggest lift in Jan>Apr. Inflation was stronger in 2022 but it got on a rollercoaster in Mar>June. It turned up again July 22>Mar 23 but the increase slowed to +0.1% in April. Prices fell -0.3% in May, turned up again, peaking in Aug, then fell in Sep>Nov.
• Veterinary – Inflation has been consistent. Prices turned up in March 20 and grew through 21. A surge began in December 21 which put them above the overall CPI. In May 22 prices fell and stabilized in June causing them to fall below the National 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, then grew Sep>Nov to a new high.
• 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. Except for 5 monthly dips, prices in all segments increased monthly Jan>Jun 23. In Jul/Aug there 5 more dips, 2 in Sep/Oct, then 2 big ones in Nov. Petflation has been above the CPI since Nov 22

Next, we’ll turn our attention to the Year Over Year inflation rate change for November and compare it to last month, last year and to previous years. We will also show total inflation from 21>23 & 19>23. Petflation fell again to 4.3% in November, but it is still almost 1.4 times the National rate. The chart will allow you to compare the inflation rates of 22>23 to 21>22 and other years but also see how much of the total inflation since 2019 came from the current pricing surge. Again, we’ve included some human categories to put the pet numbers into perspective.

Overall, Prices were -0.2% from October but were +3.1% vs November 22, down from +3.2% in October. Grocery inflation is down again, to +1.7% from +2.1%. 5 of 9 categories had a price decrease from last month – National CPI, Total Pet, Groceries, Pet Supplies & Services. There were only 2 in October. That’s 3 months in a row for Pet Services. The national YOY monthly CPI rate of 3.1% is only 44% of the 21>22 rate. The 22>23 inflation rate is below 21>22 for all categories for the 3rd consecutive month. In our 2021>2023 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred in only 4 segments – Total Pet, Pet Food, Pet Supplies and Veterinary – All Pet. We should also note that the segments with the lowest percentages are Haircuts, Pet Services and Medical Services. Service Segments have generally had higher inflation rates so there was a smaller pricing lift in the recent surge. Services expenditures account for 61.8% of the National CPI so they are very influential. We also see that Pet Products have a very different pattern. The 21>23 inflation surge provided 97.8% of their overall inflation since 2019. This happened because Pet Products prices in 2021 were just starting to recover from a deflationary period.

• U.S. CPI– Prices are -0.2% from October. The YOY increase is 3.1%, down from 3.2%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 55% higher than the target. After 12 straight declines, we had 2 lifts, then a stable month and now 2 consecutive drops – good news! The current inflation rate is 56.3% below 21>22 but the 21>23 rate is still 10.5%. That is 54% of the total inflation since 2019, but down from 57% last month.
• Pet Food– Prices are +0.01% vs October and +5.6% vs November 22, down from 6.5%. However, they are still 3.1 times the Food at Home inflation rate. The YOY increase of 5.6% is being measured against a time when prices were 16.3% above the 2019 level, but that increase is still 1.5 times the pre-pandemic 3.7% increase from 2018 to 2019. The 2021>2023 inflation surge has generated 96.9% of the total 22.9% inflation since 2019.
• Food at Home – Prices are down -0.5% from October. The monthly YOY increase is 1.7%, down from 2.1% in October and radically lower than Jul>Sep 2022 when it exceeded 13%. The 25.4% Inflation for this category since 2019 is 31% more than the national CPI and remains 2^nd to Veterinary. 54% of the inflation since 2019 occurred from 2021>2023. The pattern mirrors the national CPI, but we should note that Grocery prices began inflating in 2020>2021 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 down -0.5% from October and -1.2% vs November 2022. They still have the lowest increase since 2019. As we noted, prices were deflated for much of 2021. However, even with recent price drops the 2021>2023 inflation surge accounted for 82% of the total price increase since 2019. They reached an all-time high in October 2022 then prices deflated. 3 months of increases pushed them to a new record high in February. Prices fell in March, bounced back in Apr/May to a new record high, fell in Jun>Aug, grew in Sep>Oct, then fell in November.
• Veterinary Services – Prices are up +1.0% from October. They are +9.0% from 2022, again the highest rate in the Pet Industry. Plus, they are still the leader in the increase since 2019 with 30.0% compared to Food at home at 25.4%. For Veterinary Services, relatively high annual inflation is the norm. The rate did increase during the current surge so 70% of the 4 years’ worth of inflation occurred in the 2 years from 2021>2023.
• 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 0.3% from October but are -0.9% vs 22. Prices have now deflated for 7 straight months. Medical Services are not a big part of the current surge as only 39% of the 2019>23 increase happened from 21>23.
• Pet Services – Inflation slowed in 2020 but began to grow in 2021. November 23 prices were -2.1% from October and only +1.4% vs 22, which is down 70% from 4.7% last month and 84% lower than 8.0% in March. Now, only 50% of their total 17.8% inflation since 2019 occurred from 21>23.
• Haircuts/Other Personal Services – Prices are up 0.3% from October and +3.9% from 2022, down sharply from 5.0% last month. Inflation has been rather consistent as 51% of the inflation from 19>23 happened from 21>23.
• Total Pet– Petflation is now 64% lower than the 21>22 rate, but still 1.4 times the U.S. CPI. For November, +4.3% is the 4th highest rate since 1997 (2022: 12.0%; 2008: 10.0%; 2007: 5.3%). Vs October, prices fell for Supplies & Services so Total Pet was -0.3%. An Oct>Nov drop has only happened in 6 of the last 24 years so it was a surprise. Veterinary & Food are still the Petflation leaders, but all segments have an influence. Pet Food has been immune to inflation as Pet Parents are used to paying a lot, but inflation can reduce purchase frequency in the other segments.

Now, let’s look at the YTD numbers

The increase from 22>23 is the biggest for 2 of 9 categories – both Pet, Pet Food & Veterinary. The 22>23 rates for Haircuts, Pet Services & Total Pet are slightly below 21>22. However, the CPI, Pet Supplies, Medical Services and Food at Home are significantly down from 21>22. The average annual increase since 2019 is 4.5%+ for all but Medical Services (2.7%) and Pet Supplies (2.5%).

• U.S. CPI – The current increase is down 48% from 21>22 and 6.7% less than the average increase from 2019>2023, but it’s 72% more than the average annual increase from 2018>2021. 66% of the 19.2% inflation since 2019 occurred from 2021>23. Inflation is a big problem that started recently.
• Pet Food – Strong inflation continues with the highest 22>23 & 21>23 rates on the chart. Deflation in the 1^st half of 2021 kept YTD prices low then prices surged in 2022. 96% of the inflation since 2019 occurred from 2021>23.
• Food at Home – The 2023 YTD inflation rate has slowed but still beat the U.S. CPI by 29%. You can see the impact of supply chain issues on the Grocery category as 69% of the inflation since 2019 occurred from 2021>23.
• Pets & Pet Supplies – Prices fell in November and the YTD inflation rate is down to 2.9%. Prices deflated significantly in both 2020 & 2021 which helped to create a very unique situation. Prices are up 10.2% from 2019 but 105% of this increase happened from 2021>23. Prices are up 10.7% from their 2021 “bottom”.
• Veterinary Services – They are still #1 in inflation since 2019 but they have only the 2^nd highest rate since 2021. At +6.5%, they have the highest average annual inflation rate since 2019. Inflation was high and consistent, around 4% from 2019>2021. It took off in 2022. Regardless of the situation, 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 2023 prices have generally been deflating and are now at -0.3% YTD, the only current deflation in any segment.
• Pet Services – May 22 set a record for the biggest year over year monthly increase in history. Prices fell in June but began to grow again in July, reaching record highs in Sep>Apr 23. The January 2023 increase of 8.4% set a new record. Prices have dropped Sep>Nov and YTD November fell to 6.1% from 6.6% in October and 7.0% in August. Their price surge started in 2021 when inflation jumped to 4.7% from 2.5% in 2019 & 2020.
• Haircuts & Personal Services – The services segments, essential & non-essential, were hit hardest by the pandemic. After a small decrease in March 22, prices turned up again. Since 2021 inflation has been a consistent 5+%, 89% higher than 18>19. Consumers are paying 21% more than in 2019, which usually reduces the purchase frequency.
• Total Pet – There were two patterns. After 2019, Prices in the Services segments increased, and the rate grew into 2021. Pet products – Food and Supplies, took a different path. They deflated in 2020 and didn’t return to 2019 levels until mid-year 2021. Food prices began a slow increase, but Supplies remained stable until near yearend. In 2022, Food and Supplies prices turned sharply up. Food prices grew until Jun>Aug 23. Supplies prices stabilized Apr>May, grew Jun>Oct, fell in Nov, rose in Dec>Feb, fell in Mar, rose in Apr>May then fell in Jun>Aug. Both grew Sep/Oct. In November, Food was stable & Supplies fell. The Services segments have also had ups & downs but have generally inflated. The net is a YTD Petflation rate vs 2022 of 8.3%, about double the CPI. In May 22 it was 5.8% below the CPI.

Petflation is slowing, but still strong. Petflation dropped from 5.2% in October to 4.3% in November. This is 64% below the record 12.0% set in November 22, but still the 4th highest rate for the month. The last 6 months have all been <10% but 9 of 16 have been 10+%. The current 4.3% rate is still 2.7 times the 1.6% average rate from 2010>2021 and also 1.4 times the national rate. There is no doubt that the current pricing tsunami is a significant event in the history of the Pet Industry, but will it affect Pet Parents’ spending. In our demographic analysis of the annual Consumer Expenditure Survey which is conducted by the US BLS with help from the Census Bureau we have seen that Pet spending continues to move to higher income groups. However, the impact of inflation varies by segment. Supplies is the most affected as since 2009 many categories have become commoditized which makes them more price sensitive. Super Premium Food has become widespread because the perceived value has grown. Higher prices generally just push people to value shop. Veterinary prices have strongly inflated for years, resulting in a decrease in visit frequency. Spending in the Services segment is the most driven by higher incomes, so inflation is less impactful. This spending behavior of Pet Parents suggests that we should look a little deeper. Inflation is not just a singular event. It is cumulative. Total Pet Prices are up 4.3% from 2022 but they are up 16.9% from 2021 and 21.5% from 2019. That is a huge increase in a very short period. It puts tremendous monetary pressure on Pet Parents to prioritize their expenditures. We know that the needs of their pet children are always a high priority but let’s hope for a little relief – stabilized prices and even deflation. This is not likely in the Service segments, but it has happened before in Products. Pet Food inflation has slowed for 7 straight months, and Supplies prices have deflated in 3 of the last 4 months. It’s just a start. Let’s hope that it accelerates “down”.

In 2022 Americans spent $102.71B on our companion animals, 1.05% of $9.79T in total expenditures. Pet Spending was up $2.73B (+2.7%), much less than the $16.23B in 2021. In 2020 Consumers focused on the necessary segments – Food and Veterinary, including a Food buying binge. The discretionary segments, Supplies and Services, suffered until 2021 when Food $ fell but all other segments had record increases. In 2022, Supplies & Veterinary $ fell but Food spending grew by 12.5% and Services set a new record. This mixed performance produced the small 2.7% lift in Total Pet $.

In this report we will compare Pet Spending in 2022 vs 2021 for the most popular demographic measurement – by Generation. We will also include historical data going back to 2019 when Gen Z first had enough CUs to be recognized as a separate segment. All data comes from the US BLS Consumer Expenditure Survey.

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

GENERATIONS DEFINED

Gen Z: Born after 1996

In 2022, Age 25 or less

Millennials: Born 1981 to 1996

In 2022, Age 26 to 41

Gen X: Born 1965 to 1980

In 2022, Age 42 to 57

Baby Boomers: Born 1946 to 1964

In 2022 Age 58 to 76

Silent/Greatest: Born before 1946

In 2022, Age 77+

• Baby Boomers still have the largest number of CU’s at 43.5M and 32.4% of the total. They had a slight decrease in 2022 and generally have been losing ground. In fact, they have 1.7M fewer CU’s than in 2016.
• The Oldest Generations will continue to lose CUs primarily due to death or movement to permanent care facilities.
• Gen X has the second most CUs and gained a little ground in 2022.
• Millennials have the largest number of individuals, but they rank only third in the number of CU’s.
• Gen Z gained 1.3M CUs as more of these youngsters established independent households.

Now let’s look at some key CU Characteristics (Note: Nationally, there were no changes from 2021.)

# Children: No Changes; CU size: Down for Boomers; # Earners: Millennials & Gen X up, Gen Z down; Homeownership: Up for Gen X & younger; No Mtge: Up for Gen X & Boomers but down for Gen Z & Silent/Greatest.

• CU Size – Nationally, CU size stayed at 2.4. It was 2.5 back in 2020. CUs with 2+ people still account for 69.0% of all U.S. CUs (down from 69.5% in 2021) and 80.8% of pet $ (up from 80.6%) There were fewer 2+ CUs but they spent more on their pets. Millennials and now Gen Z are actively building their households. However, CU size, with all the related responsibilities, still peaks with the Gen Xers and then starts dropping. The Boomers’ CUs fell below 2.0 for the 1^st time but the CU size for all other groups was the same as 2021.
• # Children < 18 – 27.0% of U.S. CU’s have children, down from 27.1% and they generate 32.8% of Pet Spending, up slightly from 31.9%. The slight drop in CUs came from families with an oldest child under 6 and Single Parents. The increase in Total Pet Spending was more balanced. Married couples with an oldest child 6>17 spent $2.58B less. All other CUs, with or without children spent more. The net result was CUs with children spent $1.83B more while those without children only increased spending by $0.90B. Overall and in all generations, there was no change in the # of children per CU. Millennials are still the leader and the only generation to average more than 1 child per CU. Gen X is still #2, followed by Gen Z. Boomers fell from 0.2 to 0.1 in 2020. They should stay above zero for a few more years.
• # Earners – Pet spending is often tied to the number of earners in a CU. In 2022, only No Earner 2+ CUs and Single, 1 Earner CUs spent less on their pets. 2+ earner CUs still spent the most and had the biggest increase, +$2.77B. No Earners are usually older and retired. This includes the oldest Boomers and the Silent/Greatest generations.
• Homeownership – Owning and controlling your own space has always been a major factor in increased Pet Ownership and spending. In 2022 homeownership increased slightly to 65.09% from 64.72%. Gen Z, Millennials & Gen X had increases while the oldest groups were stable. The homeowners’ share of Total Pet Spending grew from 80.0% to 81.2%. The increase happened because Homeowners’ Pet Spending increased $3.46B (+4.3%), while Renters’ fell -$0.73B (-3.6%). We should also note that the percentage of homeowners w/no Mtge was unchanged overall and for Millennials. It grew slightly for Gen X & Boomers, but this was offset by small decreases from Gen Z and the Silent/Greatest generations.
  • As expected, Gen Z are the most common renters in society. Homeownership by Millennials has moved up to 51% but it is still only 78% of the national average.
  • Gen Xers have been above the national avg since 2018 and Homeownership continues to increase with age.

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

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

CU National Avg: Income – $94,003; Total CU Spending – $72,993; Total Pet Spending – $766.20; Pet Share – 1.05%

• Income – The Gen Xers are still at the top, but their lead fell slightly. Compared to the national average, the income of Boomers fell but the Silent/Greatest grew. Millennials’ income beat the national average in 2020 and continues to grow. The income of Gen Z passed that of the oldest Americans in 2021 and as expected, continues to grow.
• Total Spending – The Gen Xers make the most and spend the most but it’s not out of line with their income. The Millennials’ increase was slightly below the national lift but overall, it is still above the national average. Like their income, Boomers’ spending fell even further below the national average. Due to a big lift in spending in relation to income, the oldest group is once again deficit spending in relation to their after tax income. With an 8.7% increase in Income and an 8.3% increase in spending, the retail importance of Millennials continues to grow.
• Pet Spending – Again only 2 groups exceeded the national average and Gen X stayed firmly on top. Millennials are still 3^rd, 24% below Gen X but only 8% below Boomers. The oldest group replaced Gen Z at the bottom.
• Pet Spending Share of Total Spending – The national number fell from 1.12% to 1.05%. The drop was driven by decreases from all groups but Gen Z. In 2020 Boomers were the only group to spend more than 1% of their total expenditures on their pets. In 2021 only Gen Z spent less than 1% of their total expenditures on their pets. In 2022, only Boomers and Gen X are above 1% but Millennials (0.97%) and Gen Z (0.96%) are very close.

Now, let’s look at Total Pet Spending by Generation in terms of market share as well as the actual annual $ spent for 2019 through 2022. The 2022 numbers are boxed in red (decrease) or green (increase) to note the change from 2021.

• Gen X kept the top spot in Pet Spending but they only lead Boomers by $0.43B, 1.3%, down from $0.68B, 2.1% in 21.
• There are a variety of spending patterns. Spending in the oldest group is low and had been slowly falling. It surged in 2021 then fell in 2022. Millennials are the only group with consistent annual growth. Gen X had also been growing every year… until 2020. However, they came back strong and moved to the top in 2021 & 2022. The Boomers have been on a rollercoaster ride because they have a strong reaction to trends and outside influences. In 2020 they were the primary group that panic bought Pet Food. In 2021 their spending fell due to a big drop in Food $. In 2022 it increased but is still below 2020. Interestingly, their pattern is the exact opposite of the oldest generation. Gen Z is just getting started. They’re the smallest group and spend the least but their spending more than doubled in 2022.
• In 2022, only the Silent/Greatest generations spent less. Gen Z & Boomers had the biggest lifts.
  • Silent/Greatest: -$1.46B. Boomers: +1.05B. Gen X: +0.80B. Millennials: +$0.50B. Gen Z: +$1.84B.
• Gen X – Ave CU spent $957.44 (+$15.57); 2022 Total Pet Spending = $34.43B, Up $0.80B (+2.4%)
  • 2019>2022: Up $8.68B Their annual Pet spending growth since 2015 had been strong and consistent until a drop in 2020. In 2021 and 2022 they were #1 in CU Pet spending and Total $. Their spending is up 34% from 2019.
• Boomers – Ave CU spent $791.26 (+$26.58); 2022 Total Pet spending = $34.00B, Up $1.05B (+3.2%)
  • 2019>2022: Up $5.27B; They stayed on the roller coaster as spending turned up but it’s still -2.4% vs 2020.
• Millennials – Ave CU spent $724.99 (+$8.48); 2022 Total Pet Spending = $25.61B, Up $0.50B (+2.0%)
  • 2019>2022: Up $9.18B; As the income and overall spending of Millennials grows, their pet spending has also grown every year. This younger group has the biggest increase in $ since 2019 of any group, $9.18B, +56%.
• Silent + Greatest – Ave CU spent $425.85 (-$62.65); 2022 Total Pet Spending = $5.19B, Down $1.46B (-22.0%)
  • 2019>2022: Down $1.27B; Spending was down, and their CU count continues to fall, -9.5% from 2021 and -28% from 2019.
• Gen Z – Ave CU spent $460.26 (+$188.99); 2022 Total Pet Spending= $3.48B, Up $1.84 (+112.6%)
  • 2019>2022: Up $2.41B; They’re just starting to build H/Hs but they “got on board” in Pet Parenting in 22 as Pet spending doubled.

Gen X held onto the top spot in Total Pet Spending, but all but the Silent/Greatest group spent more. Plus, spending took off for Gen Z. Unfortunately, with 8.9% inflation, all other groups really bought less Pet Products & Services in 2022.

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

• The Silent/Greatest generations had the only decrease. The Boomer rollercoaster turned up again, but the younger groups have had more consistent growth. Gen Z more than doubled their spending in 2022.
• Since 2014, Millennials’ have led the way in food trends, and they are the only group with an annual increase every year since 2016.
• Boomers – Ave CU spent $315.56 (+35.11); 2022 Pet Food spending = $13.32, Up $1.50B (+12.7%)
  • 2019>2022: Up $0.76B They are still #1 in Total Food $. They are below 2020 but finally passed their 2019 $.
• Gen X – Ave CU spent $367.21 (+$60.94); 2022 Pet Food spending = $13.08B, Up $1.96B (+17.6%)
  • 2019>2022: Up $3.05B They reacted to the FDA warning by further upgrading their food. No pandemic panic buying. They value shopped. In 2021 and 2022 they spent more and became the leader in CU Pet Food Spending.
• Millennials – Ave CU spent $243.54 (+$37.42); 2022 Pet Food Spending = $8.80B, Up $1.56B (+21.6%)
  • 2019>2022: Up $3.01B They are the only group with increased spending every year since 2016. Their income is growing as is a commitment to their pets. They often pioneer food upgrades and the pandemic had little impact.
• Silent/Greatest – Ave CU spent $154.12 (-$107.88); 2022 Pet Food spending = $1.88B, Down $1.73B (-47.9%)
  • 2019>2022: Down $0.60B; CU count is falling, and high prices may have caused them to downgrade their food.
• Gen Z – Ave CU spent $206.03 (+$101.59); 2022 Pet Food spending = $1.62B, Up $0.99B (+158.6%)
  • 2019>2022: Up $1.28B; Pets moved up in importance to these youngsters. Pet Food spending more than doubled

Pet Food Spending is driven by trends and outside influences like FDA warnings and COVID. 2022 was a more normal year. Even with 10.2% inflation, all but Silent/Greatest spent more $ and bought more food.  Now, Supplies Spending.

• Only Gen X spent less but they kept their position at the top of Pet Supplies spending. Supplies spending used to be more skewed towards the younger groups. It has become more balanced. The oldest and youngest generations essentially have the same share and there is a difference of less than 10% in the $ of the 3 biggest spenders.
• Gen X – Ave CU spent $194.64 (-$70.79); 2022 Pet Supplies spending = $7.04B, Down $2.36B (-25.1%)
  • 2016>2021: Up $1.57B; Gen Xers are again the leader in Supplies spending. They were affected by tarifflation in 2019 but held their ground in 2020. In 2021 spending exploded, +71% so the drop in 2022 was not unexpected.
• Baby Boomers – Ave CU spent $156.31 (+$2.28); 2022 Pet Supplies spending = $6.79B, Up $0.08B (+1.1%)
  • 2019>2022: Up $0.89B In 2020 they focused on Food! In 2021 they made it back to 2018 $ and then had a small lift in 2022.
• Millennials – Ave CU spent $181.77 (+$1.40); 2022 Pet Supplies spending = $6.35B, Up $0.03B (+0.5%)
  • 2019>2022: Up $2.43B; Millennials earn their share of Supplies $. They were the least impacted by the tariffs in 2019 and spent more in 2020. Their spending then took off in 2021, with a 53% increase. It stayed there in 2022.
• Silent + Greatest – Ave CU spent $72.64 (+$8.37); 2022 Pet Supplies spending = $0.89B, Up $0.02B (+2.3%)
  • 2016>2021: Down $0.21B; They’re losing CUs & were hit hard by COVID & inflation but had small lifts in 21 & 22.
• Gen Z – Ave CU spent $119.05 (+$36.10); 2022 Pet Supplies spending = $0.87B, Up $0.37B (+73.4%)
  • 2019>2022: Up $0.45B; With a huge increase in Food, their big lift in Supplies is not surprising, Pets need both.

In 2019, tarifflation drove spending down in all groups. In 2020 Millennials and Gen X spent a little more while the older groups spent a lot less. In 2021 spending took off in all groups. In 2022, only Gen X spent less, -$2.36B. However, considering 7.7% inflation, only Gen Z really bought more Supplies.

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

• All groups spent more. Baby Boomers had the biggest increase and became #1 in Services $.
• Baby Boomers – Ave CU spent $95.56 (+$25.50); 2022 Pet Services spending = $4.15B, Up $1.10B (+35.9%)
  • 2019>2022: Up $1.37B; The biggest $ drop in 2020 and the biggest lifts in 2021 & 2022. They moved to the top.
• Gen X – Ave CU spent $110.26 (+$18.62); 2022 Pet Services spending = $3.99B, Up $0.74B (+22.9%)
  • 2019>2022: Up $0.95B; In 2020 they had a big drop. In 2021 and 2022 they had the 2^nd biggest lifts but fell to #2 in 2022.
• Millennials – Ave CU spent $95.50 (+$28.89); 2022 Pet Services spending = $3.34B, Up $1.00B (+43.0%)
  • 2019>2022: Up $1.54B; In 2020 they had the smallest decrease of any group and with the 2021 & 2022 lifts, they are now 86% ahead of their 2019 spending.
• Silent + Greatest – Ave CU spent $50.25 (+$23.96); 2022 Pet Services spending = $0.61B, Up $0.26B (+73.1%)
  • 2016>2021: Down $0.34B; They definitely have the need. In 2022, they found the money. Spending was +73%.
• Gen Z – Ave CU spent $37.35 (+$18.82); 2022 Pet Services spending = $0.27B, Up $0.16B (+143.5%)
  • 2019>2022: Up $0.21B; They still have the smallest share of the $ but their spending more than doubled in 2022.

This segment had slow annual growth until 2017 which saw a small drop in spending due to an extremely competitive environment. In 2018, the increased number of outlets really hit home, and spending exploded. 2019 brought another small decrease as Gen Xers & Millennials looked for and found a better deal. 2020 brought pandemic restrictions and closures. Fueled by the Big 3, 2021 produced a record lift which they exceeded in 2022. However, Boomers are now #1.

Now, Veterinary Services

• Gen X & Gen Z had the only increases and Gen X moved to the top in both CU spending and total $.
• Except for the 2022 drop by Millennials, the younger groups have had a growing commitment to this Pet Parenting responsibility. The combined Veterinary $ of Millennials, Gen Z & Gen Xers is up 47% from 2019 but 95% from 2017.
• Gen X – Ave CU spent $285.33 (+$6.80); 2022 Veterinary spending= $10.32B, Up $0.46B (+4.6%)
  • 2019>2022: Up $3.11B; They have been at the top of CU Veterinary spending since 2018. They are the only group with an annual increase in Veterinary $ every year since 2019 and in 2022 they moved to the top in Total $.
• Boomers – Ave CU spent $223.83 (-$36.31); 2022 Veterinary spending= $9.73B, Down $1.62B (-14.3%)
  • 2016>2021: Up $2.25B; In 2020, Boomers focused on Food & Veterinary. In 2021 they had a big drop in Food but a big lift in Veterinary. They have been the perennial leader in Vet $ until the big drop in 2022 pushed them down to #2.
• Millennials – Ave CU spent $204.18 (-$59.23); 2022 Veterinary Spending $7.13B, Down $2.10B (-22.7%)
  • 2019>2022: Up $2.21B; They had the biggest lift in 21 and the biggest drop in 22 but Veterinary is still a priority.
• Silent + Greatest – Ave CU spent $148.84 (+$12.90); 2022 Veterinary spending $1.81B, Down $0.02B (-0.9%)
  • 2016>2021: Down $0.12B; Their pets’ health is still a priority. Spending fell only because of a decrease in CUs.
• Gen Z – Ave CU spent $97.84 (+$32.49); 2022 Veterinary spending = $0.72B, Up $0.32B (+80.9%)
  • 2019>2022: Up $0.47B; Their growing commitment to Pets includes Vet Services as spending rose over 80%.

Veterinary spending continues to be important to the 3 younger groups. Gen X moved to the top in $ and along with Gen Z, had the only increases. However, with 8.8% inflation, Vet spending really fell 16.4% and only Gen Z bought more.

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

• Gen X Performance – Total: 124.2%; Food: 125.3%; Supplies: 118.9%; Services: 119.6%; Veterinary: 128.8%
  • Gen Xers returned to the top spot in performance. They again earned their share in Total Pet and all industry segments. Except for the 2020 dip they increased their Total Pet Spending every year since 2016. In 2021 they had a big increase in every segment. In 2022 they had some spending dips but an overall increase as they stayed on top in Total Pet $. They are the performance leader in every segment. Gen Xers range in age from 42>57 so only the oldest are in their peak earning years. Expect their commitment and pet spending to continue to grow.
• Baby Boomers Performance – Total: 102.1%; Food: 106.2%; Supplies: 95.5%; Services: 103.6%; Veterinary: 101.0%
  • Boomers led the way in building the industry but are no longer the “top dogs” in $. They earn their share in all but Supplies and are still the spending leader in Food & Services. They are also the most emotional Pet Parents, so their spending is subject to radical swings like 2020’s panic, binge buying of Pet Food. They should still be a major force in the Pet Industry for many more years, but the Gen Xers have now stepped up and the Millennials are also preparing to eventually take their turn at the top.
• Millennials Performance – Total: 95.7%; Food: 87.3%; Supplies: 111.1%; Services: 103.6%; Veterinary: 92.1%
  • Millennials are now the only group to have increased their pet spending every year since 2016. Their spending is more evenly balanced, and their performance is stable at 95+% but their future as the Pet Parenting spending leaders is still a long way off. Their income, home ownership and pet spending are all increasing. They are educated and well connected. Indications are that they may lead the way in adopting new trends, especially in food. Their progress is good news, but in reality, their leadership is probably at least a decade away.
• Gen Z Performance – Total: 62.0%; Food: 76.6%; Supplies: 72.8%; Services: 40.5%; Veterinary: 44.2%
  • They are just beginning so the numbers are low, but a strong year moved them past the oldest group.
• Silent/Greatest Performance – Total: 55.6%; Food: 53.5%; Supplies: 44.4%; Services: 54.5%; Veterinary: 67.2%
  • Pet Parenting is more challenging in old age. Their overall performance fell from 66.1% in 2021 to 55.6% in 2022.

Baby Boomers are still the heart of the industry, but Gen Xers are the $ leaders. Expect Gen X’s growth to continue as they are pursued by Millennials. Both groups seem ready, willing and able to take their turn at the top. Pet Spending has become more balanced across the generations. This bodes well for the continued strong growth of the industry.

In 2022 Total Pet Spending in the U.S. was $102.71B, a $2.73B (2.7%) increase from 2021. Spending fell in Veterinary and Supplies as the record 2021 binges were not repeated. However, Pet Food returned to a more normal pattern with a 12.5% increase and Services spending continued to surge with another record lift. Together this produced a small increase in Total Pet $. Another factor also affected spending in 2022 – high inflation in all segments.

• A $4.29B (+12.5%) increase in Food
• A $1.86B (-7.8%) decrease in Supplies
• A $2.95B (-9.0%) decrease in Veterinary
• A $3.26B (+35.8%) increase in Services

Let’s see how these numbers blend together at the household (CU) level. Weekly, 25.3 million CU’s (1/5) spent $ on their Pets – food, supplies, services, veterinary or any combination – up from 24.4MM in 2021 but still below 27.1MM in 2019.

In 2022, the average U.S. CU (pet & non-pet) spent a total of $766.20 on their Pets. This was a +2.3% increase from the $748.93 spent in 2021. However, this doesn’t “add up” to a 2.7% increase in Total Pet Spending. With additional data provided from the US BLS, here is what happened.

• 0.4% more CU’s
• Spent 0.5% less $
• 2.8% more often

If 68% of U.S. CU’s are pet parents, then their annual CU Total Pet Spending was $1126.76. 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>2022 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, Pet Parents 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.

Now we’ll look at some Demographics. First, 2022 Total Pet Spending by Income Group

Only the $30>70K & $100>149K income groups spent more but all of the big groups, <$70> & <$100k> had increases.

Nationally: · Total Pet: ↑$2.73B   · Food: ↑$4.29B  · Supplies: ↓$1.86B  · Services: ↑$3.26B  · Veterinary: ↓$2.95B

• < $70K – (52.7% of U.S. CUs); CU Pet Spending: $472.48, +9.9%; Total $: $33.35B, ↑$1.59B (+5.0%) from…
  • Food ↑$2.60B       Supplies ↓$1.16B       Services ↑$0.46B       Vet ↓$0.30B
  • Money matters a lot to this group. In the pandemic they focused on Pet needs. In 2021 they spent less on food but more in all other segments. In 2022, their segment spending matched the national pattern and their $ grew 5.0%
• >$70K – (47.3% of U.S. CUs); CU Pet Spending: $1093.30, -4.4%; Total $: $69.36B, ↑$1.15B (+1.7%) from…
  • Food ↑$1.69B       Supplies ↓$0.70B       Services ↑$2.81B       Vet ↓$2.65B
  • This group continues to grow in size, up 6.0% in 2022, but they only produced 42% of the spending increase. Only $100>150K spent more. They also matched the national pattern but accounted for 90% of the drop in Veterinary.
• < $30K – (23.8% of U.S. CUs); CU Pet Spending: $349.31, +4.0%; Total $: $10.84B, ↓$0.41B (-3.7%) from…
  • Food ↑$0.08B       Supplies ↓$0.59B       Services ↑$0.23B       Vet ↓$0.13B
  • This lowest income group still has relatively stable spending but they remain committed to their pets. They also only spent less in Supplies & Veterinary but their lift in Food was so small that their Total $ fell -3.7%.
• $30>$70K – (28.9% of CUs); CU Pet Spending: $569.03, +11.8%; Total $: $22.51B, ↑$2.00B (+9.8%) from…
  • Food ↑$2.52B       Supplies ↓$0.57B       Services ↑$0.22B       Vet ↓$0.17B
  • Another National Pattern match. However, they had the biggest lncrease in Food and the 2^nd largest in Total Pet.
• $70>$99K – (14.1% of CUs); CU Pet Spending: $766.36, -3.6%; Tot $: $14.58B, ↓$1.16B (-7.3%) from…
  • Food ↓$0.40B       Supplies ↑$0.08B       Services ↑$0.63B       Vet ↓$1.47B
  • This mid-income group is very price sensitive. They had the biggest drop in Veterinary and the only drop in Food.
• $100K>$149K– (15.5% of CUs); CU Pet Spend: $1013.24, +3.6%; Tot $: $20.99B, ↑$2.49B (+13.4%) from…
  • Food ↑$1.25B       Supplies ↑$0.61B       Services ↑$0.69B       Vet ↓$0.06B
  • After years of stability they became reactive and they have the money to take action. 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”. They had a small drop in Veterinary but big increases in the other segments. This generated the biggest increase in Total Pet $ for any income segment.
• $150K> – (17.7% of CUs); CU Pet Spending: $1424.79, -12.1%; Total $: $33.79B, ↓$0.18B (-0.5%) from…
  • Food ↑$0.83B       Supplies ↓$1.39B       Services ↑$1.49B       Vet ↓$1.11B
  • This group consists of 2 segments, $150>199K and $200K>. In 2021 both groups had double digit increases in all segments and they generated 87% of the Total Industry’s Record Increase. 2022 was different. The $150>199K group had a small increase in Food and big lifts in Supplies & Services but were down -$1.5B in Veterinary. Net: +$0.23B. The $200K> group had a huge increae in Services and strong lifts in Food & Veterinary but a -$2.68B drop in Supplies. Net: -$0.41B. High incomes can have different behaviors but together they do 32.9% of Pet $.
• < $100K – (66.8% of CUs); CU Pet Spending: $534.79, +5.4%; Total $: $47.93B, ↑$0.43B (+0.9%) from…
  • Food ↑$2.20B       Supplies ↓$1.08B       Services ↑$1.09B       Vet ↓$1.77B
  • A spending sandwich, with the “meat” in the middle  <40K: -$0.54B; $40>69K: +$2.13B; $70>99K: -$1.16B
• >$100K – (33.2% of CUs); CU Pet Spending: $1232.94, -6.3%; Total $: $54.78, ↑$2.30B (+4.4%) from…
  • Food ↑$2.09B       Supplies ↓$1.78B       Services ↑$2.17B       Vet ↓$1.18B
  • The $100K> group exceeded 50% of Pet $ for the 1^st time in 2020. Their lead is growing as they now do 53.3%.

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. This produced a small, 2.7% increase in Total Pet $. However, a big lift by the $100>149K segment pushed the spending divide up slightly to $108K. Income continues to grow in importance in Total Pet Spending.

Next let’s look at 2022 Total Pet Spending by Age Group

The 25>44 and 75> yr-old groups spent less while all others spent more. The 45>54 group had the biggest increase.

Nationally: · Total Pet: ↑$2.73B   · Food: ↑$4.29B  · Supplies: ↓$1.86B  · Services: ↑$3.26B  · Veterinary: ↓$2.95B

• <25 – (4.7% of U.S. CUs); CU Pet Spending: $386.78, +43.4%; Total $: $2.56B, ↑$0.77B (+42.8%) from…
  • Food ↑$0.72B       Supplies ↑$0.11B       Services ↓$0.02B       Vet ↓$0.04B
  • Many consolidated into bigger CUs and some got married but their Pets were included. Plus, more pets were added which generated a huge lift in Food. Overall, 5.1% fewer CUs spent 55.9% more $, 3.6% less often.
• 25-34 – (15.6% of U.S. CUs); CU Pet Spending: $687.59, -1.9%; Total $: $14.48B, ↓$0.42B (-2.8%) from…
  • Food ↓$0.11B       Supplies ↓$0.06B       Services ↑$0.54B       Vet ↓$0.80B
  • In 2021 these Millennials had a 20% increase with a big lift in all segments. In 2022 they dialed back their spending in all but Services, with a big drop in Veterinary as 0.6% fewer CUs spent 3.6% less $, but 1.4% more often.
• 35-44 – (17.0% of CUs); CU Pet Spending: $822.61, -12.3%; Total $: $19.05B, ↓$2.34B (-10.9%) from…
• • Food ↑$1.56B       Supplies ↓$2.81B       Services ↑$0.36B       Vet ↓$1.45B
  • 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 they matched the national pattern with big changes in every segment. 0.5% fewer CUs spent 12.3% less $, but 2.0% more often. They fell to #3 in Pet spending.
• 45-54 – (16.9% of U.S. CUs); CU Pet Spending: $967.31, +16.8%; Total $: $21.80B, ↑$3.29B (+17.8%) from…
  • Food ↑$1.29B       Supplies ↑$0.42B       Services ↑$0.78B       Vet ↑$0.80B
  • They have the highest income and were #1 in Pet Spending in 2018. In 2019 & 2020 their spending and rank fell. In 2021, their spending started to grow. In 2022 they were the only group with an increase in all segments. They are #1 in CU spending but 2^nd in $ because of fewer CUs. 1.8% more CUs spent 12.7% more $, 2.6% more often.
• 55-64 – (18.2% of U.S. CUs); CU Pet Spending: $905.56, +6.6%; Total $: $21.94B, ↑$0.99B (+4.7%) from…
  • Food ↑$1.86B       Supplies ↑$0.18B       Services ↑$0.46B       Vet ↓$1.51B
  • 80% are still younger Baby Boomers and they are very reactive. They were the drivers behind the 2020 binge and 2021 drop in Pet Food. Except for a big rollback in Veterinary their spending returned to a more normal pattern. 1.3% fewer CUs spent 3.0% less $, but 9.3% more often and they returned to the top in Total Pet $.
• 65-74 – (16.2% of U.S. CUs); CU Pet Spending: $765.42, +7.6%; Total $: $16.44B, ↑$1.30B (+8.6%) from…
  • Food ↑$0.51B       Supplies ↑$0.09B       Services ↑$0.83B       Vet ↓$0.14B
  • This group is growing and are 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>2022. In 2022 they increased spending in all but Veterinary as 1.2% more CUs spent 5.3% more $, 1.9% more often
• 75> – (11.4% of U.S. CUs); CU Pet Spending: $429.29, -14.9%; Total $: $6.45B, ↓$0.84B (-11.5%) from…
  • Food ↓$1.53B       Supplies ↑$0.21B       Services ↑$0.30B       Vet ↑$0.18B
  • 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 spending fell, and the drop was substantial. In response to skyrocketing inflation many CUs may have even downgraded their Pet Food. 4.9% more CUs spent 11.4% less $, 4.9% less often.

Age Group Recap: In 2022 Total Pet Spending definitely skewed away from the younger groups to the older 45>74 groups.  However, it was still driven by the 3 highest income groups from 35 to 64.

Next, we’ll take a look at some other key demographic “movers” in 2022 Total Pet Spending. The segments that are outlined in black “flipped” from 1^st to last or vice versa from 2021. The red outline stayed the same.

In 2022, 69 of 96 Demographic Segments (72%) spent more on their Pets, a big drop from 83% in 2021. Although they were different, both years had 1 category where all segments spent more. However, there was less turmoil in 2022 as 3 segments held their spot and only 10 of the 24 segments flipped from 1^st to last or vice versa. In 2021 there were 16 flips. In 2022 the flips were evenly divided between 1^st and last. Last year most were to last because of big drops in Food $ from the 2020 binge. In 2022 most of the biggest lifts weren’t significantly larger than the biggest drops, an indication of more balanced spending. We should also note the stability in the Area category. Both the winner and loser held their position and Rural “lost” with an $0.81B increase, less than 20% below the winner. As noted earlier, both 2021 & 2022 had 1 category in which all segments spent more – In 2022 it was Area Type; In 2021 it was # of Earners.

Let’s look at some specifics.

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

• 45>54    • Mgrs & Prof.    • Married, Child 18>    • $100>149K    • Suburbs 2500>    • White, Not Hisp.    • Midwest

3 winners are surprising:

• < College Grads    • Gen Z     • Homeowners w/o Mtge

Among the losers, 5 often find themselves in this position:

• Retirees    • No Earner, 2+ CUs     •Hispanics     •Born <1946     •Renters

All of the “usual” losers have low incomes. There were 4 surprises:

• College Grads     • West     • 35>44 yr-olds     • <2500 Population, aka “Rural” (despite a $0.8B spending increase)

All but Rural have a high income. However, Rural is a big Pet spender, with over $1000 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 in the 1^st half of the year. The Food binge ended in 2021 and Food $ fell as Pets “ate up” the overstock. 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 and spending grew by 57%. 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, $ were up 32%. Together, this produced a record $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 $4.29B Food lift didn’t make up for the combined $4.81B drop in Veterinary & Supplies. Without the record $3.26B increase in Services, Pet spending would have been down -$0.53B in 2022. This mixture produced a small $2.73B (+2.7%) lift in 2022. However, if you consider 8.9% Petflation in 2022, the amount of Pet Products & Services sold in 2022 was really down 5.7%. Spending skewed towards older groups but became more balanced among the 3 groups with the highest incomes. The 50/50 spending divide moved up a little in Total Pet. However, the impact of inflation was largely hidden. Petflation started slowing in July 23, but in September the 2023 YTD rate was still +9.1% vs 2022 and +17.9% vs 2021. We’ll see what happens.

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 strong recovery. Spending grew $2.21B in 2021, then $3.26B (+35.8%) in 2022 to $12.36B. In this report we will drill down into the data to see what groups drove the record lift in 2022. (Note: All numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Surveys)

Services’ Spending per CU in 2022 was $92.21, up 35.3% from $68.13 in 2021. Note: A 2022 Pet CU (68%) Spent $135.60

More specifically, the 35.8% increase in Total Pet Services spending came as a result of:

• 0.4% more CUs
• Spending 17.7% more $
• 15.0% 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 of Services 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 the recovery began and accelerated through 2022 despite inflation rates of 4.9% in 2021 & 6.3% in 2022. Now, let’s look at some specific demographics of 2022 Services spending.

First, by Income Group.

Like 2018 & 2021 all groups spent more in 2022. However, the biggest lifts came from higher incomes. The <$70K groups had smaller $ increases but were up double digits in percentage growth. The 2022 50/50 dividing line in $ for Services was $134K. That is up minimally from $133K last year but 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 (23.8% of CU’s) – $31.28 per CU (+39.2%) – $1.00B, Up $0.23B (+30.3%) – This segment is shrinking and money is tight, so Services spending is less of an option. However, many chose it in 2022 as spending grew 30% to $1B.
• $30>70K (28.9% of CU’s); $45.15 per CU (+17.2%); $1.75B, Up $0.22B (+14.6%) – In 2020, they had the only increase and finished 2nd in $. In 2022 they are down to 3^rd but they are the only group to spend more in 2020, 2021 & 2022.
• $70>100K (14.1% of CU’s) – $88.53 per CU (+68.3%) – $1.68B, Up $0.63B (+60.9%) – The spending of this middle income group slowly but consistently grew 2016>19. Then it plummeted in 2020, even falling below 2016. They rebounded somewhat in 2021 but then spending took off in 2022, +60.9%, the highest % lift of any group.
• $100>150K (15.5% of CU’s) – $122.47 per CU (+25.1%) – $2.54B, Up $0.69B (+37.1%) – They had consistent growth from 2016>19. In 2020 they had the biggest drop, -40%. They came back strong in 2021 & 2022 to reach $2.5B.
• $150K> (17.7% of CU’s) – $227.73 per CU (+22.8%) – $5.39B, Up $1.49B (+38.0%) – They moved steadily down after peaking in 2018. Then Spending took off in 21/22. Their CU Services spending is now 2.5 times the national average.

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

All age groups but <25 spent more on Services in 2022. The biggest lifts came from 65>74 & 45>54. 55>64 held onto the top spot, but you can see that spending share has become more balanced from 35 to 64. Here are the specifics:

• 75> (11.4% of CU’s) – $49.91 per CU (+57.1%) – $0.76B – Up $0.30B (+64.9%) 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 spending surged with a big increase in frequency. In 2022 $ were up 65% as 4.9% more CU’s spent 23.8% more $, 27.0% more often.
• 65>74 (16.2% of CU’s) – $101.08 per CU (+59.3%) – $2.20B – Up $0.83B (+61.1%). This group is very value conscious and growing in numbers. From 2017 to 2019 their spending was stable. In 2020 it fell 20%. In 2021 they came back strong but in 2022 they had the biggest $ increase as 1.2% more CU’s spent 48.7% more $, 7.1% more often.
• 55>64 (18.2% of CU’s) $104.30 per CU (+23.8%) – $2.55B – Up $0.46B (+22.2%) 2017>2019 they slowly increased Services spending. A big drop in frequency drove spending down in 2020 but they had a strong recovery and took the top spot in Pet Services $ in 2021. They held on in 2022 as 1.3% less CUs spent 6.9% more $, 15.8% more often.
• 45>54 (16.9% of CU’s)- $108.46 per CU (+43.5%) – $2.46B – Up $0.78B (+46.2%) This highest income group was #1 in Services $ in 2019 and held on in 2020 despite a 20% drop in frequency. In 2021 they increased frequency but had the only $ drop and fell to #3. In 2022 1.8% more CU’s spent 14.2% more $, 25.7% more often. They are now #2.
• 35>44 (17.0% of CU’s) – $105.54 per CU (+18.2%) – $2.41B – Up $0.36B (+17.6%) A $1B increase in 2018 pushed them to #1. In 2019 and 2020 spending fell. In 2021 they had the largest increase and moved up to #2 in Services $. In 2022 $ grew 17.6% as 0.5% less CU’s spent 7.9% more $, 8.4% more often. They fell to #3 but just 5.5% below #1
• 25>34 (15.6% of CU’s) – $87.27 per CU (+43.4%) – $1.82B – Up $0.54B (+42.6%) This group of Millennials “found” the Services segment in 2018. Their spending slowly fell in 2019 & 2020 but reached a record high in 2021 due solely to a big increase in frequency. In 2022 their $ surged +42.6% as 0.6% less CU’s spent 29.2% more $, 11.0% more often.
• <25 (4.7% of CU’s) – $26.49 per CU (-3.5%) – $0.17B – Down $0.02B (-8.4%) After 2018 spending fell and stabilized. In 2022 they had the only drop in spending. It was small as 5.1% less CU’s spent 19.8% less $, 20.3% more often.

In 2020, 62% of the $1.7B decrease in Services $ came from the 55> groups. In 2021, only 45>54 yr-olds spent less and the biggest increase was from the 35>44 group. In 2022, only <25 spent less. 65>74 & 45>54 had the biggest lifts. However, Services spending became more balanced as all CUs from 35>74 spent 10>18% more than the average CU.

Finally, here are some key demographic “movers” that drove the big lift in Pet Services Spending in 2022. The segments that are outlined in black “flipped” from 1^st to last or vice versa from 2021. A red outline stayed the same.

You see the stability in 2022 as 13 segments held their position and there were no flips. In all of our years of analysis, we have never seen this level of stability in any industry segment. Also, 9 categories had no segments that spent less on Services. In fact, 89 of 96 segments (93%) spent more on Services. This beat the previous best of 90% in 2021 and was a big change from 2020 when 79% spent less. In fact, only 2 segments spent less in 2022 than in 2020 – $30>39K & HS Grads and the drop by $30>39K was solely due to significantly fewer CUs. The recovery has been strong and truly widespread.

You see from the graph that the winners’ changes were all substantially larger than the losers’. This speaks to the strength and widespread nature of the lift in $ in the segments. We should also note that regardless of Race/Ethnicity, housing arrangements, the number of people or makeup of your household, your occupation or work status, the region of the country or type of area that you lived in, you spent more on Pet Services. That’s a pretty all-encompassing lift.

10 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. 8 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 65>74 yr olds. High need, but low income – But now all Boomers.

Almost all of the losers are not unexpected. Once again, if we look at income, 8 of 12 are at or near the bottom in income in their category. 3 are definitely not – Asians & the Northeast have the highest income in their category and 5+ CUs are 2^nd. Asians are not a surprise loser. Apparently, cultural differences cause them to spend less on their Pets than other Racial/Ethnic groups. Center City has the lowest income but is still somewhat of a surprise. Services spending tends to skew towards more populated areas. They also “lost” despite a 27.4% increase in $.

With 93% of demographic segments spending more on Services from 2021 and 99% from 2020, the recovery was strong and almost universal. There are no truly unique patterns, but one trend should be noted. Income continues to be the most important factor in Services spending. The 50/50 income dividing line in Services spending is now up to $134,000. That is 43% more than the average CU income and 80% more than the median income. $134K> is 23% of all CUs but accounts for 50% of Services $ and 52% of the $3.26B lift from 2021, but 60% of the $5.5B 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 brought a strong recovery with the biggest increase in history. The segments that were hit the hardest by the pandemic generally had the strongest recovery. However, the recovery had a widespread demographic reach. In 2022 the “recovery” accelerated with a new record increase of $3.26B to $12.36. The lift was largely driven by the same groups as 2021 but 93% of all segments spent more. With the humanization of our pets, Pet Services have become more important to Pet Parents and the Pet Industry. For Pet Stores, offering Services provides a key point of differentiation and a reason to shop in their store. You can’t get your dog groomed on the internet. Like other segments, Services had strong inflation in 2022. This had a minimal impact on this segment as both transaction size and frequency increased.

Total Pet spending grew to $102.71B in 2022, up $2.73B (+2.7%) from 2021. After a record $8.75B (+57%) increase in 2021 the Supplies segment fell $1.86B, (-7.8%) to $21.94B in 2022. (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>2020 due to Tarifflation and the Pandemic. In 2021, Pet Parents caught up with their needs. 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. We’ll drill down into the data to determine what and who was behind the drop in Spending.

In 2022, the average household spent $163.64 on Supplies, down 8.2% from $178.20 in 2021. (Note: A 2022 Pet CU (68%) Spent $240.65) This doesn’t exactly match the -7.8% total $ decrease. Here are the specific details:

• 0.4% more CU’s
• Spent 10.0% less $
• 2.1% 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 because of Tarifflation and the Pandemic. It was the greatest lift in history, but 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. Consumers just spent less per transaction. This was not a surprise after the buying binge in 2021.

That gives us an overview of the recent spending history. Now let’s look at some specifics regarding the “who” behind the 2022 drop. First, we’ll look at spending by income level, the most influential demographic in Pet Spending.

National: $163.64 per CU (-8.2%) – $21.94B – Down $1.86B (-7.8%).

Only the $70>100K & $100>$150K income groups spent more but the 50/50 $ divide stayed the same at $114K.

• <$30K (23.8% of CUs)- $63.42 per CU (-17.4%); $2.02B– Down $0.59B (-22.7%). This group is very price sensitive, so they had the biggest percentage decrease and spending fell to the pre-pandemic 2019 level.
• $30K>70K (28.9% of CUs)- $111.91 per CU (-9.6%); $4.34B – Down $0.57 (-11.6%). 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. Amazingly enough, until 2019 they were the leader in Total Supplies $. Now, they rank 3^rd.
• $70>$100K (14.1% of CUs) – $172.08 per CU (+7.3%); $3.26B – Up $0.08B (+2.6%). This middle-income group had consistent spending. 2020 hit them hard but they rebounded strong in 21 and spending even grew slightly in 22.
• $100K>$150K (15.5% of CUs) – $238.62 per CU (+4.0%); $4.96B – Up $0.61B (+14.0%). This high income group had the 2^nd biggest COVID drop. In 21 they had the 2^nd strongest recovery. In 22, they had the only significant increase.
• $150K> (17.7% of CUs) – $310.84 per CU (-25.2%); $7.36B – Down $1.39B (-15.9%). This highest income group had the biggest $ drop, which is not surprising after a $4.6B lift in 2021. They still remain the Supplies spending leader. BTW, the $150>200K group actually spent $1.3B more on Supplies in 2022 while $200K> spent $2.7B less.

All groups $70K>199K spent more. The drop came in the 2^nd half because it was impossible to repeat the $6.4B lift in 2021.

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

National: $163.64 per CU (-8.2%) – $21.94B – Down $1.86B (-7.8%)

It’s simple. Under 25 and over 45 spent a little more. 25>44 spent less, especially the 35>44 yr-olds.

• 55>64 (18.2% of CUs) $190.04 /CU (+5.4%); $4.64B – Up $0.18B (+4.1%). Tarriflation caused a spending drop in 2019. Spending fell again in 2020 as they binge bought pet food. They had a strong recovery in 2021 and slowly grew in 2022 as 1.3% less CUs spent 3.1% more on Supplies, 2.3% more often.   They are back in the #1 spot.
• 45>54 (16.9% of CUs) $201.44 per CU (+8.0%); $4.57B – Up $0.42B (+10.0%). From 2007>2018 this highest income group was the leader in Supplies spending. They came back from the pandemic drop with growth in 21 and again in 22 as 1.8% more CUs spent 1.8% less, 10.0% more often. They were #1 in 2020 but are now #2.
• 35>44 (17.0% of CUs) $190.89 per CU (-38.9%); $4.35B – Down $2.81B (-39.2%) They are 2nd in income and expenditures. Strong inflation drove their $ down in 2019 but the Pandemic had little impact. Spending took off in 2021 but plummeted in 2022 as 0.5% less CUs spent 40.5% less $, 2.7% more often. They fell from #1 to #3.
• 25<34 (15.6% of CUs) $175.18 per CU (-1.0%); $3.66B – Down $0.06B (-1.6%). 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 as 0.6% less CUs spent 0.2% more $, 1.2% less often.
• 65>74 (16.2% of CU’s) $132.82 per CU (+1.9%); $2.89B – Up $0.09B (+3.1%). 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 25>34 yr-olds, their spending grew in 2022 as 1.2% more CUs spent 0.1% less $, 2.1% more often.
• 75> (11.4% of CU’s) $77.89 per CU (+16.0%); $1.19B – Up $0.21B (+21.8%). This low-income group is price sensitive but they are committed to their pets. Their spending was severely impacted by the Pandemic, but they had a strong recovery in 2021 and now 2022 as 4.9% more CU’s spent 20.5% more, 3.7% less often.
• <25 (4.7% of CUs) $101.89 per CU (+27.2%); $0.64B – Up $0.11B (+20.7%). Many formed CUs with other young adults or got married, but most made Pets a priority. In 2022 5.1% less CUs spent 46.4% more $, 13.1% less often.

The 25>44 2021 binge buyers didn’t repeat in 2022. All other groups spent a little more in 2022.

Next, let’s take a look at some other key demographic “movers” in 2022 Pet Supplies Spending. The segments that are outlined in black “flipped” from 1^st to last or vice versa from 2020. The red outline stayed the same.

In 2021, 97% of all segments spent more and in 9 categories all segments had increases. In 2022, despite the decrease, 52% of segments still spent more. 15 of 24 segments flipped from 1^st to last or vice versa. Only 1 segment held its spot. 5 flipped from last to 1^st but 10 flipped from 1^st to last. The 2021 binge buy was clearly not repeated.

Only 3 of the winners are the “usual suspects”

• $150>199K
• Mgrs & Professionals
• 45>54 yr-olds

The other 9 are all somewhat surprising.

In the losers group, only 2 – Tech, Sls, Clerical and 5+ are not surprises. The others are and all 10 flipped from 1^st to last.

The 2021 $8.65B increase in Supplies $ was the biggest in history. This was a binge buy as Pet Parents purchased all of the needed Supplies that they had put off buying during the pandemic. Like the 2020 panic binge buy in Pet Food, there was no need for it to be repeated so spending fell in the following year. The drops in both segments were relatively small compared to the binge lifts. Supplies fell $1.86B (-7.8%) in 2022 but there were still many positives as 52% of all demographic segments spent more on Supplies than they had in 2021. There is another factor to be considered to put 2022 Supplies spending in a better perspective. Many Supplies categories have been commoditized, so the segment is very susceptible to price changes. Prices rose in 2018/19 and spending fell -$4.6B. Prices fell 2016>18 and spending grew by $5B. In 2022 the inflation rate was 7.7%. That means that the drop in the amount of Supplies purchased in 2022 was really -14.4%. That’s almost double the actual $ drop. Plus, all segments with an increase below 7.7% bought less.