Information by segment as defined by USBLS

2022 Total Pet Spending was $102.71B – Where did it come from…?

Total Pet Spending in the U.S. was $102.71B in 2021, a $2.73B (2.7%) increase from 2021. These figures and others in this report are calculated from data in the annual Consumer Expenditure Survey conducted by the US BLS. 2021 was tumultuous but it was almost all positive. The Food binge couldn’t be repeated so Food $ fell slightly but all other segments had record increases which produced the biggest Pet spending lift in history. 2022 had mixed results. Like the Food segment, the binge spending on Supplies and Veterinary Services was not repeated, so spending fell in both segments. However, Pet Food bounced back with a 12.5% increase and Services continued their spectacular growth. This produced only a small increase in Total Pet $ Spending but it certainly deserves a closer look.

The first question is, “Who is spending most of the $103 billion dollars?” There are of course multiple answers. We will look at Total Pet Spending in terms of 10 demographic categories. In each category we will identify the group that is responsible for most of the overall spending. Our goal was to find demographic segments in each category that account for 60% or more of the total. To get the finalists, we started with the biggest spending segment then bundled it with related groups until we reached at or near 60%.

Knowing the specific group within each demographic category that was responsible for generating the bulk of Total Pet $ is the first step in our analysis. Next, we will drill even deeper to show the best and worst performing demographic segments/groups and finally, the segments that generated the biggest dollar gains or losses in 2022.

In the chart that follows, the demographic categories are ranked by Total Pet market share from highest to lowest. We also included their share of total CU’s (Financially Independent Consumer Units) and their performance rating. Performance is their share of market vs their share of CU’s. This is an important number, not just for measuring the impact of a particular demographic group, but also in measuring the importance of the whole demographic category in Spending. All are large groups with a high market share. A performance score of 120+% means that this demographic is extremely important in generating increased Pet Spending. I have highlighted the 5 groups with 120+% performance.

The only group change from 2021 is that College Grads lost 6% in share and fell below the 60% threshold so Associate’s Degree> returned to the list. There were changes in the numbers and rankings. Homeowners moved up from 3rd to 2nd and the new Education group is 5th. College Grads were 7th in 2021. Again only 5 made the 120%+ club. Associate’s Degree> replaced College Grads in the club. Formal higher education matters. However, higher income remains the single most important factor in Total Pet Spending.

  1. Race/Ethnic – White, not Hispanic (83.9%) down from 84.2%. This is the 2nd largest group and has the largest share of Pet Spending. Their performance was down from 125.3% to 124.9% but they moved up from #4 to #3 in importance. Although this demographic, along with age, are 2 areas in which the consumers have no control, spending disparities within the group are enhanced by differences in other areas like Income, CU Composition and homeownership. There are also apparently cultural differences which impact Pet Spending. Asian Americans are first in income, education and total CU spending but they’re last in Pet Spending as a percentage of total spending – 0.40% vs a national average of 1.05%.
  2. Housing – Homeowners (81.2%) up from 80.0%. Controlling your “own space” is a key to larger pet families and more pet spending. 2022 was a good year for Homeowners, with & without Mtges. Homeowners spent $3.5B more and the group’s performance grew from 123.6% to 124.8%. Contributing to the increase was a 3.6% drop in spending by Renters. Homeowners moved up from 5th to 4th place in importance. The homeownership rate grew slightly to 65.1%. The lift came entirely from younger CUs as homeownership remained stable in the older groups.
  3. # in CU – 2+ people (80.8%) up from 80.6%. Singles remain the only group with under 100% performance. In 2022, there was a big increase in the number of singles, but they spent even less on their pets. At the same time, 3 person CUs spent $3.2B more. This explains the change in share and a performance increase from 115.9% to 117.1%.
  4. Area – Suburban & Rural (71.7%) down from 71.8% Homeownership is high and they have the “space” for pets. All areas spent more but Center City had the biggest % lift. This, in conjunction with more CUs, pushed Suburban/Rural’s performance down from 111.4% to 109.5%. Center City still has the worst performance at 82.1%
  5. Education – Associates Degree or more (71.5%) down from 74.7%. Higher Education is usually tied to higher income and Pet spending. It can also be a key factor in recognizing the value in product improvements. In 2021 College Grads binge spent $21.6B more on their pets. This was not repeated in 2022 so we returned to the Associates Degree or higher group. This group’s performance fell from 129.6% to 123.9% but they are #5 in importance. The drops are all due to College Grads. In 2022, the Associates Degree segment increased their share of Pet $ from 9.1% to 12.1% and their performance grew from 88.3% to 110.2%. They earned their spot.
  6. Income – Over $70K (67.5%) down from 68.2%. They lost a little share and their performance fell to 142.8% from 152.3%. However, CU income is still by far the most important factor in increased Pet Spending. Spending was again on a roller coaster: <$40K: -$0.5B; $40>69K: +$2.1B; $70>99K: -$1.2B; $100>199K: +$2.7B; $200K>: -$0.4B. Higher income is important. Consider: $100K> = 33.2% of CUs, 53.3% of Pet $; $150K> = 17..7% of CUs, 32.9% of Pet $
  7. # Earners – “Everyone Works” (66.8%) up from 66.4%. These are CUs of any size where all adults are employed. They gained share but their performance fell again, from 117.0% to 114.5%. They dropped out of the 120+% club in 2021 and are now only the 8th most important category. Income is important but # of Earners is less so. They gained share due to a +$2.77B lift from 2+ Earner CUs but their performance fell because they added 2.5 million more CUs.
  8. Occupation – All Wage & Salary Earners (65.7%) up from 63.2%. Their performance also grew from 106.5% to 109.0%. All but Service Workers spent more on their pets in 2022. Managers and Professionals (+$2.98B) and Blue Collar (+$1.43B) had the biggest spending increases. Blue Collar workers actually spent 30.2% more on their pets. Their gains were enhanced by a -$0.98B drop by Retirees and a -$1.2B decrease by “All Other”, which includes unemployed and those not working because of illness or attending school.
  9. CU Composition – Married Couples (61.8%) down from 62.7%. 2 people, committed to each other, is an ideal situation for Pet Parenting. In 2022, they lost share and their performance fell from 132.4% to 129.3%, but they moved up from 3rd to 2nd place in importance because College Grads dropped out. Their drops in share and performance were due to a -$2.6B decrease from those with an oldest child 6>17 and a big lift by single parents.
  10. Age – 35>64 (61.1%) up from 60.9%. They gained share and their performance grew from 116.2% to 117.2%. A $4.3B increase from 45>64 overwhelmed the $2.3B drop by the 35>44 yr-olds. <25 was +$0.77B while the 65> lift and 25>34 drop cancelled each other out. Pet Spending is slightly more balanced, and age stayed 7th in importance.

Total Pet Spending is a sum of the spending in all four industry segments. The “big demographic spenders” listed above are determined by the total pet numbers. The share of spending and performance of these groups varies between segments. In fact, in the Veterinary & Services segments we altered some groups to better reflect where most of the business is coming from. There’s was some turmoil but in 2022 Pet Spending returned to more normal behavior.

Performance is an important measurement. Any group that exceeds 120% indicates an increased concentration of the business which makes it easier for marketing to target the big spenders. Income over $70K is again the clear winner, but there are other strong performers. High performance also indicates the presence of segments within these categories that are seriously underperforming. These can be identified and targeted for improvement. However, 2022 is a bit more complicated. Many of the big drops in spending came from segments that binge bought Supplies & Vet Services in 2021. These big moves, up or down can affect the total group performance. We’re not there yet but we’re closer to normal.

Now, let’s drill deeper and look at 2022’s best and worst performing segments in each demographic category

Most of the best and worst performers are expected but there are 4 winners & 3 losers that are different from 21. Last year there were 9 new winners and 1 loser. The situation is becoming more normal. Changes from 2021 are “boxed”.

  • Income is important in Pet Spending, which is shown by the 195.5% performance by the $200K> group and wins by the high income 3 Earners, Mgrs/Prof, 45>54 and Adv College Degrees. All groups over $70K performed at 100+%.
  • Occupation – Mgrs/Professionals & Self-Employed are the only occupations with 100+% performance. Retirees edged out Service Workers (76.9%) for the bottom spot.
  • Age/Generation – Gen X won again but spending skewed towards their older members with the 45>54 win.
  • Region – The Midwest returned to the top. The West (the usual winner) also had 100+% performance.
  • CU Size/Composition – The importance of children was maintained with wins by 4 People and those with an Oldest Child over 18. Single Parents had a strong year and moved off the bottom. The “magic” CU number fell from 5 to 4.

The winners reflect the continued move back towards more normal spending patterns from slightly older CUs. In the next section we’ll look at the segments which literally made the biggest difference in spending in 2022.

We’ll “Show you the money”! This chart details the biggest $ changes in spending from 2021.

Like 2021, in 1 category, all segments spent more – Area Type. In 2021, it was # of Earners. Only 3 segments held their spot from 2021 while 9 switched from winner to loser or vice versa. There was considerable internal turmoil but much less than in 2021 when 17 flipped. However, 87.5% were different from last year, just a little better than 96% in 2021.

  • Region – The winner and loser both flipped. This only happened in the Region Category.
    • Winner – Midwest – Pet Spending: $25.36B; Up $6.39B (+33.7%)                                2021: West
    • Loser – West – Pet Spending: $26.32B; Down -$3.99B (-13.2%)                                     2021: Midwest
    • Comment – In 2021 the Midwest had the only decrease in Total Pet $. In 2022 they had double digit increases in all segments. The South also spent more, +$1.9B. The West spent less in all but Services.
  • Education – Adv College degrees flipped to last, but all College Grads spent less in every industry segment.
    • Winner – Associates Degree – Pet Spending: $12.41B; Up $3.33B (+36.7%)                       2021: Adv. College Degree
    • Loser – Adv. College Degree – Pet Spending: $28.70B; Down -$3.74B (-11.5%)                 2021: < HS Grads
    • Comment – All segments w/o a College Degree spent more but those with an Associate’s Degree had an especially strong year. Their Vet spending was only +5.8% but Services was +116.3% and Products was +47.5%.
  • Age – The 35>44 yr-olds flipped to the bottom as they “gave back” the 2021 big lifts in Supplies & Veterinary.
    • Winner – 45>54 yrs – Pet Spending: $21.80B; Up $3.29B (+17.8%)                              2021: 35>44 yrs
    • Loser – 35>44 yrs – Pet Spending: $19.05B; Down $2.34B (-10.9%)                             2021: 55>64 yrs
    • Comment: The high-income 45>54 yr-olds are back on top but only the 25>44 and 75+ groups spent less.
  • # in CU – A new winner and loser but no flips.
    • Winner – 3 People – Pet Spending: $17.73B; Up $3.23B (+22.2%)                                2021: 2 People
    • Loser – 5+ People – Pet Spending: $10.27B; Down -$1.21B (-10.6%)                            2021: 4 People
    • Comment: All groups spent more on Services but less on Veterinary. Only 2 People CUs spent less on Food while only 3 People CUs spent more on Supplies. However, only 2 & 5+ people CUs spent less Total Pet $.
  • Occupation – Retirees flipped from 1st to last.
    • Winner –– Managers & Professionals – Pet Spending: $37.57B; Up $2.98B (+8.6%)           2021: Retired
    • Loser – Retired – Pet Spending: $17.32B; Down -$0.98B (-55.3%)                                           2021: Self-Employed
    • Comment– Only Retirees, Service Workers & Unemployed/All other spent less. Blue & White collar spent more.
  • CU Composition – With big lifts in all but Veterinary, Married with an oldest child over 18 flipped from last to 1st.
    • Winner – Married, Oldest Child 18> – Pet Spending: $11.498; Up $2.70B (+30.7%)                       2021: Married, Couple Only
    • Loser – Married, Oldest Child 6>17 – Pet Spending: $14.52B; Down -$2.58B (-15.1%)                  2021: Married, Child 18>
    • Comment – Married, oldest child 6>17 spent more on Services but were the only group with a drop in Total Pet $
  • Income – With double digit increases in all but Veterinary, $100>149K flipped to the top.
    • Winner – $100>149K – Pet Spending: $20.99B; Up $2.49B (+13.4%)                              2021: $200K>
    • Loser – $70 to $99K – Pet Spending: $14.58B; Down -$1.16B (-7.3%)                             2021: $100>149K
    • Comment – There was no clear pattern. This category was on a spending rollercoaster. <$40K: -$0.54B; $40>69K: +$2.13B; $70>99K: -$1.16B; $100>199K: +$2.72B; $200K>: -$0.41B.
  • # Earners – After their surprising win in 2021, No Earner 2+ CUs flipped to the bottom.
    • Winner – 1 Earner, 2+ CU – Pet Spending: $19.01B; Up $2.17B (+12.9%)                        2021: No Earner, 2+ CU
    • Loser – No Earner, 2+ CU – Pet Spending: $7.67B; Down $2.53B (-24.8%)                      2021: 1 Earner, Single
    • Comment – 1 Earner, singles also spent less. All other groups including No Earner, Singles spent more.
  • Race/Ethnic – White, Not Hispanics stayed on top.
    • Winner – White, Not Hispanic – Pet Spending: $86.18B; Up $2.04B (+2.4%)                2021: White, Not Hispanic
    • Loser – Hispanic – Pet Spending: $9.45B; Down -$0.54B (-5.4%)                                     2021: African American
    • Comment – African Americans had a huge, +43.9% increase but Hispanics and Asians spent less.
  • Generation – In a true surprise, Gen Z is on top. They are “growing up” and Pet Parenting is radically increasing.
    • Winner Gen Z – Pet Spending: $3.48B; Up $1.84B (+112.6%)                                          2021: Gen X
    • Loser – Born <1946 – Pet Spending: $5.19B; Down -$1.46B (-22.0%)                               2021: Baby Boomers
    • Comment – Boomers had the 2nd biggest lift and only the oldest generations, born <1946 spent less.
  • Housing – Homeowners w/o Mtge flipped from last to 1st
    • Winner – Homeowner w/o Mtge – Pet Spending: $26.94B; Up $1.79B (+7.1%)             2021: Homeowner w/Mtge
    • Loser – Renter – Pet Spending: $19.27B; Down -$0.73B (-3.6%)                                       2021: Homeowner w/o Mtge
    • Comment – The win by Homeowners w/o Mtge was driven by CUs who have paid off their home but haven’t retired. They just edged out Homeowners w/Mtge, +$1.67B. Only Renters spent less.
  • Area Type – Both winner and loser held their positions and all segments spent more.
    • Winner – Suburbs 2500> – Pet Spending: $46.46B; Up $0.99B (+2.2%)                          2021: Suburbs 2500>
    • Loser – Areas <2500 – Pet Spending: $27.18B; Up $0.81B (+3.1%)                                  2021: Areas <2500
    • Comment – The Big Suburbs stayed in their usual spot at the top. Center City had a +$0.93B lift and Areas <2500 rebounded from a drop in 2021. The increases were pretty balanced, ranging from +2.2% to +3.3%.

We’ve seen the best overall performers and the “winners” and “losers” in terms of increase/decrease in Total Pet Spending $ for 12 Demographic Categories. Now, here are some segments that didn’t win an award, but they deserve….

HONORABLE MENTION

It was not a good year for College Grads but it was a great year for those without a BA/BS. Associates had the biggest lift but those w/o a HS diploma more than doubled their Pet $. Single parents are often on the “bottom” in Pet Spending, but they spent 54% more in 2022. In 2021, African Americans had the only drop in spending by a racial/ethnic group. In 2022 they rebounded with a +43.9% increase, by far the biggest percentage lift of any group in the category. Not all Gen Zers are under 25 but all CUs below 25 are Gen Z. The <25 group have radically increased their Pet Parenting responsibility and spending. Pet Spending continues to be centered in the higher income groups but almost 70% of all CUs have pets. They are an important part of the family for all Pet Parents. Although they didn’t win any awards, the 28% Pet Spending increases by Blue Collar Workers and the low income $40>49K group clearly demonstrate the widespread importance of the Pet members of U.S. households.

Summary

To properly review 2022, we must put it into context with recent history. Total Pet Spending reached $78.60B in 2018, a $14.28B, 22.2% increase from 2014. However, it was not a steady rise, Total spending actually fell in 2016 and each segment had at least one down year. There were a number of factors driving both the growth and tumult within the industry. Two big positives were the movement to super premium pet foods and the rapid expansion of the number of outlets offering pet services. On the downside were value shopping, trading $ between segments and outside influences like the FDA dog food warning and tariffs. Pricing, inflation/deflation was also a negative/positive factor in some cases.

In 2019, the industry had another small decrease, -$0.16B (-0.2%) which was largely driven by a huge drop in spending in Supplies caused by Tarifflation. This affected virtually every demographic segment and caused Supplies $ to fall below 2014. Services spending also fell slightly as consumers value shopped. The good news was that Pet Food bounced back from the impact of the 2018 FDA warning to reach a new record high. Veterinary $ also increased 2.7%. Unfortunately, this was entirely due to a 4.1% increase in prices. The amount of Vet Services sold actually decreased.

That brings us to 2020 and the Pandemic turmoil. The effect was positive for Food and Veterinary, especially Food. Out of fear of shortages, many Pet Parents binge bought Pet Food. Spending also increased in Veterinary, as consumers focused on their Pets’ needs. The discretionary segments suffered. Supplies prices stayed high, so spending continued to decline. Services saw the biggest negative pandemic impact as many outlets were subject to closures and restrictions.

2021 was a new year and brought a change in attitude as the marketplace returned to “normal”. The Food binge buying wasn’t repeated but Pet Parents caught up with all their “children’s” wants and needs. This produced a record increase in Total Pet +$16.23B) and in all segments but Food. Gen X took back the top spot in $ and  Pet spending skewed younger and back to more traditional winners, like Homeowners w/Mtges and Incomes over $200K.

In 2022, the spending lift was much smaller. Food $ increased by 12.5% and Services had another record increase, +$3.26B. This was enough to overcome the big “binge drops” in Veterinary and Supplies and produce a 2.7% increase in Total Pet $. 72% of 96 demographic segments spent more on their pets. This is good but down considerably from 83% in 2021. The lift was not quite as widespread as 2021 but in some ways, spending became a little more balanced with strong performances by those without a college degree, Blue Collar workers, African Americans and Gen Z – to name a few. Income is still important as Gen X stayed on top. Spending also skewed a little older towards the oldest Gen Xers, 45>54 yr olds. Baby Boomers are still the “heart” of the Pet Industry, but Gen Xers are likely to stay on top in $ for a number of years, until they are eventually displaced by the Millennials.

Before we go…The Ultimate Total Pet Spending CU in 2022 has 4 people, a married couple with an oldest child 18>. They are 45>54 yrs-old. They are White, but not Hispanic. Both work and so does their oldest child. At least one has an Advanced College Degree and is a Mgr/Professional. They earn $200K+. They still have a mortgage on their house located in a small suburb in the Midwest.

2022 U.S. Pet Spending by Generation – Gen X Stays on Top!

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 1st 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 3rd, 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 2nd 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.

Petflation 2023 – October Update: Down to +5.2% vs 2022

Inflation continues to slow but is still far above the norm. 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 July & August 2023. In October prices dropped 0.04% from September and the CPI  fell to +3.2% from +3.7% vs 2022. Grocery inflation also continued to slow. After 12 straight months of double-digit YOY monthly increases, grocery inflation is now down to +2.1%, 8 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 5.2% in October, it is still 62.5% above the national rate of 3.2%. 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 October 2021 to October 2023. 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 patterns between segments 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 added and highlighted (pink) the cumulative price peak for each segment. In October, Pet prices were up from last month overall and in all segments but Non-Vet Services.

In October 21, the CPI was +7.6% and Pet prices were +3.4%. 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. 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 October, but 35% of the 19.7% increase in the 46 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/Oct. 93% of the 23.1% 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 high in May, fell in Jun>Aug, then grew in Sep>Oct.
  • 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>Oct.
  • 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>Oct to a new high.
  • Total Pet – Petflation is a sum of the segments. In December 21, the pricing surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in December, turned up Jan>May 23, fell in Jun>Aug, then grew in Sep>Oct. Except for 5 monthly dips, prices in all segments increased monthly Jan>Jun 23. In Jul>Aug there 5 more dips but only 2 in Sep>Oct. Cumulative Petflation has been above the CPI since Nov. 22.

Next, we’ll turn our attention to the Year Over Year inflation rate change for October and compare it to last month, last year and to previous years. We will also show total inflation from 21>23 & 19>23. Petflation fell again to 5.2% in October, but it is still over 1.6 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 -0.04% from September but were +3.2% vs October 22, down from +3.7% last month. Grocery inflation is down again, to +2.1% from +2.4%. Only 2 of 9 categories had a price decrease from last month – Pet Services & the National CPI. There was only 1 in September, but 4 in August. That’s 2 consecutive monthly decreases for Pet Services. The national YOY monthly CPI rate is down to 3.2% from 3.7% in Aug>Sep and is only 42% of the 21>22 rate. The 22>23 inflation rate is below 21>22 for all categories for the 2nd 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 94.8% 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 -0.04% from September. The YOY increase is 3.2%, down from 3.7%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 85% higher than the target. After 12 straight declines, we had 2 lifts, then a stable month and now another drop – good news! The current inflation rate is 58.4% below 21>22 but the 21>23 rate is still 11.2%. That is 57% of the total inflation since 2019, but it is now below 60%.
  • Pet Food– Prices are +0.1% vs September and +6.5% vs October 2022, down from 7.6%. However, they are still 3.1 times the Food at Home inflation rate. The YOY increase of 6.5% is being measured against a time when prices were 15.4% above the 2019 level, but that increase is still 1.8 times the pre-pandemic 3.7% increase from 2018 to 2019. The 2021>2023 inflation surge has generated 98.3% of the total 22.9% inflation since 2019.
  • Food at Home – Prices are up +0.3% from September. The monthly YOY increase is 2.1%, down from 2.4% in September and radically lower than Jul>Sep 2022 when it exceeded 13%. The 25.8% Inflation for this category since 2019 is 32% more than the national CPI and remains 2nd to Veterinary. 57% 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 up +0.1% from September but down -1.2% vs October 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 92% of the total price increase since 2019. They reached an all-time high in October 2022 then prices deflated. 3 straight 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, then turned up in Sep>Oct.
  • Veterinary Services – Prices are up +0.4% from September. They are +8.1% from 2022 and took the #1 spot from Food in the Pet Industry. Plus, they are still the leader in the increase since 2019 with 29.1% compared to Food at home at 25.8%. For Veterinary Services, relatively high annual inflation is the norm. The rate did increase during the current surge so 69% 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 0.2% from September but are -2.0% vs 22. Prices have now deflated for 6 straight months. Medical Services are not a big part of the current surge as only 38% of the 2019>23 increase happened from 21>23.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021. October 23 prices were -0.4% from September but +4.7% vs 22, which is down from 6.0% last month and much lower than 8.0% in March. Now, only 55% of their total 20.6% inflation since 2019 occurred from 21>23.
  • Haircuts/Other Personal Services – Prices are up 0.4% from September and +5.0% from 2022, up slightly from 4.8% last month. Inflation has been rather consistent as 50% of the inflation from 19>23 happened from 21>23.
  • Total Pet– Petflation is now 55% lower than the 21>22 rate, but still 1.6 times the National CPI. For October, +5.2% is the 4th highest rate since 1997 (2022: 11.6%; 2008: 9.7%; 2007: 5.5%). Vs September, prices again grew for all but Services so Total Pet was +0.2%. A Sep>Oct increase has happened in 17 of the last 24 years so it was not 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 2022 to 2023 is the biggest for 4 of 9 categories – All Pet. The 22>23 rate for Haircuts is slightly below 21>22. However, the Total CPI, Pet Supplies, Medical Services and Food at Home are significantly down from 21>22. The average annual increase since 2019 is 4.5% or more for all but Medical Services (2.8%) and Pet Supplies (2.5%).

  • U.S. CPI – The current increase is down 48% from 21>22 and 4.4% less than the average increase from 2019>2023, but it’s 65% more than the average annual increase from 2018>2021. 68% of the 19.1% 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 1st 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 35%. You can see the impact of supply chain issues on the Grocery category as 70% of the inflation since 2019 occurred from 2021>23.
  • Pets & Pet Supplies – Although prices rose in October, the YTD inflation rate is down to 3.3%. Prices deflated significantly in both 2020 & 2021 which helped to create a very unique situation. Prices are up 10.4% from 2019 but 106% of this increase happened from 2021>23. Prices are up 11.0% from their 2021 “bottom”.
  • Veterinary Services – They are still #1 in inflation since 2019 but they have only the 2nd highest rate since 2021. At +6.4%, they have the highest average annual inflation rate since 2019. Except for a sight slowing in 2020, inflation has consistently increased since 2019. 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 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. YTD October fell a little from 6.8% to 6.6%. Interestingly, although the rates are not as high, they have the exact same annual inflation pattern as Veterinary. The Services segments in the Pet Industry are definitely unique.
  • 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+%, 93% higher than 18>19. Consumers are paying 21% more than in 2019, which usually reduces the purchase frequency.
  • Total Pet – There were two different patterns. After 2019, Prices in the Services segments continued to increase, and the rate grew as we moved 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 turned up in Sep & Oct. The Services segments have also had ups & downs but have generally inflated. The net is a YTD Petflation rate vs 2022 of 8.7%, double the National CPI. In May 22 it was 5.8% below the CPI.

Petflation is slowing, but still strong. Petflation dropped from 5.7% in September to 5.2% in October. This is 57% below the record 12.0% set in November, but still the 4th highest rate for the month. The last 5 months have all been <10% but 9 of 15 have been 10+%. The current 5.2% rate is still 3.3 times the 1.6% average rate from 2010>2021 and also 1.6 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 5.2% from 2022 but they are up 17.4% from 2021 and 22.0% 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. The Pet Food inflation rate has slowed for 6 straight months, and Pet Supplies prices have deflated vs 2022 in 2 of the last 3 months, including a -1.2% drop in October. It’s just a start. Let’s hope that it accelerates “down”.

2022 U.S. TOTAL PET SPENDING $102.71B…Up ↑$2.73B

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 2nd 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 1st 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 2nd 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 1st 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 1st to last or vice versa. In 2021 there were 16 flips. In 2022 the flips were evenly divided between 1st 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 1st 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.

2022 U.S. VETERINARY SERVICES SPENDING $29.71B…Down ↓$2.95B

Veterinary Services is the 2nd largest segment in the Pet Industry. For years, high inflation has been a problem in the segment. Spending grew 24.0% from 2014>2019. Prices rose 17.4%, an avg of 3.3%. This caused a reduction of visit frequency and only 28% of the growth was “real” (avg real growth: +1.3%). In late 2020 & 2021, COVID focused Pet Parents on their “children’s” needs, including Veterinary Services. In 2021 Veterinary Spending reached $32.76 with 87% “real” growth. In 2022 the binge was not repeated so spending dropped to $29.71B, down $2.95B (-9.0%). Inflation was also high in 2022, 8.8%. In this report, we’ll take a closer look at the demographics behind the 2022 numbers. Note: All 2022 numbers in this report come from or are calculated by using data from the US BLS Consumer Expenditure Interview Survey, rather than their Diary report. The low frequency of Veterinary Visits is still generating an extremely high variation in Diary data. Interview is a more logical and accurate way to track Veterinary Services Expenditures.

Let’s get started. Veterinary Spending per CU in 2022 was $221.60 down 9.4% from $244.51 in 2021. (Note: A 2022 Pet CU (68%) Spent $325.88. More specifically, the decrease in Veterinary spending came as a result of:

  • 0.4% more CU’s
  • Spending 7.7% less $
  • …1.8% less often

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

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

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

Veterinary Spending is still strongly driven by income. All groups spent less in 2022 with the biggest drop coming in the $70K> group. This is not unexpected as they drove the “binge” lift in 2021. The $100>150K group had the smallest decrease. However, the 50/50 spending break point in $ still grew slightly from $113K in 2021 to $115K in 2022.

National: $221.60 per CU (-9.4%) – $29.71B – Down $2.95B (-9.0%)

  • Over $150K (17.7% of CUs) – $428.31/CU (-19.8%) $10.15B, Down $1.11B (-9.9%) This highest income group is the biggest Veterinary Spender as 17.7% of CUs generated 34.1% of 2022 $ but also 37.6% of the decrease from 2021.
  • $100>150K (15.5% of CUs) – $326.23/CU (-9.6%) $6.78B, Down $0.06B (-0.9%) Spending by this middle/upper income group slowed in 2019 but took off in 20>21 as they filled their pets’ needs. In 2022, their spending stabilized.
  • $70K>100K (14.1% of CUs) – $202.95/CU (-24.3%) $3.84B, Down $1.47B (-27.7%) Steady growth 2016>19. Then $ fell in 2020 due to monetary pressures. 2021 had a big lift. High inflation was likely a factor in their big 2022 drop.
  • $30K>70K (28.9% of CUs) – $151.44/CU (-0.6%) $5.87B, Down $0.17B (-2.8%) From 2016 to 2020 their pattern was remarkably similar to the big spending $150K+ group. That changed in 2021 as they were the only group to spend less in Vet $ while $150K> had the biggest lift. In 2022 their $ continued to drop but the decrease was only -2.8%.
  • Under $30K (23.8% of CUs) $96.37/CU (+2.5%) $3.08B, Down $0.13B (-4.1%) This group is very price sensitive. After the big spending dip in 2018, they have slowly but consistently increased Veterinary spending until the small drop in 2022. They are 20% ahead of their 2017 Veterinary $, but considering inflation, they actually bought 5% less.

Now, here is Veterinary Spending by Age Group

Only 45>54 & 75> spent more. 55>64 & 35>44 had the biggest drops, about -$1.5B. In 2021 they had the biggest lifts.

National: $221.60 per CU (-9.4%) – $29.71B – Down $2.95B (-9.0%)

  • <25 (4.7% of CUs) – $60.30/CU (-5.6%) -$0.38B – Down $0.04B (-10.4%) Many combined into group CUs and some got married so 5.1% less CUs spent 7.8% more $ …12.5% less often.
  • 25>34 (15.6% of CUs) – $200.84/CU (-15.5%) – $4.20B – ↓ $0.80B (-16.0%) The commitment of these Millennials to their pets is growing. After being stable from 2017>19, the pandemic caused Veterinary spending to take off In 2020 & 2021. A 2022 drop was not unexpected as 0.6% less CUs spent 7.5% less $ …8.7% less often.
  • 35>44 (17.0% of CUs) – $223.94/CU (-21.7%) – $5.11B – ↓ $1.45B (-22.1%) In 2019, they radically increased their spending and briefly became #1 in Veterinary $. In 2020, unlike most groups, spending decreased. In 2021 they had the biggest % increase. In 2022 their spending fell $1.44B as 0.5% less CUs spent 6.0% less $ …16.7% less often.
  • 45>54 (16.9% of CUs) – $303.96/CU (+11.2%) – $6.90B – Up $0.80B (+13.2%) This group has the highest income, but value is important. In 2017, the slowed inflation caused them to spend significantly more money. In 2018, prices turned up and continued to inflate in 2019. Spending dropped precipitously to their 2016 level and they lost the top spot in Veterinary $. 2020 brought a big spending lift which continued into 2021 and 2022 despite high inflation. They moved back to the top in Veterinary spending as 1.8% more CUs spent 6.5% more $…4.4% more often
  • 55>64 (18.2% of CUs) – $251.46/CU (-18.7%) – $6.14B – ↓ $1.51B (-19.7%) This group was the leader in Veterinary Spending prior to 2015. In 2015 they upgraded to Super Premium Food and Vet Spending fell. In 2016 inflation slowed and they regained the top spot. In 2018 Veterinary prices began to strongly inflate again. Their spending fell and continued down into 2019. In 2020 they moved back to the top in Veterinary Spending. They stayed there with the biggest lift in 2021. In 2022 their spending binge ended and inflation soared to 8.8% so 1.3% fewer CUs spent 21.0% less $ …2.9% more often. They had the biggest drop in $, -$1.51B and fell to 2nd place in Veterinary spending.
  • 65>74 (16.2% of CUs) – $216.86/CU (-3.9%) – $4.71B – ↓ $0.14B (-2.8%) This group is growing and is all Boomers, so they are committed to their pets. They had consistent annual growth from 2018>2021. In 2022 1.2% more CUs spent 8.9% less $ …5.4% more often. Inflation was likely a factor in their small decrease.
  • 75> (11.4% of CUs) – $149.35/CU (+3.5%) – $2.28B – Up $0.18B (+8.6%) This group of oldest Pet Parents has a strong commitment to their pets. In 2015, they had a $1B increase in Veterinary Spending. In 2016 & 2017, they focused on Food, Supplies and Services. In 2018, they turned their attention back to Veterinary. However, their spending has slowly but consistently grown every year since 2015 – the only group to accomplish this. In 2022 4.9% more CUs spent 7.2% less $ …11.5% more often. This produced an 8.6% increase in spending.

Now, let’s take a look at some other key demographic “movers” behind the 2022 Veterinary Spending numbers.

Veterinary spending fell by $2.95B (-9.0%) in 2022. With a high 8.8% inflation rate, the real drop in the amount of services bought was -16.4%. 74 of 96 demographic segments (77.1%) spent less on Veterinary Services, a big change from 2021 when 93.4% of segments spent more. There was a lot of turmoil as 14 of 24 flipped from first to last or vice versa while only 3 segments maintained their position from 2021. 8 of the flips were from 1st to last. We should also note that in 2021 there were 9 categories in which all segments spent more. In 2022 in 3 categories, all spent less.

Only 4 of the “winners” are often found at the top:

    ∙ 45>54 yr olds   Gen X   $200K    Homeowners w/Mtg (had the smallest decrease)

The biggest surprises are:

   ∙ Blue Collar   HS Grad or Less   African American   No Earner, Single   Center City (had the smallest decrease)

Both groups have one characteristic in common – Income. The usual winners have the highest income in their demographic category and the surprises are all at or near the bottom in income for their category.

In the “losers” group, there are only 2 that are often on the bottom – Renters and Unmarried, 2+ Adult CUs. 8 of the 12 flipped from 1st in 2021 to last in 2022 but all have 1 thing in common. They all binge spent on Veterinary Services in 2021. Since binges usually aren’t repeated, it’s not surprising that they had big decreases in 2022.

Overall, the $2.95B drop in $ was just 37.7% of the $7.82B lift in 2022 – a net gain of $4.87B in 2 years (+19.6%). Considering inflation, 87% of the 20>21 growth was real but only 31.5% of the 20>22 growth. There was only a 6.2% increase in the amount of Veterinary Services bought from 2020 to 2022. High inflation is a problem.

The 2022 decrease was widespread across Income and Age groups as all income groups spent less and only 2 age groups spent more. The drop was also widespread beyond Age and Income. 77% of all segments spent less including 3 categories – Housing, Area and CU Size, where all segments had decreased Veterinary Services spending.

Prior to 2020 there was a strong youth movement in Veterinary Spending from the <45 crowd. That changed in 2020 as the 45> groups accounted for 94% of the $3B increase. In 2020 & 2021 the 55>64 yr-olds were on top , followed by the highest income 45>54 yr-olds in 2022. The $ are skewing older but have also become more balanced from 25>74. Although Veterinary services are needed by all Pet Parents, higher income is still the biggest driver in spending. This is best illustrated by comparing segment performance (Share of $/Share of CUs): <$30K: 50.6%; $30>69K: 68.3%; $70K>99K: 91.6%; $100>149K: 147.2%; $150>199K: 151.2%; $200K>: 225.3%. Yes, Vet Services are needed by all, but are becoming less affordable for many.

2022 U.S. PET SERVICES SPENDING $12.36B…Up ↑$3.26B

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 2nd 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 3rd 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 1st 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 1st or 2nd 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 2nd. 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.

Petflation 2023 – September Update: Drops again to +5.7% vs 2022

While inflation is slowing, it is still a concern. 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 July & August 2023. In September prices grew 0.2% from August but the CPI remained stable at +3.7% vs 2022. However, Grocery inflation continued to drop. After 12 straight months of double-digit YOY monthly increases, grocery inflation is down to +2.4%, 7 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 5.7% in September, it is still 1.5 times the national rate of 3.7%. 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 September 2021 to September 2023. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus yearend and those from 12 and 24 months earlier are included. This will give you some key waypoints. In September, Pet prices were up from last month overall and in all segments but Non-Vet Services.

In September 21, the CPI was +6.7% and Pet prices were +3.2%. 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 accelerated. In Nov>Dec, Services & Food prices continued to grow while Vet & Supplies prices stabilized. In Jan>Apr, 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 September this pattern was reversed. Petflation has been above the CPI since November 2022.

  • 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 again in Jan>Sep but 34% of the overall 19.8% increase in the 45 months since December 2019 happened in the 6 months from January>June 2022 – 13% of the time.
  • Pet Food – Prices were at or below December 2019 levels from Apr 20>Sep 21. They turned up with a sharp lift in Dec which continued until the Jun>Aug 23 dip. Prices then grew in September. 93% of the 23.1% increase since 2019 has occurred since 2022.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 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, set a record in May, fell in Jun>Aug then grew in September.
  • 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 in Jun>Aug, then fell in September.
  • Veterinary – Inflation has been consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. 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 turned up again and despite some dips they have stayed above the CPI since July 22. In 2023 prices grew Jan>May, stabilized Jun>Jul, fell in August, then increased in September.
  • Total Pet – Petflation is a sum of the segments. In December 21 the pricing surge began. In Mar>Jun 22 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in December, turned up Jan>May 23, fell in Jun>Aug, then grew in September. Except for 5 individual monthly dips, prices in all segments increased monthly Jan>Jun 23. In Jul>Aug there 5 more dips but only 1 in September – Services. Petflation has been above the U.S. CPI since November. 2022.

Next, we’ll turn our attention to the Year Over Year inflation rate change for September 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 5.7% in September, but it is still 1.5 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% vs August and were up 3.7% vs September 22 the same as August. Grocery inflation is down again, to +2.4% from +3.0%. Haircuts prices were unchanged from last month but only 1 of 9 categories had a decrease, compared to 4 in August. Pet Services had the decrease, -0.5%. The national YOY monthly inflation rate for September is unchanged from August but only 45% of the 21>22 rate. The 22>23 inflation rate for all categories is now below 21>22. However, the difference is slight for Non-Vet Services and Haircuts. 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 60% of the National CPI so they are very influential. We also see that Pet Products have a very different patttern. The 21>23 inflation surge provided over 93% 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 August. The YOY increase remained stable at +3.7%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 85% higher than the target. After 12 straight declines, we had 2 lifts, so stability is an improvement. The current inflation rate is below 21>22 but the 21>23 rate is still 12.2%, 62% of total inflation since 2019. How many households “broke even” by increasing their income by 12% in 2 yrs.
  • Pet Food– Prices are +0.3% vs August and +7.6% vs September 2022. They are also 3.2 times the Food at Home inflation rate – not good news! The YOY increase of 7.6% is being measured against a time when prices were 14.4% above the 2019 level, but that increase is still 2.3 times the pre-pandemic 3.3% increase from 2018 to 2019. The 2021>2023 inflation surge has generated 96.2% of the total 23.5% inflation since 2019.
  • Food at Home – Prices are up +0.1% from August. The monthly YOY increase is 2.4%, down from 3.0% in August and considerably lower than Jul>Sep 2022 when it exceeded 13%. The 25.8% Inflation for this category since 2019 is 30% more than the national CPI and remains 2nd to Veterinary. 61% 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 up +1.0% from August but only +0.1% vs September 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 87% of the total price increase since 2019. They reached an all-time high in October 2022 then prices deflated. 3 straight 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, then turned up in September.
  • Veterinary Services – Prices are up +0.9% from August. They are +7.5% from 2022 and are still in 2nd place behind Food (+7.6%) in the Pet Industry. However, they are still the leader in the increase since 2019 with 28.7% compared to Food at home at 25.8%. 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 1% from August but are -2.6% vs 2022. Prices have now deflated for 5 straight months. Medical Services are not a big part of the current surge as only 38% of the 2019>23 increase happened from 21>23.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021. September 23 prices were -0.5% from August but +6.0% vs 2022, which is down from 7.2% in last month and much lower than 8.0% in March. Initially their inflation was tied to the current surge, but it may be becoming the norm as only 59% of the total since 2019 occurred from 21>23.
  • Haircuts/Other Personal Services – Prices are unchanged from August but +4.8% from 2022, the lowest rate since 2019. Inflation has been rather consistent as just 47% of the inflation from 19>23 happened from 21>23.
  • Total Pet– Petflation is now 48% lower than the 21>22 rate, but stll 1.5 times the National CPI. For September, +5.7% is the 3rd highest rate since 1997 (2022: 11.0%; 2008: 9.5%). Vs August, prices grew for all but Services so Total Pet was +0.4%. An Aug>Sep increase has happened in 13 of the last 24 years so it was not a surprise. Food & Veterinary 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 2022 to 2023 is the biggest for 4 of 9 categories – All Pet. The 22>23 rate for Haircuts is equal to 21>22. However, the Total CPI, Pet Supplies, Medical Services and Food at Home are significantly down from 21>22. The average annual increase since 2019 is 4.5% or more for all but Medical Services (2.8%) and Pet Supplies (2.5%).

  • U.S. CPI – The current increase is down 47% from 21>22 and 2.2% less than the average increase from 2019>2023, but it’s 91% more than the average annual increase from 2018>2021. 69% of the 19.0% 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 1st half of 2021 kept YTD prices low then prices surged in 2022. 95.6% 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 41%. You can see the impact of supply chain issues on the Grocery category as 72% of the inflation since 2019 occurred from 2021>23.
  • Pets & Pet Supplies – Although prices rose in September, the YTD inflation rate is down to 3.8%. Prices deflated significantly in both 2020 & 2021 which helped to create a very unique situation. Prices are up 10.6% from 2019 but 107% of this increase happened from 2021>23. Prices are up 11.3% from their 2021 “bottom”.
  • Veterinary Services – They are still #1 in inflation since 2019 but they have only the 2nd highest rate since 2021. At +6.4%, they have the highest average annual inflation rate since 2019. Except for a sight slowing in 2020, inflation has consistently increased since 2019. 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 been deflating and are now at -0.1% YTD, the only 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. YTD September fell a little from 7.0% to 6.8%. Interestingly, although the rates are not as high, they have the exact same annual inflation pattern as Veterinary. The Services segments in the Pet Industry are definitely unique.
  • 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+%, 90% higher than 18>19. Consumers are paying 21% more than in 2019, which usually reduces the purchase frequency.
  • Total Pet – There were two different patterns. After 2019, Prices in the Services segments continued to increase, and the rate grew as we moved 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. Prices in both segments turned up in September. The Services segments have also had ups & downs but have generally inflated. The net is a YTD Petflation rate vs 2022 of 9.1%, 2.1 times the CPI. In May 22 it was 5.8% below the CPI.

Petflation is slowing, but still strong. Petflation dropped from 6.6% in August to 5.7% in September. This is less than half of the record 12.0% set in November, but still the 3rd highest rate for the month. More bad news is that 9 of the last 14 months have been over 10% and the current rate is still 3.6 times the 1.6% average rate from 2010>2021. It’s also 1.5 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 5.7% from 2022 but they are up 17.4% from 2021 and 22.2% 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. The Pet Food inflation rate is dropping, and Pet Supplies prices are now only up 0.1% vs September 22. It’s just a start. Let’s hope that it accelerates “down”.

2022 U.S. PET SUPPLIES SPENDING $21.94B…Down ↓$1.86B

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 1st half then skyrocketed in the 2nd half. In 2022, it plateaued in the 1st half then fell sharply in the 2nd 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 1st half that reached record levels in the 2nd 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 2nd half. Spending plateaued then fell -$2.44B in the 2nd 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 3rd.
  • $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 2nd biggest COVID drop. In 21 they had the 2nd 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 2nd 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%); $4.57BUp $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%); $3.66BDown $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 1st 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 1st to last or vice versa. Only 1 segment held its spot. 5 flipped from last to 1st but 10 flipped from 1st 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 1st 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.

2022 U.S. PET FOOD SPENDING $38.69B…Up ↑$4.29B

After the record increase in 2021, Total Pet spending grew slightly to $102.71B, up $2.73B (+2.7%). Pet Food spending had double digit growth while Veterinary and Supplies $ fell after their record increases in 2021. The big news was Services. They had a record increase of $3.26B and 2 consecutive years of 30+% growth. However, a new factor affected 2022 Pet spending – strong inflation in every segment. Here are the 2022 spending specifics

  • Pet Food – $38.69B; Up $4.29B (+12.5%)
  • Pets & Supplies – $21.94B; Down $1.86B (-7.8%)
  • Veterinary – $29.71B; Down $2.95B (-9.0%)
  • Pet Services – $12.36B; Up $3.26B (+35.8%)

The industry truly is a “sum” of its integral segments, and each segment has very specific and often very different buying behavior from the many consumer demographic segments. For this reason, we’re going to analyze each of the industry segments first. This will put the final analysis of Total Pet’s 2022 Spending into better perspective. Note: The numbers in this report come from or are calculated by using data from the current and past US BLS Consumer Expenditure Surveys. In 2022, this was gathered by the U.S. Census Bureau from over 42,000 interviews and spending diaries. The final data was then compiled and published by the US BLS. All inflation numbers are also provided by the US BLS.

We will start with the largest Segment, Pet Food (and Treats). In 2022 Pet Food Spending totaled $38.69B in the U.S., a $4.29B (+12.5%) increase from 2021. Pet Food inflation was 10.2% in 2022 so 82% of the lift came from higher prices. In earlier research we discovered a distinct, long-term pattern in Pet Food Spending. In 2018 we broke the pattern due to outside influences – 1st the FDA warning, then with COVID in 2020. Here is Pet Food Spending since 1997 in full Retail Dollars and adjusted for inflation. Blue highlight indicates  plateau year and a red outline is a spending drop.

The pattern began in 1997. Retail Pet Food Spending increases for 2 consecutive years then reaches a plateau year or even drops. There was a notable exception in the period from 2006 to 2010. During this time, there were two traumas which directly impacted the Pet Food Retail market. The first was the Melamine recall, which resulted in radically increased prices as consumers insisted on made in USA products with all USA ingredients. The second affected everyone – the great Recession in 2009. This was the first time that annual U.S. retail spending had declined since 1956. The net result was that the plateau period was extended to include both 2009 and 2010.

For 20 years, Pet Food was driven by short term trends. A new trend catches the consumers’ attention and grows …for 2 years. Then sales plateau or even drop…and move to the next “must have”. After 2014, the changes  became bigger and the situation got more complex due to a number of factors starting with the move to high priced super premium foods, but including increased competition, especially from the internet, and behavioral changes, like increased value shopping. In 2018, outside influences came into prominence. The first was the FDA warning on Grain Free dog food. This caused many Pet Parents to back away from certain foods. When the warning was declared bogus, the Food segment began to recover. Then came COVID. Fear of possible shortages caused some groups to binge buy food. That ended and spending dipped in 2021. It turned up again in 2022. However, it may have been largely due to 10.2% inflation. Of note: Considering inflation, only 45% of the 97>22 growth is real. Now, let’s take a closer look at spending since 2014.

First, some specifics behind the $4.29B (+12.5%) increase to $38.69B. In 2022, the average U.S. Household spent a total of $288.75 on Pet Food. This was an +11.9% increase from the $258.09 spent in 2021, which doesn’t exactly “add up” to the +12.5% increase in total Food Spending. With additional data provided from the US BLS, here is what happened.

  • 0.5% more U.S. CUs
  • Spent 6.5% more $
  • 5.1% more often

By the way, if 68% of U.S. CUs are pet parents then their annual Pet Food Spending is $424.63. Here’s a recent rolling history.

2014 marks the beginning of the Super Premium era. It began in the 2nd half of 2014 with the 25>34-year-old Millennials making the 1st move. In 2015 the Baby Boomers got on board in a big way, producing a $5.42B increase in spending, the biggest lift in history at the time. 2016 saw a spending change that was accelerated by the high prices of Super Premium Pet Foods. After consumers upgraded to a more expensive pet food, their #1 priority became, “Where can I buy it for less?” Value Shopping on the internet was a major contributing factor in the big spending drop in 2016.

2017 was an up year which should have been due to a “must have” trend. However, a closer look at the data showed that the $4B increase in Pet Food spending in 2017 came not from a new trend but from a deeper demographic penetration of Super Premium foods. Value shopping in a highly competitive market, especially on the internet, had made Super Premium pet foods more accessible to a broad swath of consumers.

Like Pet Food, human behavior has changed over the years in regard to our pets. In the 90’s, Pet Owners became Pet Parents. Then, after 2000 we began truly humanizing our pets, which is very accurately reflected in the evolution of Pet Food. We became more focused on fulfilling the health needs of our pets, beginning with the first move to premium foods in 2004. This radically increased after the Melamine scare in 2007. Now consumers read pet food labels, research ingredients and expect their pet foods to meet the same quality standards as the best human foods. This was very evident in 2018. It should have been a year of increased spending but the consumers’ reaction to the FDA grain free warning threw the pattern out the window. In 2019 the warning lost credibility. Pet Food spending stabilized in the 1st half of the year and then grew by $2.3B in the 2nd  half. Some Pet Parents began to return to the topline Super Premium Foods while others opted for even more expensive varieties. Also, new groups got on board the Super Premium Express.

After the 2019 recovery came the pandemic of 2020. There is nothing more necessary to a Pet Parent than pet food. This spurred binge buying, especially in the 1st half of the year and drove the biggest annual spending increase in history. However, binge buying doesn’t increase usage and it causes an overstock in home supply. In 2021, Pets “ate down” the extra food so spending fell. Another factor was the ongoing strong search for value & convenience which continues to drive many consumers online. In 2022, Pet Food spending returned to a more normal pattern. There were 0.5% more CUs. They spent a little more and bought a little more frequently. Inflation was a big factor in the spending increase in transactions. The increase in frequency came from more regularly scheduled deliveries and in an effort to lower the transaction price due to skyrocketing inflation, some pet parents also downsized their purchases but bought more often.

The growth of Pet Food spending since 2014 reflects the rise of Super Premium but also another trend – the spectacular increase in the number and use of Pet Medications and Supplements, which are often produced in the form of treats. Together, the strength of Pet Food and these product subcategories reflect the Pet Parents’ absolute number 1 priority –

the health, wellbeing and safety of their Pet Children, which starts with the quality of their food.

Now let’s look at some specific 2022 Pet Food Spending Demographics. The first is income. Prior to 2014 it was less of a factor in Food spending. However, the move to Super Premium has brought it more to the forefront. In 2015 the spending of the over $70K group exceeded the <$70K for the first time. In 2022, <$70K had a bigger lift but was still only 65% of the $70K> spending. The $30>70K group had the biggest increase and $70>100K had the only decrease. In 2015, the 50/50 divide on Pet Food spending was about $70K. By 2020, it was up to $107K, breaking the $100K barrier for the first time. In 2021 it fell to $92K and is down to $91K in 2022. That’s about 3% less than the average CU income but 22% more than the median income. Higher income is still important in Pet Food spending. Although all incomes over $40K have 100+% performance (Share of $/Share of CUs) the $150K> group is by far the best at 159%. The chart below shows annual spending for major income groups from 2017>2022. This should put the 2022 numbers into better perspective.

In 2022, only one group spent less on Food. 2017 was the only year since 2015 with spending growth in every major income group. Since 2017, we have seen the major impact on various groups by outside influences. In mid-2018 it was the FDA grain free warning. In 2020 it was the pandemic and in 2022 it was +10.2% inflation. The high inflation means that any demographic segment with an increase below 10.2% actually bought less Pet Food in 2022.

2022 National: $288.75 per CU (+11.9%); $38.69B; Up $4.29B (+12.5%);  2017>2022: Up $7.58B (+24.3%); Avg: +4.4%

The biggest lift came from the $30>70K group, which is surprising. The only drop in spending was by the middle income $70>100K group. This comes after their big lift in 2021. The $100>150K group is back to normal after their 2020 binge.

Here are 2022 specifics:

  • Under $30K: (23.8% of CU’s) – $158.24 per CU (+11.0%) – $4.75B – Up $0.08B (+1.7%). Obviously, this group is very price sensitive. The number of CU’s was down 6.4% in 2022 after a small increase in 2021. Their CU count is down 17.0% from 2015. Their spending lift in 2022 was primarily due to higher prices. The average CU bought a little more Pet Food but paid a lot more. They are still fully committed to their Pets. This is evidenced by the fact that they spend 1.00% of their Total CU expenditures on their pets, including 0.45% on Pet Food. The national averages are: Total: 1.05%; Food: 0.40%.
  • $30K>$70K: (28.9% of CU’s) – $260.52 per CU (+34.0%) – $10.54B – Up $2.52B (+31.4%). They are also very price sensitive so inflation had an impact. Their average income was up 0.8% while the national average increased by 7.5%. They had a 2.2% decrease in the number of CUs but a 4.6% increase in CU spending. However, their Pet Food spending was far stronger with a huge increase by all segments. The $30>39K group lost 7% in CUs but increased CU spending by 31.7% and $ +$0.44B (+21.7%). The $40>49K group fell -1.8% in numbers but they increased their CU spending by 33.7% and $ grew by +$0.84B (+40.5%). $50>69K gained 0.9% in CUs and spent 34.8% more per CU on Pet Food. This pushed their Total Pet Food Spending up $1.23B (+31.5%). This low-income group is very committed to their pets and quality food. They spent 1.09% of total expenditures on their pets and 0.5% on Pet Food.
  • $70K>$100K: (14.1% of CU’s) – $302.80 per CU (-3.5%) – $5.81B – Down $0.40B (-6.5%). The only $ drop. This group has a regular up/down spending pattern. They committed to Super Premium food in 2017 but they became very sensitive to outside influences – the FDA warning in 2018, COVID in 2020 and now inflation in 2022. They have big family responsibilities and are under considerable monetary pressure. We’ll see if they make a comeback in 2023.
  • $100>150K (15.5% of CU’s) – $325.92 per CU (+12.5%) – $6.71B – Up $1.25B (+23.0%). This group was the driver in the binge buying of Food in 2020. It was pure emotion, but they had the $ to do it. In 2021, they “ate down” the excess inventory but the drop was $0.46B more than the 2020 lift. In 2022, mostly thanks to inflation and a 9.6% increase in CU’s they had a 23% increase in $. Their Pet Food spending is now 13.3% above pre-pandemic 2019.
  • $150K> (17.7% of CU’s) – $457.91 per CU (-5.8%) – $10.89B – Up $0.83B (+8.3%). Their Pet Food CU spending fell by -5.8% after a 68.6% lift in 21 but a 12.4% increase in CUs pushed their total $ up 8.3%. However, when you factor inflation into the numbers, they actually bought 1.7% less pet food. Inflation has made comparisons more complex. In performance, share of $/share of CUs, their score of 159.3% is the clear winner. Higher income is still important.

The pandemic certainly caused turmoil. First, the fear-based binge buy which caused a record increase in 2020. This couldn’t be repeated so spending fell in 2021. Spending returned to more normal, positive behavior in 2022 as only the $70>100K group spent less. The biggest lifts came from $30>70K and groups over $100K. Inflation was high at 10.2% but the welfare of their Pet children mattered more than the price so most Pet Parents just paid more. It is significant in this year of record inflation that the 50/50 income divide in Pet Food $ still fell slightly from $92K to $91K.

Now, Spending by Age Group…

2022 National: $288.75 per CU (+11.9%); $38.69B; Up $4.29B (+12.5%);  2017>2022 – Up $7.58B (+24.3%); Avg: +4.4%

The 25>34 yr-old and 75+ yr-old groups spent less, while all other age groups spent more.

  • 55>64 (18.2% of CU’s) – $359.76 per CU (+30.4%) – $6.75B – Up $1.86B (+27.5%). This group has been at the forefront of recent major spending swings. In 2015 they upgraded to Super Premium. In 2016 they shopped for a better price. In 2017 they led a deeper penetration of the upgrade. In 2018 they had a -$3.5B reaction to the FDA warning. They began to recover in 2019 but then came 2020, which saw a huge lift in spending. There were 3 major factors. First was panic, binge buying due to pandemic. They also were still recovering from the FDA warning. Finally, the pandemic caused the loss of over 2 million <25 CUs. Many of them moved back with their parents bringing their pets with them. In 2021, there was a big drop in $ as they “ate up” the “panic” extra stock and many of their kids moved out again. 2022 brought another big lift as 2.3% fewer CUs spent 22.8% more $, 6.2% more often.
  • 45>54 (16.9% of CU’s) – $353.45 per CU (+20.8%) – $7.87B – Up $1.29B (+19.6%). This group is #1 in income and total CU expenditures. Up until 2015 they were #1 in Pet Food spending. They bought premium food but didn’t “buy in” to Super Premium until 2017. They were negatively impacted by the FDA warning, but they rebounded stronger than any other group. In 2020, their spending dropped significantly. It is likely that much of the decrease was due to value shopping on the internet. In 2021, they opted for even more expensive food, spending 24% more on each purchase. In 2022 they had 0.9% fewer CUs, but spent 12.8% more, 7.0% more often. The result: +19.6% more $.
  • 65>74 (16.2% of CU’s) – $314.66 per CU (+7.8%) – $6.64B – Up $0.51B (+8.4%). This group is all Baby Boomers. They are starting to retire but many are still working (0.7 per CU). Their Pets are a major priority. They spent 1.26% of their total CU expenditures on their pets and 0.5% on Pet Food, the highest percentages of any group. They are also the only group to spend more on Pet Food every year since 2016. In 2022, 0.5% more CUs spent 2.8% more $, 4.9% more often. Inflation affected them as an 8.4% increase was really a -1.7% decrease in the amount purchased.
  • 35<44 (17.0% of CU’s) – $302.24 per CU (+20.9%) – $7.18B – Up $1.56B (+27.6%). They are 2nd in income and CU spending but have the biggest families. Their spending pattern matches the 45>54 yr-olds but is usually less volatile. 5.5% more CUs spent 17.1% more $, 3.3% more often. They had the 2nd biggest $ lift and are now 3rd in Food $.
  • 25>34 (15.6% of CU’s) – $224.30 per CU (-0.5%) – $80B – Down $0.11B (-2.2%). In the early Super Premium years their spending pattern often foreshadowed the overall market for the following year. In pandemic 2020 they spent 22.3% more then essentially held their ground in 2021. In 2022, 1.7% fewer CUs spent 7.9% less $, 8.0% more often.
  • 75> (11.4% of CU’s) – $152.14 per CU (-41.8%) – $2.23B – Down $1.53B (-40.8%). Both the effort and the expense of Pet Parenting become issues as we reach 75+. High inflation affected them the most. They strongly moved to Super Premium Food in 2021. In 2022, many downgraded as 1.6% more CUs spent 41.8% less $, 0.2% more often.
  • <25 (4.7% of CU’s) – $198.10 per CU (+101.5%) – $1.37B – Up $0.72B (+108.6%). Many moved in with other adults or got married. They also added a lot of pets. This is apparent as 5.1% less CUs spent 109.6% more $, 4.4% more often.

In 2020 the 55>64 yr olds binge bought Pet Food. In 2021 their spending naturally plummeted, the only decrease by any age group. In 2022 we had high inflation. It affected everyone but only 25>34 and 75> spent less $ on Pet Food and only 3 groups bought less product (add 65>74 to the other 2). Quality pet food remains a high priority for Pet Parents.

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

The first thing that you notice is that the biggest increases are almost always radically larger than the biggest decreases. We should also note that whether you rent or own your home, you spent more on Pet Food in 2022 than in 2021. The lift was also widespread as 82% of 96 demographic segments spent more in 2022. These are good signs that Pet Food spending is doing well.

You also see that half of the 24 segments flipped from last to first or vice versa. Only 2 held their position from 2021. 7 winners flipped from last to 1st and 2 held their position. 5 losers flipped to last from 1st in 2021.

Most of the winners are the “usual suspects”:

  • Suburbs 2500>
  • White, Not Hispanic
  • 2 Earners
  • Homeowners, w/Mtge
  • Mgrs & Professionals
  • Gen X
  • 55>64
  • Married, Child 18>
  • $100>149K

There is only 1 surprise winner – High School Grads or Less

These winners indicate a return to more normal spending patterns but you should also consider that most have a higher income so they would be less impacted by strong inflation.

Among the losers, most of the segments are not unexpected. There are some that were obviously affected by  inflation:

  • No Earner
  • Retired
  • Born <1946
  • 75>
  • $70>99K.

There were a few surprises – Adv. College Degree, 2 People and Married Couple Only

The pandemic trauma may now be over. The $4.29B (+12.5%) increase was widespread across 82% of 96 demographic segments. However, 10.2% inflation is a new problem. The amount of Pet Food sold in 2022 was really only +2.2% from 2021 and only 59% of segments bought more. Pet Food spending is now up $7.5B from 2019, +24.0%, a growth rate of 7.4%, 40% more than the 5.3% from 2014>19. The downside is that 46% of that growth came from inflation…almost all in 2022. Real 19>22 growth: 4.1%. Inflation fell below 10% in August 2023. We’ll see what happens to prices & spending.

Petflation 2023 – August Update: Drops 24% to +6.6% vs 2022

Inflation is no longer a headline, but it is still news. 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 July 2023. August prices grew 0.4% from July and the CPI was +3.7% vs 2022, up from +3.2% last month – 2 straight months of increases. However, Grocery inflation continues to drop. After 12 straight months of double-digit YOY monthly increases, grocery inflation is down to +3.0%, 6 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.

Total 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 6.6% in August it is still 1.8 times the national rate of 3.7%. 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 August 2021 to August 2023. We will use December 2019 as a base number so we can track the progress from pre-pandemic times through an eventual recovery. Inflation is a complex issue. This chart is designed to give you a visual image of the flow of pricing. You can see the similarities and differences in patterns between segments and compare them to the overall U.S. CPI. The current numbers plus yearend and those from 12 and 24 months earlier are included. This will give you some key waypoints. In August, Pet prices were down from last month overall and in all segments but Non-Vet Services.

In August 2021, the CPI was +6.5% and Pet prices were +2.8% from December 2019. Like the U.S. CPI, prices in the Services segments generally inflated after mid-2020, while Product prices generally deflated until late 2021. Then Petflation took off. Food prices consistently increased but the other segments had mixed patterns until July 2022, when all increased. In Aug>Oct Petflation accelerated. In Nov>Dec, Services & Food prices continued to grow while Vet & Supplies prices stabilized. In Jan>Apr, prices grew every month except for 1 dip by Supplies. In May Products prices grew while Services slowed. In June/July this pattern was reversed. In August all but Services fell. Petflation has been above the CPI since November 22.

  • U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 2021 and continued to grow until flattening out in Jul>Dec 2022. Prices turned up again in Jan>Aug but 35% of the overall 19.5% increase in the 44 months since December 2019 happened in the 6 months from January>June 2022 – 14% of the time.
  • Pet Food – Prices stayed generally below Dec 2019 levels from Apr 20 > Sep 21 when they turned up. There was a sharp lift in Dec 21, and it continued until the Jun>Aug 23 dip. 93% of the 22.7% increase has occurred since 22.
  • Pet Supplies – Supplies prices were high in December 2019 due to the added tariffs. They then had a “deflated” roller coaster ride until mid-2021 when they returned to December 2019 prices and essentially stayed there until 2022. They turned up in January and hit an all-time high, beating the 2009 record. They plateaued from Feb> May, turned up 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, set a record in May, then fell in Jun>Aug.
  • 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 then turned up again in Jun>Aug.
  • Veterinary – Inflation has been pretty consistent in Veterinary. Prices turned up in March 2020 and grew through 2021. A pricing surge began in December 2021 which put them above the overall CPI. In May 2022 prices fell and stabilized in June causing them to fall below the National CPI. However, prices turned up again and despite some dips they have stayed above the CPI since July 2022. In 2023 prices grew through May, stabilized, then fell in August.
  • Total Pet – The blending of patterns made Total Pet appear calm. In December 2021 the pricing surge began. In Mar>June 2022 the segments had ups & downs, but Petflation grew again from Jul>Nov. It slowed in December, turned up Jan>May 23, then fell in Jun>Aug. Except for 5 individual monthly dips, prices in all segments increased monthly Jan>Jun 23. In Jul>Aug there 5 more dips but Petflation has stayed above the CPI since November 2022.

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>23 & 19>23. Petflation was well below double digits at 6.6% in August but is still 1.8 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 +0.4% vs July and were up 3.7% vs August 2022. The Grocery increase is down again, to +3.0% from +3.6%, but still impacts consumers. 4 of 9 categories had decreased prices from last month, compared to 3 in July, 5 in June, 3 in May and 1 in April. All of the 4 decreases were from the Pet Industry. Only Pet Services had an increase. The national YOY monthly inflation rate for August is up from July but is still much lower than the 21>22 rate. All but 2 categories – Non-Vet Services and Haircuts have a similar yearly pattern. For Non-Vet Pet Services, the 22>23 inflation rate is not just higher than the 21>22 rate. It is the highest rate in any year since 2019. In our 2021>2023 measurement you also can see that over 65% of the cumulative inflation since 2019 occurred from 21>23 for all segments but Pet Services, Medical Services, Haircuts/Personal Services and the U.S. CPI. We should note that these individual segments are all service expenditures. This demonstrates the strong influence of all Services expenditures on the National CPI. Pet Products are unique. The 21>23 inflation surge provided over 96% 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 +0.4% from July. The YOY increase rose to +3.7% from 3.2%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 85% higher than the target. 2 lifts in a row after 12 straight declines is not good news. It’s good that the current inflation rate is below 21>22 but the 21>23 rate is still 12.2%, 62% of total inflation since 2019. How many households “broke even” by increasing their income by 12% in 2 years?
  • Pet Food– Prices are -0.1% vs July and +8.7% vs August 2022. They are also 2.9 times the Food at Home inflation rate – not good news! The YOY increase of 8.7% is being measured against a time when prices were 13.0% above the 2019 level, but that increase is still 2.2 times the pre-pandemic 3.9% increase from 2018 to 2019. The 2021>2023 inflation surge actually generated 100.4% of the total 22.8% inflation since 2019.
  • Food at Home – Prices are up +0.1% from July. The monthly YOY increase is 3.0%, down from 3.6% in July and considerably lower than Jul>Sep 2022 when it exceeded 13%. The 25.9% Inflation for this category since 2019 is 32% more than the national CPI and remains 2nd to Veterinary. 65% 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 plummeted -2.6% from July. This produced deflation of -0.6% vs August 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 81% of the total price increase since 2019. They reached an all-time high in October 2022 then prices deflated. 3 straight 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 then fell in June>August.
  • Veterinary Services – Prices are down -1.2% from July. They are +8.4% from 2022 and fell back to 2nd place behind Food (+8.7%) in the Pet Industry. However, they are still the leader in the increase since 2019 with 27.7% compared to Food at home at 25.9%. 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 2% from July and are -2.1% vs 2022. Prices have now deflated for 4 straight months. Medical Services are not a big part of the current surge as only 34% of the 2019>23 increase happened from 21>23.
  • Pet Services – Inflation slowed in 2020 but began to grow in 2021. August 23 prices were +0.9% from July and +7.2% vs 2022, which is up from 6.3% in July but much lower than 8.0% in March. Initially their inflation was tied to the current surge, but it may be becoming the norm as only 58% of the total since 2019 occurred from 21>23.
  • Haircuts/Other Personal Services – Prices are +0.4% from July and +5.1% from 2022, the 2nd highest rate since 2019. However, inflation has been rather consistent so just 45% of the inflation from 19>23 happened from 21>23.
  • Total Pet– Petflation is now 35% lower than the 21>22 rate, but 1.8 times the National CPI. For August, +6.6% is the 3rd highest rate since 1997 (2022: 10.1%; 2008: 9.3%). Vs July, prices fell for all but Services so Total Pet was -0.9%. A Jul>Aug decrease has happened in 13 of the last 24 years so it was not a surprise. Food & Veterinary are still the Petflation leaders, but all segments have an influence in the overall numbers. 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 2022 to 2023 is the biggest for 4 of 9 categories – All Pet. The 22>23 rate for Haircuts is equal to 21>22. However, the Total CPI, Pet Supplies, Medical Services and Food at Home are significantly down from 21>22. The average annual increase since 2019 is 4.4% or more for all but Medical Services (2.9%) and Pet Supplies (2.6%).

  • U.S. CPI – The current increase is down 46% from 21>22 and only 2.3% more than the average increase from 2019>2023, but it’s double the average annual increase from 2018>2021. 69% of the 19.0% 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 1st half of 2021 kept YTD prices low then prices surged in 2022. 95.6% 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 49%. You can see the impact of supply chain issues on the Grocery category as 73% of the inflation since 2019 occurred from 2021>23.
  • Pets & Pet Supplies – The inflation rate is down to 4.3% as prices fell again in August. Prices deflated significantly in both 2020 & 2021 which helped to create a very unique situation. Prices are up 10.8% from 2019 but 109% of this increase happened from 2021>23. Prices are up 11.8% from their 2021 “bottom”.
  • Veterinary Services – They are still #1 in inflation since 2019 but they are tied for the 2nd highest rate since 2021. At +6.4%, they have the highest average annual inflation rate since 2019. Except for a sight slowing in 2020, inflation has consistently increased since 2019. 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 been deflating and are now at 0.2% YTD, which is 99% below the pre-pandemic 2018>19 rate.
  • 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. YTD August grew a little from 6.9% to 7.0%. Interestingly, although the rates are not as high, they have the exact same annual inflation pattern as Veterinary. The Services segments in the Pet Industry are definitely unique.
  • 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+%, 90% higher than 18>19. Consumers are paying 21% more than in 2019, which usually reduces the purchase frequency.
  • Total Pet – There were two different patterns. After 2019, Prices in the Services segments continued to increase, and the rate grew as we moved 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 continued to climb 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. The Services segments have also had ups & downs but have generally inflated. The net is a YTD Petflation rate vs 2022 of 9.5%, 2.1 times the National rate. In May 22 it was 5.8% below the CPI.

Petflation is slowing, but still strong. Petflation dropped from 8.7% in July to 6.6% in August. This is well below the record 12.0% set in November, but still the 3rd highest rate for the month. More bad news is that 9 of the last 13 months have been over 10% and the current rate is still 4.1 times more than the 1.6% average rate from 2010>2021. It’s also 1.8 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 6.6% from 2022 but they are up 17.4% from 2021 and 21.8% 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 may be starting in Products. The Pet Food inflation rate is dropping, and Pet Supplies prices are even deflating. It’s just a start. Let’s hope that it continues. We’ll see what happens.