Petflation 2024 – November Update: Jumps Up to +2.9% vs 2023

The monthly Consumer Price Index peaked back in June 2022 at 9.1% then began to slow until turning up in Jul/Aug 2023. Prices fell in Oct>Dec 23, then turned up Jan>Oct 24. There was a -0.1% drop in prices from last month, but the CPI rose to +2.7% from +2.6% in October (due to a bigger drop in 23). Grocery prices fell -0.1% from October, but inflation grew from 1.1% to 1.6%, again due to a big drop in 23. However, after 12 months of double digit % YOY monthly increases, grocery inflation has now been below 10% for 21 months. Even minor price changes can affect consumer pet spending, especially in the discretionary pet segments, so we will continue to publish monthly reports to track petflation as it evolves in the market.

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

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

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

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

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

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

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

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

Now, let’s look at the YTD numbers.

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

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

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