Report: Pet Care Services to Take Hardest Blow in Pet Market in COVID-19 Pandemic
Oleg Gamulinskiy from Pixabay
The pet market may be resistant to recessions, but it is not immune, particularly within the non-veterinary pet care services sector, according to market research firm Packaged Facts. The current coronavirus (COVID-19) pandemic illustrates this, as shown in “U.S. Pet Market Outlook 2020-2021.”
“Non-medical pet care services, a $10 billion sector, will take the hardest short-term blow,” said David Sprinkle, research director at Packaged Facts in Rockville, Md.
Pet boarding, which accounts for more than a third of the non-medical pet care services sector, will especially be affected, according to Sprinkle.
This impact is inevitable at least through Q2 2020 due to travel curtailment and to the cancellation of larger-scale events, according to the report. The impact is also due to practices of social distancing, staying home, and avoiding non-essential outings and contact with others in an effort to help flatten the curve of the coronavirus pandemic’s spread.
Pet walking/sitting and, to a lesser degree, pet grooming services will also be affected, according to the report.
Even assuming a best-case scenario of a sharp but relatively short impact from the coronavirus pandemic, with fiscal countermeasures boosting economic recovery in the second half of 2020, Packaged Facts officials said that they expect retail revenues for pet boarding to grow only 2 percent in nominal terms this year, compared with about 5 percent annually in recent years, and with 6 percent growth in 2020 for pet food and treats.
“Assuming this best-case scenario, additionally, a look back at the Great Recession of 2008-2009 is somewhat reassuring in terms of pet industry impacts, especially in the longer-term,” officials said in a press release. “In the immediate aftermath of the Great Recession, average household spending on pet products and services fell 5 percent in 2009 and by 12 percent in 2010, before rebounding to 4 percent–5 percent growth in 2011 and 2012, according to Bureau of Labor Statistics Consumer Expenditures Survey (CES) data.”
Throughout the Great Recession, pet ownership rates for dogs and cats remained solid, officials added, significant because they are the “bedrock” for the pet industry.
“Dog ownership rates notched up slightly to 50 percent of households and then kept advancing, while cat ownership rates maintained their longer-term pattern of hovering in the 25 percent of households range,” officials said.
Packaged Facts’ ongoing surveys of pet owners further show that “they are not quick to the trigger in adjusting their pet product spending.” From 2011, when the economy was climbing out the great recession, through 2017, when the Great Recession had passed, there was more constancy than fluctuation in the percentage of pet product shoppers who agreed or disagreed that they were “spending less on pet products because of the economy,” according to officials. Over this tracking period, moreover, the share who strongly disagreed that they were spending less outweighed the share who strongly agreed, officials said.
For pet owners, as with U.S. consumers in general, economizing involves tactical shopping behaviors including trading down across channels and brands, shopping multiple channels for bargains, and increased usage of coupons and private labels, officials noted. While these behaviors tend to suppress the price points paid, officials reported that the premiumization of pet products in this age of the “pet parent” has often meant getting better deals on better products, rather than paying less for absolute essentials.
“On the consumer end of the market, with Americans facing uncertainty at a new scale and spending more time at home, the ‘pets as family’ mindset should therefore tend to support pet market spending, and may help reverse any spending cuts sooner rather than later, once the height of the pandemic is in the nation’s rear-view mirror,” officials said.