Study: COVID-19 Pandemic May Cause Pet Sales to Drop
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Despite the pet industry’s strengths, the coronavirus (COVID-19) pandemic is projected to cause a 17 percent drop in retail sales of pet products and services in 2020, according to market research firm Packaged Facts. This is compared with the 5 percent growth anticipated prior to the pandemic.
These projections, according to officials, translate to a drop from $95 billion in 2019 sales to $78.5 billion in 2020. However, officials project a substantial though partial rebound in 2021, given the underlying strength of the pet industry.
The forecast, as outlined in U.S. Pet Market Outlook 2020-2021, factors in double-digit sales declines in 2020 for three out of the four pet industry sectors: non-medical pet services, which are expected to drop 47 percent, the veterinary sector and non-food pet supplies.
Pet food, the largest pet industry sector, is forecasted to grow 4 percent in 2020, compared with a 6 percent growth forecast before the pandemic. Pet food sales will reflect, as occurred in the Great Recession, some trading down to value and store brands, officials said.
Increased ownership rates for dogs, another pattern evident in the wake of the Great Recession, “might also help soften the blow of pet industry losses,” said David Sprinkle, research director for Packaged Facts, which is headquartered in Rockville, Md. “And in the long term, losses aren’t characteristic to the U.S. pet market.”
Pet ownership and shelter adoption rates may also get a boost since the national population is now “largely isolated, staying at home and well aware of the mental and physical health benefits of pet ownership,” officials said.
“The U.S. pet industry comes off a strong performance in 2019, with overall sales of products and services rising 5.4 percent despite the maturity and impressive scope of the pet industry,” officials said in a statement. “A continued boom in pet product e-commerce delivered incremental gains in 2019, while a larger-than-expected pet food sales increase in mass channels bolstered the overall market.
“Online retailers are well-positioned to continue gains in shares and sales,” officials continued. “A pre-coronavirus pandemic surge in internet sales of pet products—leading to a platinum-plated IPO for Chewy.com—spurred massive pet market investment in e-commerce logistics, which should help shore up the products side of the industry in the coming months.”
This advantage is important because the shift to e-commerce has grown the overall pet products sector, and not “merely cannibalized sales” from brick-and-mortar, according to officials.
The online share of overall pet product sales is expected to reach 24 percent this year and 26.5 Percent by 2024, officials said.