Focus on Value Resonates in New Normal Economy
The pet industry fared well relative to most consumer packaged goods markets during the recession, but it wasn’t spared altogether.
The U.S. Labor Department continues to release encouraging numbers about the job market. But eight years after the Great Recession of 2007, many U.S. consumers continue to feel its effects and shop more conservatively in America’s “new normal” economy.
In a February 2015 Pew Research Center study, 30 percent of respondents said the recession made a major impact from which their finances have yet to recover. Even more likely to report economic problems were those lower down the economic ladder: 38 percent of those with family incomes of less than $30,000 said their finances have not yet recovered (pew
For pet food and nonfood pet supplies alike, the percentage growth rates are down compared with 10 years ago, with consumer behavior adopted during the recession likely still dampening sales.
U.S. retail sales of nonfood pet supplies rose just 2.5 percent in 2014, while sales of retail channel pet food rose 1.8 percent, according to Packaged Facts’ newest pet market research report, Pet Supplies and Pet Care Products in the U.S., 10th Edition.
Proprietary surveys of pet owners conducted by Packaged Facts confirm that the perception of financial hardship is still being played out in consumer spending on pet products. From 2010 to 2013, consumers who agreed that they were spending less on pet products because of the economy jumped from 27 percent to 35 percent.
The news isn’t all bad, however. As of 2014, that percentage had dropped back to 30 percent, and the percentage of pet owners who disagreed to spending less plummeted from 55 percent in 2010 to 38 percent in 2014.
In another sign that things are looking up, Packaged Facts surveys reveal that between 2011 and 2015, the percentage of pet owners who believe that pet products are becoming too expensive dropped from 74 percent to 64 percent, indicating that a growing number of pet owners might be comfortable revisiting higher-priced products.
Accordingly, in Packaged Facts’ January 2015 survey, 50 percent of pet owners agree that they are spending more on pet products than they used to.
These positive signs are not, however, an indication that marketers can relax their focus on value. To the contrary, it is almost certainly the industry’s increased emphasis on bang for the buck that has kept the market on track and will continue to do so, in products running the price gamut from budget
|David Lummis is the lead pet-market analyst for Packaged Facts, a division of MarketResearch.com. He edited the company’s latest report, Pet Supplies and Pet Care Products in the U.S., 10th Edition (Sept. 2015).|
This article originally appeared in the October 2015 issue of Pet Product News.