Coronavirus Pandemic Curbs 2020 Revenues for Pet Care Services, reports Packaged Facts
ROCKVILLE, Md., March 19, 2020 /PRNewswire/ -- The socio-economic impacts of the novel coronavirus pandemic are unprecedented in modern U.S. history and remain unpredictable, but some things are already certain, including economic volatility at a level not seen at least since the Great Recession. While the pet market is famously resistant to recessions, it is not immune, especially in the case of non-medical (non-veterinary) pet care services, as market research firm Packaged Facts reports in its upcoming U.S. Pet Market Outlook 2020-2021.
"Non-medical pet care services, a $10 billion sector, will take the hardest short-term blow," according to Packaged Facts research director David Sprinkle. Particularly affected will be pet boarding, which accounts for over a third of the non-medical pet care services sector, and ties in closely to business and leisure travel.
This impact is inevitable at least through Q2 2020 due to travel curtailment and to the cancellation of larger-scale events, and more generally to the recommended and (increasingly) enforced practices of social distancing, staying home, and avoiding non-essential outings and contact with others, 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. 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 expects retail revenues for pet boarding to grow only 2% in nominal terms this year, compared with approximately 5% annually in recent years, and with 6% 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. In the immediate aftermath of the Great Recession, average household spending on pet products and services fell 5% in 2009 and by 12% in 2010, before rebounding to 4%-5% 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—the bedrock for the pet industry—remained solid. Dog ownership rates notched up slightly to 50% of households and then kept advancing, while cat ownership rates maintained their longer-term pattern of hovering in the 25% of households range.
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 was comfortably in the rear-view mirror, 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." Over this tracking period, moreover, the share who strongly disagreed that they were spending less outweighed the share who strongly agreed.
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. While these behaviors tend to suppress the price points paid, Packaged Facts reports 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.
Preorder U.S. Pet Market Outlook 2020-2021
Insights from this press release are based on Packaged Facts' upcoming U.S. Pet Market Outlook 2020-2021, the latest report in our annual flagship series.
To preorder the report contact Research Specialist Jeff Miller at [email protected]. Find more market research on pet products and services by visiting https://www.packagedfacts.com/pet-products-services-c124/.
Download Our Free White Paper: Assessing Coronavirus Pandemic Impacts on the Pet Industry
With market patterns during and after the Great Recession as context, this free white paper provides Packaged Facts' initial assessment of the coronavirus pandemic's likely effects on the U.S. pet market, assuming a best-case scenario of a short but sharp socio-economic impact.
Download your copy today by visiting https://www.packagedfacts.com/Content/Assessing-Coronavirus-Pandemic-Impacts-on-the-Pet-Industry.
About Packaged Facts
Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.
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