by Shannon Landry
April 11, 2025
While the US pet market remains more insulated from tariffs than many other industries, a decline in consumer sentiment and discretionary spending could still pose challenges.
The pet market is well-positioned to weather the tariff storm that is now raging in the US, with many segments of the industry insulated against this kind of upheaval. Since the massive recalls of the mid-2000s due to contaminated, imported meat, pet food and treats marketers have been working towards not just US-made but US-sourced products. Because of shipping constraints on heavy ingredients, the cat litter market has long sourced much of its materials in the US. And marketers of durable products, who have been battling inexpensive, foreign-made products for the past decade, may actually get some relief in this environment. Although wet pet foods packaged using imported tinplate steel cans may get more expensive to manufacture, these products are the exception rather than the rule in the overall pet market.
One question that remains unanswered, however, is how pet owners will react to the whiplash executive orders that have been handed down with increasing unpredictability. Pet owners who have money in retirement accounts have watched as these savings have plummeted in recent days. Those who live paycheck to paycheck have heard how the prices of many consumer goods are expected to skyrocket. Many have lost jobs, or at least felt the pressure of tenuous employment situations. And all of them have been left guessing at what will be the next announcement to come from Washington.
The pet market is known for its resilience, but all of these surprises, on top of the past several years of economic instability and high inflation, could result in some pet owners changing their purchasing habits, both what they buy and where they buy it. Packaged Facts survey results have shown that many have already begun the belt tightening, and the industry is left to wonder if that is just the beginning of a reduction in spending. On top of a general trend towards seeking out value, pet ownership, especially dog ownership, has already suffered a blow post-pandemic. Owning pets is closely connected to the state of the economy, and as consumers become more unsettled, the chances of the pet population drifting further downward grow higher.
In Packaged Facts’ January 2025 Survey of Pet Owners, before the most recent tariff announcements, 31% of pet owners report that their ability to buy nonessentials has been negatively impacted by the economic environment, compared with 10% positively impacted. A similar negative skew plays out in their ability to pay monthly bills (29% versus 11%), personal health situation (22% versus 10%), personal job situation (17% versus 12%), and housing situation (18% versus 11%). The survey also shows that high prices have caused “significant challenges” for pet parents across pet product and service sectors.
As investment bank Cascadia Capital observes in its Winter 2025 Pet Industry Overview: “In the past year, pet CPG brands have been more aggressive about price increases than their non-pet peers against a backdrop of consumer budget tightening. Robust pet industry price growth underpins the category’s perceived resistance to macro environmental factors and the strong pull of trends towards pet humanization and wellness. However, this may become an Achilles heel for the industry as excessive cost of ownership (especially in services) is increasingly an impediment to pet ownership growth.”
Because the pet industry is so dependent on pet owners’ willingness to spend despite high prices, positive consumer sentiment plays an important role in maintaining sales, and this sentiment is in jeopardy. As of April 2025, economists, the investment community, industry leaders, and consumers are deeply worried about the current administration’s policies, which have upended the world economic order, soured longstanding US alliances, plunged the stock market toward bear territory, and increased the chances of recession or stagflation. As Fortune magazine reported on April 4: “…President Donald Trump’s so-called ‘Liberation Day’ tariffs have analysts in rare agreement that major economic pain is coming, and it’s worse than any of them predicted.” As a result of the upheaval, the University of Michigan’s index of Consumer Sentiment has dropped three months in a row as of March 2025, plunging 12%, with forward-looking expectations placing the April index down 18%, a drop of more than 30% since November 2024.
A key factor to consumers’ dimming optimism is the anticipation that tariffs will increase inflation. Citing Conference Board data, the AP reported on March 25, 2025: “US consumer confidence continued its sharp 2025 decline as Americans’ views about their financial futures slumped to a 12-year low, driven by rising anxiety over tariffs and inflation.” Americans’ short-term expectations for income, business, and the job market fell 9.6 points to 65.2 – the lowest reading in over a decade, under 80 being the threshold The Conference Board considers a potential signal of recession in the near future. With regard to the pet industry, if the market experiences a return to inflationary conditions, dampening sentiment further, pet marketers and retailers alike may be in for a rough road ahead. Other factors impacting the market continue to play out, with affordable housing and mortgage rates one of the top contributors to pet ownership statistics, and immigration and national population trends playing a part as well.
One thing that the pet market has going for it that other consumer markets don’t is pet owners’ willingness to continue spending on their pets even in the face of economic hardship. Packaged Facts surveys have shown that not only will pet owners spend more on products that keep their pets healthy and comfortable, many owners rank their pets’ health and happiness above their own. Cultivating the “pet parent” mentality and keeping pets central to the household are absolutely essential to maintaining the health of the pet industry and propelling it successfully through this political turbulent time.
View additional research and pet market analysis by Packaged Facts on our website. Find a broad range of reports on pet medications, pet health & wellness, pet population and ownership trends, pet food, pet product retail trends, and much more.
About the blogger: Shannon Landry is the Brand Manager for Packaged Facts Pet and a veteran pet market research analyst.
Provide the following details to subscribe.