For three years, the US economy and American households have been buffeted by COVID-19 shutdowns and illnesses, patches of job insecurity despite low unemployment rates, and record price inflation only partially offset by wage increases. In addition, the Federal Reserve’s ongoing efforts to curb inflation (and wage growth) through historic increases in its benchmark interest rates have thrown a curveball at stock market performance, real estate sales, and financial system stability. Such factors have left the US economy problematically fitful for business investment or consumer spending, with an ongoing debate over will there/won’t there be a significant recession or “hard landing.”
Pet owners have not been spared the effects of price inflation. During 2022, the consumer price index (CPI) – the measure of inflation most directly related to consumer spending – was up 10.2% for pet food versus full-year 2021, and 9.2% for pets/pet products, according to the US Bureau of Labor Statistics (BLS). The January 2023 figures were equally stark, with pet food up 15.1% over January 2022, and pets/pet products up 7.2%.
Packaged Facts November 2022 and February 2023 surveys corresponding show that 75% of pet owners are concerned about rising prices for pet food, such that high pet food prices have pushed past pet health care cost as the most significant challenge faced by pet owners, at 42% of dog owners and 44% of cat owners.
Although inflation moderated somewhat at the end of 2022 and the first months of 2023, nobody and no market is out of the woods. Packaged Facts expects inflationary conditions to persist through 2023, factoring in continued supply scarcities due to issues carrying over from the COVID-19 pandemic, including shipping backlogs and reduced production.
In our just-published U.S. Pet Market Outlook 2023-2024
, therefore, Packaged Facts projects retail pet product sales growth at 8.6% for 2023—still robust, but primarily driven by inflation and down from 12.1% growth in 2022.
About the blogger
: David Lummis is a Senior Pet Market Analyst at Packaged Facts, a leading market research firm.