Shoppers are saving money by purchasing less expensive or generic brands, but owners refuse to scrimp on supplies when it comes to their furry friends. According to a recent PYMNT report, the pet category keeps growing while people continue cutting back on their personal essentials. Big box retailers such as Target, Walmart, and Petco note increased sales and customer loyalty. “Household essentials delivered low single-digit growth, reflecting notable strength in both the health and pet categories, says Christina Hennington, Target’s Executive Vice president and chief growth officer.
- 33 percent of shoppers traded down on personal care products
- 32 percent of consumers downgraded on snacks
- 19 percent of people switched to less expensive merchants for pet food and supplies
Ron Coughlin, Petco CEO, noted that the chain’s loyal customers are shopping more frequently. “Our customer loyalty programs continue to build momentum with our highest value customers, and Q1 marked an over 50 percent year-over-year increase in recurring customer revenue, building on our milestone of $1 billion reached in 2022.”
Humanization of Pets Drives Category
The growth of the pet category is fueled by how some owners treat their pets—like humans who are family members. According to Bloomberg Intelligence (BI), the pet industry in the U.S. is projected to increase from $128.6 billion to $195.6 billion by 2030. Due to an intense focus on pet nutrition, veterinary care, and pharmaceuticals, pets are living longer. The company estimates the annual cost of owning a dog is $1520, and caring for a cat is $950. “Consumers are willing to pay more for their pets, with the pet food market having the potential to grow more than 50 percent from current levels by the end of the decade,” said Diana Rosero-Pena, consumer staples analyst at BI.
- Advancements in pet care may lead to a 13 percent in the elderly dog and cat population
- Spending on products and services for elderly pets will increase over the next decade
- Growth in pet ownership is fueled by younger generations who are starting families
Increasing Demand for Pet Toys
Home improvement retailers who want to enter the category, but opt out of selling pet food, may consider selling toys. Pet owners want their pets to have quality playtime and are willing to spend money on engaging and innovative toys. The range of toys includes plush, interactive puzzles, chew, and many more that can entertain pets. The market is expected to increase by 6.7 percent by 2032 due to rising pet ownership rates. Owners are willing to buy premium toys to promote exercise and address issues such as anxiety or teething. As with other population segments, pet owners also seek eco-friendly, sustainable pet toys to reduce the environmental impact.
- Manufacturers are developing unique and innovative products
- Social media campaigns and celebrity endorsements are fueling the demand
- Sustainable manufacturing practices and eco-friendly materials address environmental concerns
Developing Your Niche Business
How deeply you dive into the pet category depends on the amount of store space available to dedicate to the business. Some home improvement stores carry broad assortments, including specialty pet food, grooming products, toys, and accessories. The segments you choose to sell depend on your customer’s demographics and the price points they are willing to pay. Retailers selling pet products mention customers’ loyalty to specific brands. Pet owners are reluctant to change brands out of concern for their pet’s diet. They are willing to pay higher prices and absorb the rising production costs.
Selling pet products is something independents should consider. It’s an opportunity to improve margins, attract younger shoppers, and diversify your business. These are benefits big box retailers are committed to achieving. John Furner, president and CEO of Walmart, says, “Pets is certainly exciting with some of the things that are coming.”