Packaged Facts, well-known analysis covering the pet industry along with food and beverage, released a report showing a decrease in pet sales. According to the company, the pet industry is famously recession resistant, yet not even the new ‘pet parent’ sensibility can make the pet industry recession proof in the midst of the COVID-19 pandemic.
The company stated, “In its just-published US Pet Market Outlook 2020-2021, market research firm Package Facts forecasts that total US retail sales of pet products and services will decline by 17 percent in 2020, compared with the 5 percent growth anticipated prior to the coronavirus pandemic. These projections translate to a drop from $95 billion in 2019 sales to $78.5 billion in 2020. The firm projects a substantial though partial rebound in 2021, given the underlying strength of the pet industry.
The US Pet Market Outlook 2020-2021 included: “These forecast factors in double-digit sales declines in 2020 for three out of the four pet industry sectors,” stated David Sprinkle, Research Director for Packaged Facts. “Non-medical pet service sales are expected to suffer the sharpest drop in 2020, at 47 percent, due primarily to the link between pet boarding services and business/leisure travel. Also projected to drop in 2020 sales are the veterinary sector and non-food pet supplies, reflecting in part the discretionary nature of some of the services and products involved.”
Another excerpt from the Market Outlook revealed, “Somewhat mitigating the overall market loss will be continued (though tapered) growth in essentially non-discretionary pet products, primarily pet food and cat litter. Pet food, the largest pet industry sector, is forecast to grow by 4 percent in 2020, compared with a 6 percent growth forecast before the COVID-19 pandemic impact. Pet food sales will reflect, as occurred in the Great Recession, some trading down to value and store brands.”
“Increased ownership rates for dogs, another pattern evident in the wake of the Great Recession, “might also help soften the blow of pet industry losses,” according to David Sprinkle, research director for Packaged Facts, “and in the long term, losses aren’t characteristic to the US pet market.” Ownership (and adoption from pet shelters) of the most companionable and pet-table pets may get a boost among a national population that is now largely isolated, staying at home, and well aware of the mental and physical health benefits of pet ownership.”
“The US pet industry comes off a strong performance in 2019, with overall sales of products and services rising 5.4 percent despite the maturity and impressive scope of the pet industry. A continued boom in pet product e-commerce delivered incremental gains in 2019, while a larger-than-expected pet food sales increase in mass channels bolstered the overall market.”
“Online retailers are well-positioned to continue gains in shares and sales. A pre-coronavirus pandemic surge in Internet sales of pet products—leading to a platinum-plated IPO for Chewy.com—spurred massive pet market investment in e-commerce logistics, which should help shore up the products side of the industry in the coming months. This advantage is doubly important because the shift to e-commerce has grown the overall pet products sector, and not merely cannibalized sales from brick-and-mortar. Packaged Facts projects the online share of overall pet product sales to reach 24 percent this year and 26.5 percent by 2024.”