With the exception of a slight decline in 2017, non-veterinary pet services have shown slow but consistent growth in recent years. Things changed in 2018 as spending increased dramatically. $1.95 billion To $8.72 billion.
According to John Gibbons, professor of pet business and president of A GPS for Pet Businesses, the number of stores offering pet services is growing rapidly, and consumers value convenience.However, spending has plummeted -$1.73 billion In 2020 due to COVID closures and restrictions. Spending increased in 2021, driving a strong recovery $2.21 billion (+32.0%) new records and hits $9.1 billion, It is also a record. In this report, we drill down into the data to see which groups drove recovery.
(Note: All figures in this report are based on or calculated using data from the U.S. BLS Consumer Spending Survey)
Service spending per consumer unit (CU) in 2021 will be $68.13, up from $52.53 2020. Pet CUs in 2021 (68% of all CUs) spent $100.19.
More specifically, the 32.0% increase in total spending on pet services was due to:
- 1.8% increase in households
- 9.18% increase in spending
- 18.78% more
The chart below provides a visual summary of recent spending on pet services.
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After a strong rise in 2018, spending was virtually flat in 2019. Increased availability and convenience of services has significantly increased spending on services. This came despite a return to the more normal inflation rate of 2.4%. However, inflation rose even higher, at over 2.5%, and spending declined for the first time in 18 months in late 2019. The 2020 pandemic has brought restrictions and closures that have drastically reduced spending. The recovery started in 2021 and accelerated in the second half of that year. Now let’s look at specific demographics of service spending in 2021.
First, by income group.
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As in 2018, all groups increased spending in 2021. However, the biggest rise came from increased income, over $100,000. The under-$70,000 group saw a modest increase, and in fact, spending in 2021 was essentially the same as in 2016. The 50/50 split for service spending in 2021 was $133,000. This is up from $123,000 last year and $125,000 in 2019. Still, much higher than any segment. Income is clearly the main driver of pet service spending.
- <30K (25.5% of CU) – $22.47 per CU (+14.3%) – $0.77B, $0.11B increase (+16.8%) – This segment is getting smaller and tighter, making spending on services less of an option. The rise pushed spending on services from his 2016 to his 2018 levels.
- $30>70K (29.7% of CU) – $38.53 per CU (+7.2%) – $1.53B, $0.06B increase (+4.2%) – Spending in 2020 was $150,000> second only to the group and the only increase. In 2021 he dropped to third place, but he is the only group to increase spending in both 2020 and 2021.
- $70>100K (14.8% of CU) – $52.60 per CU (+25.6%) – $1.04B, $0.22B increase (+26.4%) – Spending for this middle class has been growing slowly but consistently since 2016. Then came the pandemic and spending plummeted in 2020, even below 2016. 2021 has picked up somewhat, but spending is still below he was in 2018 and he was in 2019.
- $100>150K (14.2% of CU) – $97.92 per CU (+55.7%) – $1.86B, $0.67B increase (+56.6%) – Consistently strong growth from 2016 to 2019. 2020 saw the biggest drop of -40%. They’re back in his 2021, but 2018 and he’s underspending in 2019.
- $150K> (15.8% of CU) – $185.52 per CU (+24.5%) – $3.91B, $1.15B increase (+41.6%) – They peaked in 2018 and then declined steadily. Spending increased in 2021. Their spending on his CU services is now nine times as high as he is for other groups, compared to twice that of other groups.
Next, let’s look at spending by age group.
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All age groups except 45-54 will increase their spending on services in 2021. This highest-income group has dropped from the top spot he occupied since 2019 to number three. The biggest lift is from 35 he is 44 and 55 to 64. Here are the details:
- 75> (10.9% of CU) – $31.76 per CU (+37.5%) – $46m – +$12m (+35.6%) This group needs pet services the most, but money is always an issue. 2019 was the biggest increase. In 2020 they gave it all back. 2021 saw a spike in spending and a significant increase in frequency. 1.4% fewer CUs means 4.2% more spending and 32.0% more frequent.
- 65>74 (16.1% of CU) – $63.47 per CU (+33.3%) – $1.36B – $0.39B increase (+40.1%)This group is also very value conscious and growing in numbers. Their spending was very stable from 2016 to 2019. In 2020, it decreased by 20% due to a significant decrease in frequency. In 2021 they are back strong. 5.1% more CUs spent 11.2% more money and 20.0% more often.
- 55>64 (18.5% of CU) $84.25 per CU (+58.5%) – $2.09B – $0.75B increase (+56.3%) After a significant decline in 2017, we started gradually increasing our spending on services. While spending declined in 2020 due to a significant drop in frequency, it has seen a strong recovery and will take the top spot in spending on pet services in 2021. 1.4% fewer CUs 28.5% more spent $, 23.4% increase in frequency.
- 45>54 (16.7% of CU)- $75.57 per CU (+0.3%) – $168m – down $0.02m (-1.2%) Until 2016, this highest-income group was number one in spending on services. Reclaiming the top spot in 2019, he held the top spot in 2020 despite a 20% drop in frequency. In 2021, we increased the frequency, but the spending decreased, and now he is in 3rd place. 1.5% fewer CUs, 8.4% less cost and 9.4% more times.
- 35>44 (17.2% of CU) – $89.32 per CU (+56.9%) – $205m – +$0.78m (+61.3%) Spending exploded in 2018, topping the list with $1 billion increase. 2019 and he has less spending in 2020. 2021 saw the biggest increase, moving him up to second place in service spending. 2.8% more CU spending 18.6% more $,32.3% more.
- 25>34 (15.7% of CU) – $60.85 per CU (+15.1%) – $1.28B – $0.17B increase (+15.4%) This group of millennials “discovered” the services segment in 2018. Their spending declined slowly in 2019 and 2020, but reached a record high in 2021, only due to a significant increase in frequency. 0.2% more CUs spent 6.0% less $ and 22.5% more times.
- <25 (4.9% of CU) – $27.44 per CU (-15.4%) – $0.18B – $0.02B increase (+10.9%) Spending has declined and stabilized since 2018. In 2021 he saw a sharp increase in CU but a sharp drop in frequency. 31.1% more CUs spent 46.7% more $ and 42.4% less times.
In 2020, 62% of the $1.7 billion decline in services spending came from the 55+ age group. In 2021, only the 45-to-her 54-year-old group saw spending decrease, with the largest increase being in the He-35 to He-44 group. However, the 55+ group, he accounted for $1.26 billion (57%) of the record $2.21 billion increase. Older adults have had stronger recovery from the pandemic.
Finally, here are some of the key demographic “movers” that have significantly pushed spending on pet services in 2021. Segments outlined in black are ‘flipped’ from 2020 from beginning to end or vice versa. The red border remains the same. .
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The turmoil in 2021 is due to the fact that none of the segments held their position, with 10 of the 12 categories having at least one reversal. However, unlike 2020, nine segments flipped from last to first, and five categories did not have segments that spent less on services.In fact, 86 out of 96 segments (90 %) spend more on services. This was up from the 2018 high of 88% and a big change from 2020, when 79% reduced their spending.
From the graph we can see that all the largest positives are significantly larger than the largest decreases. This speaks to the strength and broad nature of the uptick in spending in the segment. Also note that you spend more money on pet services regardless of your race/ethnicity, where you live, how many people you have in your household, what neighborhood you lived in, or what type of neighborhood you live in. It’s a pretty comprehensive lift.
Nine of the winners flipped from last to first. This shows that large service spenders have unsurprisingly lost the most due to pandemic restrictions and shutdowns. , they bounced back strong. Winners also demonstrate the importance of revenue to service. This segment is demographically widespread, but dominated by higher incomes. Eight of the twelve winners are her #1 or #2 in income in their respective categories. The only winner that surprised me a bit is the 35-year-old she’s 44-year-old. The 45+ age group usually predominates.
Almost all losers are not unexpected. Again, when looking at income, 8 out of 12 are at or near the bottom of their income category. Two are not. From 45 he’s 54+ and Asians are the highest earners in their category. Asians are no surprise losers. Apparently, cultural differences lead us to spend less on pets than other racial/ethnic groups. The high income she is 45 to him 54 is a surprise. They’ve been at or near the top in service spending for years. In 2021 they finished third. They seem to be worth shopping for at a better price.
The recovery was strong and broad-based, with 90% of demographic segments increasing their spending on services. While no pattern is truly unique, he does have one notable trend. Income has become even more important in service spending. The 50/50 income split for service spending is now up to $133,000. This is 50% higher than the average CU income and 90% higher than the median income. 25% of CU accounted for 50% of service spending and accounted for 72% of the $2.2 billion increase.
Overview: After a strong rise in 2018, service spending plateaued in 2019. There have been many ups and downs, but overall the segment has remained essentially stable at newly elevated spending levels. That changed with the 2020 pandemic. Like many retail service segments, pet service outlets were deemed non-essential and subject to restrictions. This resulted in a significant drop in visit frequency and was the primary reason for a 20% decrease in spend.
2021 brought a strong recovery with the largest increase in history. Segments hit hardest by the pandemic generally showed the strongest recovery. However, the recovery was demographically widespread. In recent years, as our pets have become more humanized, pet service has become more important to pet parents and the pet industry. Be a reason to shop. You cannot groom your dog online. Like other segments, services he experienced strong inflation in 2022. In the past, this has had little impact on this revenue-driven segment. As data becomes available, Gibbons will investigate it and release an updated report.