Retail Insight Network

Daily Newsletter

11 August 2023

Daily Newsletter

US consumers plan to spend more on pets despite inflation

A new study finds that pet owners plan to increase spend on food, treats, supplements and hygiene products as well as birthday and holiday gifts.

According to recent consumer survey data of more than 700 pet owners and Vericast's annual 2023 Retail TrendWatch, consumers are putting their pets before inflation worries.

Over three-quarters (76%) of pet owners view their pet as their child. Millennials felt most this way at 82%, followed by Gen X (75%), Gen Z (70%) and baby boomers (67%).

Consumers will spend more on pets, especially when it comes to their health, but they'd like to save money where possible. About 37% of consumers surveyed seek discounts for pet spending this year, and 28% are using loyalty programs.

About 78% of survey respondents are willing to spend more on pet food and treats in 2023 than in 2022, indicating an interest in higher-quality products.

Over a third of consumers (38%) are willing to spend more on health products like vitamins and supplements this year, and 38% of respondents also said they will spend more on pet hygiene products.

Pet owners are shopping where they're most likely to find discounts – pet specialty big box stores and retailers.

Almost one third (32%) of people shop for their pets at big brand specialty stores, while 20% of consumers preferred e-commerce shopping for pets. Only 13% of consumers said they are willing to shop at local, boutique pet stores.

About 80% of pet owners commemorate pet birthdays and holidays with a special gift or treat.

Hybrid and remote work also impact spending. About 62% of pet owners surveyed say that they're spending more to keep their pets busy. Of those that work fully remote, 74% plan to spend more on toys and activities to occupy pets during the day.

Vericast pet industry expert Taylor Coogan commented: “With the holiday season approaching, now is an opportune time for retailers to evaluate how they will communicate the value they provide to pet owners."

According to the latest pet spending data from the American Pet Products Association, spending remains strong as economic uncertainty persists. Pet spending in 2022 was $136.8bn in total industry sales, nearly an 11% increase over 2021. About $58bn was spent on pet foods and treats, which was the highest spend category and the category with the biggest increase at 16%.

APAC duty-free market expected to grow fastest, fueled by rising income levels and international travelers

Per latest GlobalData estimates, the global duty-free market retailing market was valued at $49 billion in 2022, its highest level ever as it bounced back from the pandemic impact, and is expected to grow at a CAGR of more than 28% during the period 2020-2026, driven by government initiatives, rising passenger numbers, major global events (for instance global sporting tournaments) and the renewed popularity of cruise trips. Infrastructure investments will also play an important role, particularly airport expansion and space refurbishment, and investments in arrivals duty-free formats. That said, growth will be held in check in the years ahead by the permanent erosion of disposable income from the heightened cost of living impacting demand for air travel. The duty-free market in the APAC region showed strong growth in 2022, as traveler numbers surged in response to the lifting of travel restrictions. To cater for rising demand in the region, many airports in the APAC area are expanding and modernizing, giving duty-free stores greater space that will allow them to attract more customers. The future of APAC duty-free retail is also being shaped by the adoption of technology. The rise in online shopping, mobile payments, and digital marketing are giving businesses new ways to connect with customers and improve the shopping experience.