Is the pet industry finally feeling the bite?
Growing numbers of pet owners are seeking bargains and shunning opulent items as the $87 billion pet product market — still surviving the recession better than most — is showing some signs of slowing down.
So reports Business Week, citing surveys that show more families are cutting back on pet spending, particularly when it comes to luxury items.
Nearly four out of 10 U.S. pet owners in a September survey by Packaged Facts said they’re spending less on pet products, up from 27 percent in February 2010; and three-quarters of them are looking for deals, particularly on non-food items like apparel and toys.
“The totally discretionary stuff is increasingly being cast aside,” said Lee Linthicum, head of food research at Euromonitor. “People still want to spend a fair bit of money on their pets, but they are reevaluating their priorities.”
Retailers such as PetSmart and Petco are turning to promotions to keep customers from defecting to discount stores like Target and Wal-Mart Stores Inc., but that comes with a cost. Discounts caused PetSmart’s profit margins on merchandise to narrow last quarter for the first time in two years, according to David Strasser, an analyst at Janney Montgomery Scott LLC in New York.
“Our industry is not recession-proof — we’re recession flexible,” said Leo Sanders, the owner of a grooming and boarding business in Corning, New York. “People will still spend, but instead of frivolous spending on squeakers and rawhide bones, now they are reading labels and making sure it’s a quality product. And they’re asking for discounts more.”
Joanne Mahon, managing director of Diamond Dogs in the U.K., said sales of the company’s diamond leash and collar combinations, and other upscale items, dropped as much as 25 percent last year. And Joan Volpe, managing coordinator at the Center for Professional Studies at New York’s Fashion Institute of Technology, said tighter household budgets have had a “sobering effect” on pricey pet apparel, such as that unveiled in its annual pet fashion show.
“There has been a turn to practicality,” Volpe said. “The seemingly frivolous items of just a few years ago like net tutus are no longer in demand.”
Posted by jwoestendiek February 28th, 2012 under Muttsblog.
Tags: accessories, bargains, discounts, economy, food, industry, items, luxury, pet, pet products, pet smart, petco, pets, products, recession, retail, sales, spending, stores, surveys