By Sarah Marzano, Director, Retail, Circana
The American Society for the Prevention of Cruelty to Animals (ASPCA) estimates that nearly one in five households added a dog or cat during the pandemic. And according to the American Veterinary Medical Association, the percentage of U.S. households with dogs increased from 38.4% in 2016 to 44.5% in 2022, as cats went from being in 25% to 29% of households. Unsurprisingly, these trends have also spurred impressive growth in pet care product sales.
In 2022 alone, year-over-year (YOY) dollar sales of pet care products tracked by Circana increased 16%. This growth was driven overwhelmingly by increases in average prices across categories. Nevertheless, we saw steady demand in pet food and pet treats, with purchase volume flat YoY amid a consumer environment characterized by volume and unit declines across many CPG and general merchandise categories.
Despite our current uncertain economic environment, retailers and brands are well-positioned for ongoing growth in 2023. Following are three key trends that characterized pet-owning consumer behavior in 2022 — and that retailers and brands should plan for and monitor to optimize sales in the months ahead.
Pet Owners Are Delaying Discretionary Purchases
In the face of inflation, changes in how consumers buy for their pets has resembled their shopping behaviors in other categories — they’re prioritizing the essentials and cutting back on more discretionary products. While volume demand held steady in food and treats, we saw dollar and volume declines across a wide variety of pet-supply products, including collars, leashes, harnesses, pet grooming products, beds, and toys. This happened despite lower relative YOY price increases in pet supplies of 9.2% versus 14.8% for pet food.
Source: Circana, Total US - Multi Outlet + Conv + Pet Specialty Channel, CY 2022
As inflation cools in 2023, it will be important to monitor price trends in pet care as well as other categories. Because it all affects consumers’ total wallet and purchase behaviors. As inflationary pressures ease, pet care suppliers and retailers must be ready to coax consumers back into making the discretionary purchases that they’ve been putting off. Cross-promoting these products to shoppers buying pet essentials will be important for basket-building, as will energizing pet-supply assortments with new and innovative products.
Consumers Are Shopping in Stores More Frequently for Pet Food
Pet food drove more than 50% of total pet care dollar sales in 2022. And over the past four years, we have seen number of trips increase for these purchases along with a decrease in volume per purchase. These trends show that consumers have moved away from the “stock up” behaviors they embraced during peak COVID-19.
Pet treats and cat/dog litter saw similar growth trends in product trips. But pet food is the most frequently shopped category with an average of 18 trips per buyer per year. This is up 8% from 2020 and even up 7% from pre-pandemic 2019.
Source: Circana, Total US - Multi Outlet + Conv + Pet Specialty Channel
Among pet food subcategories, frozen and refrigerated dog food stands out as a growing trend. Though these foods comprise only 4% of total pet food sales, their YOY dollar sales were up an impressive 32%. Since these foods are also more perishable than kibble, they could be another trend that drives even more shopping occasions in the category moving forward.
To take advantage of this increased in-store foot traffic, retailers should prioritize optimizing the in-store experience for both efficiency and discovery — with a focus on thoughtful merchandising that encourages cross-category shopping. Messaging and offers that highlight product innovations and emerging trends will be key in turning the opportunity posed by increased store visits into basket-building success.
E-commerce Growth Shows No Signs of Abating
As consumer mobility plummeted during the onset of the COVID-19 pandemic, the share of total pet-aisle dollars spent online grew 9 points to a record 36.6%. While consumers are back in stores now, they’re also buying more of their pet products online than ever. In 2022, e-commerce share in the category hit a record 42%. This far exceeds the 12% of CPG products bought online in 2022 and nearly matches the 43% e-commerce penetration seen across the general merchandise categories.
Source: Circana, IRI_SYND_OMNICHANNEL
Given the central role e-commerce plays in pet aisle purchases, retailers and brands must prioritize streamlining and optimizing their digital path to purchase in 2023. Optimizing product pages and product copy to effectively communicate value and solve top-of-mind consumer concerns will be key to success. So will flexible product fulfillment offerings and a robust understanding of the online pet care retail landscape and evolving consumer shopping habits.
Monitoring and capitalizing on these key shopping trends will be essential in 2023 — and a great blueprint for ongoing success in an industry with strong long-term growth potential.
Reach out to your Circana representative or email us at email@example.com to learn how our comprehensive pet industry coverage, insights, and analysis can help you understand “the why behind the buy” and the best opportunities for future growth.