Packaged Facts, a leading market analyst of consumer industries across the board, recently published an assessment of COVID-19's impact on pet products and services. Calling the pandemic an unprecedented occurrence in the nation's socio-economic history, the Rockville, Maryland-based market research firm now projects U.S. pet industry retail sales to decline by 17% in 2020. This is a major adjustment from the 5% growth forecasted at the end of 2019. It calls for a drop from $95.0 billion in 2019 sales to $78.5 billion in 2020.

Packaged Facts says the pet industry can expect "double-digit sales declines in 2020 for three of the four pet industry sectors." The sharpest drop is slated for non-medical pet services, such as grooming and boarding (as a result of travel restrictions and stay-at-home ordinances). Pet food, the largest pet industry sector, is actually expected to grow 4% in 2020, down slightly from a 6% growth forecast before COVID-19. Increasing ownership rates for dogs explains why pet food isn't taking it on the chin - though higher priced brands and formulations will be hurt somewhat. 

Opportunities For Store Brands
Sales of most pet medications should not be affected in the short-term, Packaged Facts points out, because they are purchased in multiple-month doses. Additionally, pet product consumers are aware of the advantages of store brands. A decade ago, in the immediate aftermath of the Great Recession, Packaged Facts researchers reported that "consumer's heightened value-consciousness has given private label a boost across many categories." In the mass-market outlets, private-label sales of pet products rose 14% in 2009 and $921 million, compared with the total market increase of 5%. The authors of the current Packaged Facts study, as well as everyone else in the pet products business, hope history repeats itself. 

There is precedent for optimism. Household spending on pet products and services surged 11% during the year following the trauma of "9/11," according to the U.S. Current Employment Statistics services that tracts worker earnings, spending and other metrics. With more Americans facing uncertainty on an unprecedented scale and spending more time at home, says Packaged Facts, "it is more than likely that [the concept of] pets-as-family will gain additional momentum during the age of coronavirus and beyond, giving the U.S. pet market a powerful and enduring boost."

Source: Packaged Facts Pet Market Bulletin: Assessing Coronavirus Pandemic Impacts of the Industry; April 2, 2020.