A Portrait of Our Shoppers
A Pet Business survey found that consumers are concerned about the economy and are holding back on non-essential pet purchases. The good news is that the bad times may not last much longer.
Unfortunately, your worst suspicions appear to be true. While consumers still love their pets and they are obtaining more and more of them, they are spending less on their friends today than they did just a few years ago. Also, according to a study conducted by Pet Business magazine, these same consumers are going to fewer places to get pet products.
The study, conducted in December and January in five metropolitan areas (New York/New Jersey, Miami/Fort Lauderdale, Chicago, Las Vegas and Orlando), found that the lingering economic downturn is having an impact on even the usually recession-resistant pet care category. And, it confirms what many pet retailers have been saying in regards to sagging sales at retail.
“We always thought that two categories were virtually immune to any but the most severe recession,” says the owner of a pet store chain who has seen the results of this survey. “One is baby products. The other is pet care. Now, we see that even the pet category can take it on the nose when consumer spending slows this dramatically. This study confirms what we already know. Sales have slowed along with the rest of the economy and will not pick up until the overall economy regains its footing.”
With all this bad news there are some slivers of hope from this report. Most importantly, it appears that the pet category is faring better than most consumer-goods segments, and many consumers say that they are still willing to spend money on the upkeep, health and mental well-being of their pets.
Yet it is very clear that the recession is hitting home with the pet category. The report, which surveyed nearly 500 consumers, found that a large majority of shoppers have cut back sharply on their non-essential pet care purchases, some by as much as 90 percent from just several years ago.
Of course, some items are doing better than others. While products such as flea and tick control items still appear important to consumers, pet toys and even grooming items have fallen off or to the bottom of the shopping list of many shoppers. Many said that they were simply making do with the products they purchased in past years and would not make additional purchases in the category until they felt the economy was improving.
It also found that consumers are looking at price points much more closely today than they did just two or three years ago. Nearly 80 percent of those asked said that they agreed with the statement that the pricing of products today is having a big influence on their decision to purchase a pet care item. More than 70 percent of those surveyed added that they have made price their top priority when purchasing pet products.
The cutoff on pricing seems to be around $10 for most pet care items, though the sale of pet toys, in particular, seem to be more resistant to higher price points. “A pet toy really needs to be priced low for me to take a close look at it right now,” says one New Jersey consumer.
Interestingly, a large number of shoppers said they were visiting fewer stores for their pet care needs. Apparently because of higher fuel prices and the need to visit fewer retailers overall, many consumers said they were purchasing whatever pet products they needed at just one store. They also said that service and product expertise have taken a back seat to pricing and variety as factors that determine where they shop. This trend bodes well for the larger pet superstores and the mass retailers and could potentially hurt the independent chains and mom-and-pop stores.
The survey found that more than 50 percent of shoppers utilize a mass merchandiser or grocery store for their pet care and pet food needs. About 23 percent said that the big-box stores, specifically PETCO and PetSmart, as their prime location for their pet products. Another 20 percent said that pet specialty stores are their top spot for pet products. The remainder said that they utilize the Internet or mail order to purchase their pet products.
Confirming what many industry observers have long said, consumers who are getting new pets are moving more towards dogs and cats and less towards the more exotic animals like reptiles, birds and even fish. That trend appears to be related to the high cost of maintaining the more exotic animals and the relatively low cost of maintaining a dog or cat.
There were some other bright spots for the category. One is that the pet food segment does not seem to be feeling the pain of the economic slowdown. Consumers say that they are still willing to spend extra to ensure that their pets get the right food for their animal’s nutritional needs. In fact, many of those surveyed noted that they were spending more than ever on pet food that offers less fat or more vitamins for their pets. Many of these same consumers said that the store of choice for all of their pet needs is most often the store that offers them the pet food product they are looking for or the best variety of pet food in their immediate area.
“We are quite pleased that pet food has held its own during these tough times,” says the director of business development for a major pet food supplier. “Yes, it is very evident that consumers are spending less money than before. But, in the pet food aisle at least, that is not really happening. In fact, we are very pleased with the up-tick in sales volume over the last year. It’s a testament to the fact that consumers still want to make sure that their animals stay healthy, and that starts with the food they eat.”
Another bright spot was the cat litter category, a market that has seen small or no sales gains over much of the last decade. As with pet food, many consumers said that they have noticed an influx of new technology in the cat litter category in recent years. Because of this, many say they are more willing to spend extra money on these products providing they fulfill a need.
Surprisingly, consumers think the worst times are over for the economy. More than 60 percent said they expected economic conditions to improve over the next 12 months, while just 15 percent felt that the economy would get worse over the year. “I think some good news will get all of us shopping more often, which should help the economy,” said a South Florida resident who participated in the study. “I want to buy these products but I just feel too concerned about how things are today. Maybe if things start to improve, I will go back to my regular shopping habits. That means more toys for my two dogs. But it will also mean that things are getting better.”