The devotion of pet owners has created an industry that reached nearly $70 billion in 2017—roughly a 60 percent increase over its 2011 figure of $41 billion. Much of this increase is attributed to Millennials who own pets and are willing to spend more on those pets than previous generations. This consumer demand now supports countless pet stores across the country and countless pet supply companies around the world. But it’s not all a utopian marketplace of efficiency and satisfaction.
Price Pressures
The biggest issue is cost. The price of pet food has increased from an average $1.71 per pound in 2011 to $2.55 per pound in 2017. More recently, there was hardly any inflation measured at all from 2017 to 2018, even as owners continued to spend more on pet food overall. Unfortunately, the latest data says that prices may be going higher again. This time, it may not just be the pet food that’s more expensive. Since the beginning of the year, many consumers have seen a price hike of 10% on their pet food and care products that corresponded with a 10 percent tariff on the manufacturers and distributors.
Core brands are often more resilient to these price fluctuations, especially when they perceive the higher costs as temporary. Luxury brands may have higher profit margins built into their price tags, while aiming for higher sales as the gap in price narrows with other products on the shelves. It’s often the generic and niche brands that have the hardest times avoiding these price pressures.
Planograms and Visual Merchandising Strategies
As devoted as they may be to their pets’ well-being, consumers are likely to change their behavior in the aggregate as a response to rising prices. Predicting what behaviors and consumer preferences will change is often more complicated than it first appears. It’s essential for retailers and merchandisers to track these changes and respond to them quickly and effectively. Where are consumers willing to spend more for the same product? Where are they willing to spend more for a different product? Where are they willing to cutback or even do without when it comes to specific pet supply products? Tariffs are temporary and inflation is cyclical, but the insights gained from visual merchandising software during these periods of uncertainty can last the lifetime of the business.
Signs of Innovation Everywhere
It’s not all bad news. Direct and indirect tariffs on pet supply products may be affecting prices on the shelves, but it seemingly hasn’t hurt the ability of new B2B vendors to enter the pet supply market. The propensity for consumers to shrug off higher prices and continue to pamper their pets with premiums foods, toys, and grooming products has caught the eye of the business sector. Here are some of the best resources for pet supply stores and pet supply consumers alike.
- Applaws, a major UK pet food brand, has recently entered the US pet food market. Notably, it’s coming along with another UK company, Law Print, that is developing new packaging for Applaws customers in the US.
- Retail Smart, one of the best visual merchandising software companies in Europe, has recently entered the US market and has experience working with pet supply manufacturers and retailers.
- Larger retailers are more likely to manage their own planogram system. Notably, ScottPet, one of the most respected pet supply manufacturers, offers its retailers active merchandising support as a perk for buying and stocking their shelves with their products.
- Hydrite is now offering an extensive line of ingredients, preservatives, sanitation, and water treatment products that allow pet food manufacturers to market human-grade pet food products. One of its newest products, HydriPet™ VG 105, is manufactured through hydrolysis and composed of natural coconut glycerin.