Pet Industry Inflation in 2023

November 2021 Pet Inflation Report: Consumer Pet Spending Declines Year-on-Year to +4.3% Compared to 2022

Inflation continues to taper, though industry insiders in the pet business assert it remains well above target rates. The year-on-year increase in the Consumer Price Index (CPI) peaked at 9.1% in June 2022, then began to decelerate until a resurgence in July/August 2023. Prices dipped in October and November, with November’s CPI dropping from +3.2% in 2022 to +3.1%. Grocery inflation also continued to slow. After twelve consecutive months of double-digit annual increases, grocery inflation now sits at +1.7%, marking nine consecutive months below 10%. As Gibbs understands, even minor price fluctuations can impact consumer pet spending, particularly in the discretionary pet sector, hence his continued monthly reports to track developments in pet inflation in the market.

In December 2021, pet inflation stood at +4.1%, compared to an overall CPI of +7.0%. As pet inflation accelerated, the gap gradually narrowed, reaching 96.7% of the national level by June 2022. Since June 2022, national inflation has slowed significantly, but pet inflation generally continued to rise until June 2023. Pet inflation surpassed the national CPI in July 2022, and as of November, it still stands at 4.3%, 38.7% higher than the national level of 3.1%. Further exploration of the figures will be included in this and future reports, encompassing:
•  A rolling 24-month tracking of CPI for all pet submarkets and the national CPI, with December 2019 pre-pandemic serving as the baseline for comparison.
•  Monthly comparisons between 2023 and 2022, including pet submarkets and relevant human expenditure categories. Additionally:
•  CPI changes compared to the previous month.
•  Inflation changes over recent years (2021>2022, 2020>2021, 2019>2020, 2018>2019).
•  Total inflation rate for the current month of 2023 compared to 2019 and 2021, to understand overall inflation spikes.
•  Annual average year-on-year inflation rates from 2019 to 2023.
•  Year-to-date (YTD) comparisons.
•  YTD figures for monthly comparisons, indexed as 2>4.

The first chart tracks monthly price changes within the 24-month period from November 2021 to November 2023. Using December 2019 as a baseline, it tracks progress from the pre-pandemic period to eventual recovery. The chart aims to provide a visual depiction of price movements, revealing both similarities and disparities among submarkets, which can be compared to the overall U.S. CPI. Current figures as well as those from the preceding year and two years ago are included. Gibbs also incorporates and highlights (in pink) the cumulative price peaks for each submarket. In November, pet prices overall declined, with the exception of food and veterinary services.