Welcome to Thoughts on the Market.
I'm Simeon Gutman, Morgan Stanley's U.S. hardlines, broadlines, and food retail analyst.
Today, the state of the pet economy, or as we lovingly call it, the petriarchy.
It's Monday, June 1st at 10 a.m. in New York.
If you have a pet, you probably know the routine.
You go in for one bag of food, then you remember the treats, the medicine, the grooming appointment, maybe the toy they definitely do not need, and then the vet bill.
You hope is not around the corner.
Pets are family, but family has gotten more expensive.
That's the big shift in the US pet economy.
The emotional bond is still powerful.
About two thirds of dog and cat owners strongly agree.
Their pet is an important member of the family.
More than a third say they would take on debt to pay for a pet's medical expenses.
Today, the growth story in the pet industry has changed.
After an extraordinary post-pandemic run, it has entered a slower, more mature phase.
We see growth settling around 4%. down from nearly 9% annually from 2019 to 2025.
That doesn't mean the market is shrinking.
We still see total US pet spending rising from about 200 billion in 2025 to more than 240 billion by 2030.
But the easy growth days look behind us.
The industry now has to work harder for each dollar.
Affordability sits at the center of this story.
A pet may start as an emotional decision, but it quickly becomes a line item in the household budget.
Overall, pet ownership remains above pre-COVID levels at about 67, but it has slipped from the 2024 high.
That pressure shows up most clearly among younger consumers, for whom cost has become the top barrier.
And consumers are adapting.
When pet food prices rise, shoppers stock up on sale items, compare prices online and in-store and, in some cases, trade down.
Still, pet food remains resilient.
Almost all owners plan to keep spending the same or spend more on pet food over the next six months.
The bigger change is that services continue to take share from products with veterinary care at the center.
Services accounted for just over 40 of pet industry spending in 2025 and we see that moving higher by 2030.
Food and toys still matter.
But healthcare prescriptions, diagnostics and routine care are becoming a bigger part of the wallet.
That brings us to vets, who remain the most trusted source of pet care information, cited by nearly 60 of owners.
Younger pet owners still rely on vets, but they also turn more to online sources friends, relatives and even store personnel.
About three quarters of owners visited a vet in the past six months, but average visits fell to under two, which is down from just over two in 2024.
This points to a more cautious consumer, especially around routine care.
We also see a subtle shift in the kinds of pets people choose.
Cat ownership has moved higher versus pre-COVID levels, while dog ownership among younger adults has pulled back from its 2024 peak.
That shift is not surprising, given that cats typically come with lower overall spending than dogs.
Shopping habits are changing as well.
Online pet product shopping has grown a lot since 2019, but its share of wallet has leveled off at roughly one-third.
The next leg of digital growth may come less from simply moving store purchases online and more from subscriptions pharmacy, healthcare and broader pet care ecosystems.
So where does that leave the pet economy?
Pet owners are certainly not walking away from their animals, but they are making more practical choices, watching prices more closely and deciding where convenience, health and value fit into the same budget.
Thanks for listening.
If you enjoy the show, please leave us a review.
Wherever you listen and share thoughts on the market with a friend or colleague today.
The preceding content is informational only and based on information available when created.
It is not an offer or solicitation, nor is it tax or legal advice.
It does not consider your financial circumstances and objectives and may not be suitable for you.
Oh, now we got Siri jumping in on this.
That's funny.
Okay, sorry.
I'll keep the recording going, I guess.
Sorry.
Sammy, sit down.
Thank you.
Now be quiet.
