Are America’s dog and cat owners beginning to switch to cheaper pet foods?
The grocery trade-down wave has been underway for months as inflation continues, but pet products managed to avoid that trend.
But the tide could be turning, according to a Tuesday (Sept. 12) Wall Street Journal report that says pet lovers are eschewing costly gourmet brands or buying smaller pack sizes.
For example, the report says that premium dry dog food is losing share across all income groups, a sign that consumers across the board wish to save, according to Max Gumport, a BNP Paribas U.S. packaged foods analyst.
“In times of recession or economic stress, first you trade down on your own food, then your kid’s food and then your dog’s food. That’s what history would suggest,” he said. “This time is appearing to be different.”
The report points to research showing slowing growth in premium pet food sales in the second quarter of the year, as well as projections from General Mills of flat pet food sales numbers.
The WSJ cites comments from General Mills Chief Financial Officer Kofi Bruce at a recent conference, saying the trend is being caused by supply chain disruptions that forced people to choose cheaper brands, as well as inflation.
“It’s very clear we’re going through an environment where pet households and pet parents are seeking value, in everything from pack sizes to where they shop for pet food,” Bruce said.
However, recent PYMNTS Intelligence suggests that even when consumers are making major cutbacks, they are still willing to pay a premium when it comes to their pets’ food.
According to data from the study “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” while 47% of all shoppers have switched to a less expensive merchant for at least one grocery product, just 19% of grocery shoppers have switched to less expensive merchants for pet food and supplies.
And pet supply subscriptions have performed quite well when compared to other types of product subscriptions, per data from the study “Subscription Commerce Readiness Report: The Loyalty Factor,” a PYMNTS/sticky.io collaboration.
That study found that the pet supply industry’s Index scores — a measure that looks at 56 subscription features such as shopping convenience, comfort and trust, ongoing customer relationships and payment types — are 10% above the overall product subscription average.
Even if pet owners have begun trading down, General Mills’ Bruce apparently doesn’t expect it to be a long-term phenomenon, noting that people’s tendency to treat pets like part of their family is the “dominant driver of growth in the pet segment.”