The Pet Economy Roars Ahead

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The Pet Economy Roars Ahead

Two of every three American households now include a pet, for a total of 71 million homes — an increase of 7 million in the past five years. While the number of pet owners is growing, the amount of money they spend is growing even faster: American consumers spend $41 billion per year on their pets.

According to a recent BusinessWeek1 cover story, that’s twice as much as 10 years ago, and annual spending is projected to reach $52 billion in the next two years. This means that Americans now spend more on their pets than they do on watching movies, playing video games, and listening to recorded music combined. In fact, pet care is the second-fastest-growing sector in retail, trailing only consumer electronics. Most of that spending is devoted to the nation’s 75 million dogs and 88 million cats.

All that spending is just one way that people pamper their pets. For example, many dogs no longer sleep on the floor. According to the American Pet Products Manufacturers Association, 42 percent of dogs share their owners’ beds, up from 34 percent in 1998. Also, when dog owners buy cars, 50 percent of them choose models that will be comfortable for their canines. About 30 percent of them buy birthday gifts for their dogs.2

A study by the American Pet Association, reported in the Daytona Beach News Journal,3 found that 31 million dog owners and 39 million cat owners buy presents for their pets at Christmas.

If it seems that pet owners are treating their four-legged companions like people, that’s exactly the case. In fact, marketers such as PetSmart recognize this growing bond between people and pets, and now refer to pet owners as “pet parents.”

Six demographic forces are driving this trend, and each of them can make people feel more isolated from human loved ones and more prone to fill the void with pets. These six demographic forces are:

The increase in single professionals who live alone and delay marriage until later in life.

The shrinking birth rate, which means that fewer couples are opting to have children, and those couples are having fewer children than their parents did.

The increased mobility of the American workforce, with corporate loyalty disappearing, workers constantly switching jobs and moving to new cities and leaving behind friends and families.

The aging of the massive Baby Boom generation, which is now aged 43 to 61 and facing empty nests as their children move out of their houses.

The expanding life-spans of Seniors, who find they have more years left to live after they retire than any previous generation...

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