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Pets Care Spending Hits Record $72B

The American Pet Products Association released new figures at Global Pet Expo.

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Pet care spending in 2018 reached a record-breaking high of $72.56 billion compared to $69.51 billion in 2017, an increase of over 4 percent.

The figures come from a March 21 announcement by Bob Vetere, president and CEO of the American Pet Products Association at Global Pet Expo. APPA’s annual industry figures cover pet spending in the market categories of food, supplies/over-the-counter medications, veterinary care, live animal purchases and other services.

“Millennials continue to be the largest pet-owning demographic and this shows in the data,” said Vetere. “We know this generation is willing to pay more for quality products and services to improve the health and well-being of their pets. Today more than ever, pet owners view their pets as irreplaceable members of their families and lives, and it’s thanks to this that we continue to see such incredible growth within the pet care community.”

At $30 billion, spending on pet food continues to make up the majority of dollars spent in the industry, with premium dog food accounting for the most frequent type of food purchased, followed by generic and natural food. Rather than a higher volume of food being sold, the ongoing growth in this category likely stems from rising prices and sales of higher-priced foods made with quality ingredients. An interest in natural, locally sourced treats and chews has never been higher across U.S. pet owners.

“In the coming year, we anticipate steady growth in the pet food category thanks to opportunities that reside in specialized diets, targeting the aging pet population and pets with unique dietary needs,” said Vetere. “The availability of fresh food options and subscription delivery programs is also expected to increase spending in this category.”

Coming in at $18.11 billion, veterinary care remains the second highest source of spending in the pet care community, surpassing growth in any other category at a rate of 6.1 percent. The frequency of vet visits has likely increased as well thanks to lower prices, making care more accessible to a broader audience. As a result, the trend of pet insurance is projected to increase with pets living longer and requiring more complex and extended medical care.

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“Scientific research from the Human Animal Bond Research Institute shows that the bond formed between people and their pets yields valid health benefits to both pets and their owners,” Vetere said. “It’s a partnership; if you take care of your pets’ health, they’re going to take care of yours.”

Following veterinary care, spending on supplies and OTC medications holds the spot for the third highest source of pet spending. Up 6 percent from 2017, $16.01 billion was spent on items such as beds, collars, leashes, toys, travel items, clothing, food and water bowls, pet tech products, and other accessories. The use of pet meds and supplements to ensure longer, healthier lives for pets continues to increase. In addition, pet owners are more likely to use digital devices and technology compared to non-pet owners, which explains the rise in popularity of pet technology products.

Pet services outside of healthcare including services such as grooming, boarding, walking, training, pet sitting and yard services saw a slight decrease, dropping 0.8 percent. Increased competition in this category has driven providers to lower prices and offer deals.

The live animal purchases category experienced a 4.3 percent decline compared to the year before. Contributing $2.01 billion in 2018, this category makes up the smallest area of total pet industry spend. Acquisition of dogs varies by generation with more millennials turning to shelters and rescues, while baby boomers and Gen Xers look more to breeders. However, millennials purchase pets at an independent pet store three times more often than boomers or Gen Xers.

“People across generations are keeping their pets longer, thus reducing the acquisition of new pets,” Vetere said. “However, with spending on our pets higher than ever before, it’s clear that giving pets the best lives possible is still a top priority for pet owners, and they’re willing to spend more on the quality products and services they consume if it means more quality time with their beloved companions.”

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State Bill Would Ban Pet Leasing

A few other states already have similar laws.

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A proposed law in Connecticut would ban the practice of pet leasing.

The legislation seeks to outlaw leases in which the new pet owners accept high interest rates and believe they are agreeing to a payment plan, the Connecticut Post reports.

Such agreements open the possibility of the pet being repossessed at a later date, according to the publication.

The state Senate approved the ban last week. The proposed legislation will now be considered in the state House.

Bob Duff, a Democrat serving as Senate majority leader, said: “As a pet owner myself, I could never imagine leasing a pet and then after six or nine months or whatever it is, giving it back. They might actually think they own the pet instead of leasing the pet.”

According to the Post, pet leasing has already been banned in Nevada, California and New York.

The Connecticut proposal would still allow for certain types of pet leases, including “those for breeding purebred dogs, renting show animals or obtaining guide or law enforcement dogs,” according to the Post.

Find out more at the Connecticut Post 

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Chewy to Open $55M Facility, Creating 1,200 Jobs

It’s planning a fulfillment center.

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Chewy, an online pet supply retailer, has selected Rowan County, NC, for its new fulfillment center, with plans to create 1,200 new jobs and invest $55 million.

“Chewy selected North Carolina because from our infrastructure to our workforce, we have everything businesses need to succeed,” said Gov. Roy Cooper. “These new jobs will make a positive impact on Rowan County and the surrounding area.”

The e-commerce company will locate in Salisbury, NC.

Chewy is dually headquartered in Dania Beach, FL, and Boston, MA. It has customer service centers in Dallas, TX, and Hollywood, FL, and eight fulfillment centers around the country.

“We’re excited to expand Chewy’s fulfillment operations to North Carolina, our first in the state and ninth in the country,” said Pete Krilles, vice president, corporate real estate and facilities, for Chewy. “We greatly appreciate the partnership with the City of Salisbury, Rowan County, the Salisbury-Rowan Economic Development Commission, North Carolina Department of Commerce, and the Economic Development Partnership of North Carolina.

“We look forward to making a positive economic contribution to the region with the creation of 1,200 new jobs. In addition to job creation, our new fulfillment center will enhance our delivery network across the southeastern United States, allowing us to better service Chewy customers with even faster delivery times.”

“Companies like Chewy will find success in North Carolina because we have a strong workforce and desirable business climate,” said Secretary of Commerce Anthony M. Copeland. “Pair that with our location and quality of life and you’ve got a winning formula.”

The North Carolina Department of Commerce and the Economic Development Partnership of NC were instrumental in supporting the company’s expansion decision.

A performance-based grant of $166,650 from the One North Carolina Fund will support the creation of 150 of the new jobs, facilitating Chewy’s establishment of the facility in North Carolina. The One NC Fund provides financial assistance to local governments to help attract economic investment and to create jobs. Companies receive no money upfront and must meet job creation and capital investment targets to qualify for payment. All One NC grants require a matching grant from local governments and any award is contingent upon that condition being met.

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Pet Store Chain Files for Bankruptcy

Its owner died in January.

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Petland Discounts, a chain that operated in New York, Connecticut and New Jersey, has filed for Chapter 7 bankruptcy.

The action follows the January death of the company’s owner, Neil Padron.

The company has closed its stores.

Notices with each of the three states’ labor departments indicated that more than 300 jobs could be lost across 70 store locations.

The bankruptcy petition was filed in New York Eastern Bankruptcy Court.

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Padron started the business in 1965. He died of bladder cancer on Jan. 14.

Details of the bankruptcy case are available here.

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