August 15, 2008

Pet owners are skimping on purchases to indulge their pets as the pet industry soars while the economy sours. (Pet Pulse Photo by Kris O’Donnell, Design by Tim Mattson)

ORLANDO, Fla. -- High gas prices, falling retail sales and a troubled housing market have all combined to batter the economy. But one industry is actually soaring.

At the recent Pampered Pet Expo in Orlando, credit card machines hummed along in booth after booth as pet parents shopped for various products, including fancy cat trees, organic pet food and clothing.

“We don’t skimp on our dogs,” pet parent Jamie Ruley said. “They’re our kids.”

Experts say pet-related expenditures should reach a record $43.4 billion this year. But for the rest of the economy, things aren’t so rosy.

“The sub-prime mortgage crisis that’s led to the credit crunch and turmoil in the financial markets, throw into the mix the rise in energy prices, and you’ve got sort of a toxic brew,” economist Sean Snaith said.

According to the Commerce Department, retail sales continue to fall after taking a decisive tumble in February.

While the overall economy continues to limp along -- with only an annual growth rate of 1.9 percent in the last quarter -- Standard and Poor’s predicts the pet industry will grow by 5.3 percent this year, and by at least 5 percent annually over the next five years.

“We did our homework before we did the show to see, is there a market out there for this and there is,” Pampered Pet Expo organizer Jackie Mackay said.

Snaith says the numbers reinforce the special place pets have in our society.

“There’s an emotional attachment that doesn’t apply to flat screen TVs or other types of expenditures,” Snaith said.

The economic downturn has forced some pet parents to spend less on themselves.
“We cut back,” Ruley said. “We sale shop and use coupons now a lot more than we did.”

The quest to save money is paramount to most consumers being pinched in the middle, and it sometimes leads to changing behaviors.

“We don’t go out very much for dinners anymore and I’ve cut back a lot, buying more groceries instead of eating out,” pet parent Sandy Bourdon said.

But consumers are reluctant to curb their spending when it comes to their pets.

“They get new toys all the time and they still get their treats and we still get premium dog food,” Ruley said.

While owners deprive themselves of dining delicacies, it seems Fido and Fluffy are still chowing down uptown style and sitting pretty.

“Nothing has changed with them,” Bourdon said. “They still get the best, the best dog food, the best toys.”

It’s that kind of devotion that has fueled businesses like Mr. Barksmith’s Cool Treats.
“Our business is booming,” Cool Treats owner Joy Carter said. “We can hardly keep up with the demand.”

It’s the same for the dog training company, Sit Means Sit, which has more than 80 offices across the country.

“It’s just gotten bigger and bigger every year, so it really hasn’t affected us at all,” C.E.O. Fred Hassen said.

And economists don’t see that trend changing anytime soon.

“We have a strong affinity and affection and consider these pets as part of the family,” Snaith said. “So it’s not like it’s an expenditure that you can easily cut out.”

Pampered Pet Expo organizers say the event was such a success, they have already finalized the dates for next year’s event.

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