Online Pet Food Industry: Niche Markets and Rising Pet Ownership Will Strengthen Online Sales

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The five years to 2016 look positive for the Online Pet Food and Pet Supply Sales industry, according to a new report released from IBISWorld. Rising pet ownership is expected to serve as a strong driver for demand and boost sales. Furthermore, slowly improving economic conditions will likely boost consumer spending, allowing customers to splurge more on premium pet products. Industry revenue in the Online Pet Food Industry is projected to increase to $595.8 million during the five years to 2016. For this reason, industry research firm IBISWorld has added a report on the Online Pet Food & Pet Supply Sales industry to its growing Online Food & Beverage Sales Report collection.

IBISWorld Market Research

IBISWorld Market Research

Rising pet ownership in the United States and growth across the e-commerce sector has caused the industry to experience overall growth

The five years to 2016 look positive for the Online Pet Food and Pet Supply Sales industry, according to a new report released from IBISWorld. Rising pet ownership is expected to serve as a strong driver for demand and boost sales. Furthermore, slowly improving economic conditions will likely boost consumer spending, allowing customers to splurge more on premium pet products. Industry revenue in the Online Pet Food Industry is projected to increase to $595.8 million during the five years to 2016. For this reason, industry research firm IBISWorld has added a report on the Online Pet Food & Pet Supply Sales industry to its growing Online Food & Beverage Sales Report collection.

In the five years to 2011, IBISWorld estimates that revenue for the Online Pet Food industry has increased to $484.7 million. “Rising pet ownership in the United States and growth across the e-commerce sector has caused the industry to experience overall growth, despite the recession,” says IBISWorld analyst Kevin Culbert. Furthermore, increasing demand for premium pet food and online animal pharmaceutical sales also contributed to industry growth during the past five years. However, revenue has not increased throughout the past five years. According to a survey of pet owners in 2010 conducted by Pet Business, most pet owners indicated that they reduced spending on pet supplies during the recession. Industry revenue declined marginally in 2009 as consumer spending fell, but an increase in per capita disposable income is expected to cause revenue growth of 2.5% in 2011.

With rising revenue, industry profit margins have increased over the five-year period. Industry profit in the Online Pet Food Industry has risen due to improvements in automation, which caused wages to decline as a proportion of revenue. According to IBISWorld analyst, Kevin Culbert, premium pet food and supplies have boosted profitability because they typically have higher markups. “Niche players like 1-800-PetMeds and discount retailers like Walmart have rapidly gained market share within the industry,” says Culbert. Niche operators will likely continue entering the industry during the next five years, especially those that specialize in targeted markets, such as supplies for exotic animals or health-oriented products.

IBISWorld forecasts that revenue in the Online Pet Food Industry will increase to $595.8 million in the five years to 2016. During that time, stores will benefit from an increasing number of pets in the United States and rising per capita disposable income. However, online pet retailers will also experience increasing competition from brick-and-mortar stores that also sell pet food and supplies, including grocery stores. This trend is largely due to the closing of a tax loophole that has allowed many internet retailers to forgo charging sales tax. This factor is expected to cause profit margins to decline, since firms will need to reduce prices to remain competitive.

For more information, including latest Industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld on the Online Pet Food & Pet Supply Sales for $850

IBISWorld Industry Market Research Reports Contain:

About this Industry
Industry Definition
Main Activities
Similar Industries
Additional Resources

Industry at a Glance

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle

Products & Markets
Supply Chain
Products & Services
Major Markets

Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry

Major Companies

Operating Conditions
Capital Intensity

Key Statistics
Industry Data
Annual Change
Key Ratios

Jargon & Glossary

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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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James Karklins
IBISWorld
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