Strong and steady pet ownership trends will continue to drive demand for veterinary services
Los Angeles, CA (PRWEB) May 06, 2013
The Veterinary Services industry has performed well in the five years to 2013, with revenue rising at an annualized rate of 2.6%. “Although revenue slightly declined during the economic downturn due to a drop in client visits and disposable income, rising pet ownership and a greater willingness to spend on pet health and wellness helped maintain growth over the period,” says IBISWorld industry analyst Austen Sherman. An expected 4.0% boost in 2013 will push revenue to an estimated $31.7 billion by the year's end. This growth not only indicates the industry's resilience, but also the significant influence that changes in per capita disposable income have on demand for veterinary services.
Veterinary service operators have consolidated in an effort to maintain revenue in the face of mounting competition from superstores and online retailers that sell pet products and medications. In the past five years, the number of operators has declined at an estimated average of 1.3% per year to 38,316. According to Sherman, “Consolidation has helped operators reduce costs to remain competitive, though wages have actually increased as a percentage of revenue due to a veterinarian shortage in the United States.” This factor is also partly attributable to the rising use of well-paid veterinary technicians to assist in the use of developing technologies. Nevertheless, consolidation has allowed many operators to share the industry's fixed costs. It is also increasing market share concentration in the Veterinary Services industry. Concentration has increased in recent years due to acquisition activity, particularly by major players, VCA Antech Inc. and IDEXX Laboratories Inc.
Consolidation is projected to continue during the five years to 2018. As consolidation helps operators build economies of scale, in which they can spread costs over a larger customer base, average profit margins are projected to widen by 2018. Similarly, revenue is forecast to increase. This trend will be fostered by continued growth in pet ownership, greater demand for animal products and legislation that will encourage veterinarians to practice in underserved areas. For more information, visit IBISWorld’s Veterinary Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Veterinary Services industry includes establishments of licensed veterinary practitioners who provide medical, dental or surgical treatment for animals. The industry also includes establishments that provide laboratory and diagnostic testing services for licensed veterinary practitioners. Companies that manufacture medical supplies or pharmaceuticals for animal treatment are not included in the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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