Demand for premium pet food and animal pharmaceuticals will spur growth.
New York, NY (PRWEB) January 25, 2014
In the five years to 2014, IBISWorld estimates that revenue for the Online Pet Food and Pet Supply Sales industry has increased at an average of 7.8% annually to $3.2 billion. Rising pet ownership in the United States and growth across the e-commerce sector have caused the industry to experience overall growth, despite the recession. Furthermore, increasing demand for premium pet food and online animal pharmaceutical sales also contributed to industry growth during the past five years. While most pet owners indicated they reduced spending on pet supplies during the recession, according to a survey conducted by Pet Business, many consumers gravitated online to purchase more-affordable substitutes in lower quantities. Per capita disposable income, expected to increase 3.1% in 2014, is expected to cause revenue growth of 2.5% in 2014.
With rising revenue, industry profit margins have increased over the five-year period. According to IBISWorld Industry Analyst Andy Brennan, “Industry profit has risen due to improvements in automation, which caused wages to decline as a proportion of revenue.” Furthermore, premium pet food and supplies have boosted profitability because they typically have higher markups. Rising profit has caused the number of industry firms to increase at an average annual rate of 1.2% to 3,612 in the five years to 2014. Niche players like 1-800-PetMeds and discount retailers like Walmart have rapidly gained market share within the industry. 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 industry revenue will increase in the five years to 2019. 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,” says Brennan. This factor is expected to cause profit margins to decline, since firms will need to reduce prices to remain competitive.
For more information, visit IBISWorld’s Online Pet Food & Pet Supply Sales in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Online Pet Food & Pet Supply Sales in the US industry retails pet foods and supplies via the internet. Examples of products offered by online pet supply stores include collars, leashes, health and beauty aids, medication, toys, pet carriers and furniture.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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.