While pet numbers are decreasing, owners are spending more on their pets.
Melbourne, Australia (PRWEB) September 20, 2013
Pets are an integral part of the lives of many owners. Over 60% of Australian households own a pet. Over the past five years, however, financial concerns have become more prevalent for Australian consumers, leading many potential pet owners to postpone their purchases indefinitely. IBISWorld industry analyst Craig Shulman states, “Urbanisation has led to an increasing number of households moving into smaller dwellings or apartments, which has deterred large animal ownership. As a result, the dog and cat pet population has suffered, while demand has grown for some smaller animals (especially fish).” The decline in pet ownership has meant that core pet-related products, such as pet food, have declined in demand, leading to an overall decline in demand for the Pet Food and Supplies Retailers industry. Over the five years through 2013-14, revenue is expected to decline at a compound annual rate of 0.5%. In 2013-14, revenue is also expected to decline 0.5% to reach $3.3 billion.
According to Shulman, "Despite the fall in the total number of pets, owners are spending more on each pet.” Pets are becoming increasingly humanised, leading to increased investments in premium products and services (financial situation permitting), such as premium pet food and healthcare products. Pet food is increasingly being developed and marketed to be more appealing to human tastes, resulting in a rise in gourmet flavours and brands. Pet ownership is also taking on a premium character, as potential pet owners increasingly prefer to purchase pets from professional breeders. Animal shelters are also a popular source of pets as less fussy potential owners are able to find cheaper pets that come from a more socially conscious location. Some pet retailers, on the other hand, have a reputation for sourcing pets from pet farms, which may not treat the animals well. The next five years are expected to be more difficult for the industry. The reduced demand for pet products over the past five years has led to significant consolidation among specialist pet retailers, particularly as major supermarkets, veterinary clinics and online retailers increase in prominence and put further pressure on prices. Specialist pet retailers are expected to struggle to differentiate themselves as pet purchases increasingly shifts towards other retailers.
The Pet Food and Supplies Retailers industry operates at a medium level of market share concentration. The industry spans a variety of different businesses. The largest players are Woolworths and Wesfarmers, which operate major supermarket chains and discount department stores, which provide large, easily accessible locations for both pet food and accessories. The industry is also comprised of mid-tier chain stores including Mammoth Holdings and Petstock. Beyond these four players, enterprises are mostly small. For example, a number of companies sell pet food, including pet stores, specialist pet warehouses, milk bars, petrol stations and markets. None of these outlets account for enough revenue to influence the market. For more information, visit IBISWorld’s Pet Food and Supplies Retailers report in Australia industry page.
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IBISWorld Industry Report Key Topics
Operators in this industry are retailers of pet food and pet supplies. Products sold in this industry include wet and dry food for dogs and cats, bird feed, other food and treats for pets, food bowls, collars and leashes, litter, cages, travel carriers and other pet supplies and accessories. Online pet retailers are not included in the industry.
Key External Drivers
Industry Life Cycle
Products and Markets
Products and Services
Market Share Concentration
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Technology and Systems
Regulation & Policy
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