Pet Spending Purring Along

In the grand tradition of pet-related posts here at Free Money Finance like How Much Would You be Willing to Spend to Save Your Pet's Life?, 10 Things Your Veterinarian Won't Tell You, and Cost of a Pet is $48,000!!!, here's an article from Business Week on how pet stocks make great investments. (Translation: People spend a lot on their pets and they are going to spend more in the future.)

Here are the highlights:

S&P equity analyst Michael Souers is bullish on the stocks of three companies that serve pets and the owners who love them. Why? The numbers paint a very enticing picture. According to the American Pet Products Manufacturers Assn. (APPMA), sales of pet products topped $34.4 billion last year, more than doubling the level seen in 1994.

Based on a recent survey, more than 69 million U.S. households, or 63%, own a pet. Of course, one isn't always enough -- 45% of those households own two or more.

The dog remains the most popular nonhuman companion, with more than 43 million households owning one. In 2004, households spent an average of $1,571 on Fido. Cats follow close behind, with almost 38 million homes cleaning up furballs. However, since they usually come 10 to a tank, freshwater fish are the most populous pet in the U.S. The APPMA estimates 139 million of them are swimming in 14 million homes.

"Pets are being considered more like family members than ever before," Souers says. "As a result, we think sales of pet products should be somewhat insulated from the economic pressures weighing on other consumer-discretionary items." In other words, a choice between new shoes and taking your sick dog to the hospital isn't really a choice at all.

According to industry data, consumers spent more than $18 billion on animal health-care services in 2001. Souers expects that number to rise consistently as diagnostic testing for animals increases in popularity and expands in scope.

I don't think I need to say much more than is already highlighted other than reiterate that you should add up the costs before you decide to get a pet (or another one).

Comments

[Terri W.]

This isn't a big surprise. I've found with the folks I know -- and I suspect it's a much larger trend -- that the fewer kids they have once they hit their 30s, the more dogs/cats they have, and the more pampered they are. I have a large number of female friends who "waited too long" to start having kids and got themselves a puppy instead. You can bet that puppy is doted on and has the best of everything.