Recession Proof Stocks? Pet Spending On the Rise

One US industry unfazed by the economic wreckage surrounding it is as fitting as the subjects themselves: the pet business. According to Business insider, it’s booming.

Sure, the plethora of facebook photos of dogs in elaborate Halloween costumes could be a clue to the persistent “bear no expense” mentality owners feel for their four-legged friends, but the numbers are still shocking: anAmerican Pet Products Association’s report¬†found that the industry jumped $31.53 billion dollars between 1994 and 2010, with people expected to spend about $50.84 billion on furry, gilled, winged, equine, and reptilian friends in 2011 alone.

According to the 2011-2012 APPA National Pet Owners Survey, 62% of U.S. households own a pet, which equates to 72.9 million homes. The significant rise in pet-related spending isn’t as surprising given that the number of pets owned has also increased year-over-year.

Pampered Pets

Boutique pet stores are popping up left and right, “dress your pooch in style” screams from window displays, have your precious kitty sleep on a bed of satin, bedazzled with precious gems. Don’t skimp, remember, they love you unconditionally, and a jeweled collar and matching leash is the best way to say you love them back.

The pressure is on to feed pets the fancy organic, range-free, all-natural pet food that can break the bank. Bathe them with lavender scented pet shampoo, and don’t forget to spoil them rotten with holiday gifts!

Veterinarian Bills

Yet the bulk of the spending hike can be attributed to, what else, medical care. Any pet owner knows that animals can get sick, break bones, have cancer, pull a muscle, grow tumors, eat contaminated food and so on. Then there’s the pressure for pets to be spayed and neutered. All are conditions that usually end with Rover at the vet’s office.

Business Insider¬†reports: “Vets and medical supplies for animals have just gotten more expensive. Within the last year alone, people spent $1 billion more on vet care, and another half-billion on medicine, bringing the grand total to $25.51 billion. The availability of more sophisticated treatments for cancer and special services like ophthalmology partly explains the rising costs. However, animals are also checked more frequently by the vet than they used to be, and veterinarians are charging more for their services.”

Follow The Trend

So, with pet care costs on the rise, we decided to take a look at PetSmart Inc., (PETM) one of the few pure-plays on pet spending.

According to Kapitall’s Turbo Chart below, PETM has been outperforming the S&P 500 index in recent months. Do you think the company will continue to benefit from pet spending?


By Rebecca Lipman

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