Despite hard financial times and talk of a double-dip recession, Americans will spend more than $50 billion on their pets this year—a new record, according to the American Pet Products Association (APPA). Even when it seems the country’s financial outlook can’t get any worse, spending in the pet economy has increased every year since 2001 and only once by less than 5 percent annually.
According to the APPA, pet ownership is at an all-time high of 72.9 million households—about two out of every three has a pet. There are about 78 million dogs and 86.4 million cats in the United States, representing a 2.1 percent increase from 2010. Food accounts for a majority of spending in the pet economy—an estimated $19.53 billion this year. The typical dog owner will spend $254 annually, not including treats. The average cat owner will spend about $220.
Big-box pet stores are also faring well. PetSmart recently reported its second-quarter earnings were up 32 percent and net income was $61 million compared with $48 million in the second quarter of 2010. But the biggest increase in pet spending this year is expected to be for veterinary care—with a total of more than $14 billion in spending.
Veterinary care expenses this year are expected to increase more than a billion dollars from 2010. That’s one reason pet health insurance has developed into a growing industry. Since 2007, it has grown by an average of about 10 percent annually, though it’s estimated only 800,000 pets in the nation are insured. Nonetheless, it’s an option for pet owners who figure coverage is outweighed by the difficulty of a large pet-care bill.