Sales of pet merchandise might not be recession-proof this time around

The coronavirus (COVID-19) is wreaking havoc in the notorious recession-resistant pet segment.

This is the message of Packaged facts, who reported that total retail sales of pet products and services in the United States will decline by 17% in 2020, compared to the 5% growth expected before the coronavirus pandemic. This equates to a drop in sales from $ 95.0 billion in 2019 to $ 78.5 billion in 2020, according to Packaged facts.

“Historically, the pet care industry has experienced impressive and steady growth, growing twice the rate of GDP and even growing during the Great Recession,” said Simeon Hyman, global investment strategist at the financial services company ProShares. Chain store age. (The company manages the exchange-traded fund ProShares Pet Care [ETF] [PAWZ]). “It looks like this time is a little different.”

For example, based on the market peak from February 19 to April 16, “our PAWZ Animal Care ETF was down 9.7%. There was a 17% drop in the S&P 500, ”Hyman reported.

However, there is a silver lining for retailers who sell non-discretionary pet products, primarily pet food and cat litter. Pet food, the largest category in the pet industry, is expected to grow 4% in 2020, compared to 6% growth expected before the impact of the COVID-19 pandemic, according to Packaged facts.

While pet food remains a staple on consumers’ weekly shopping lists, sales will reflect as shoppers begin to downsize and store brands to stretch their household budgets, the report reported. company.

During the pandemic, more and more buyers are also relying on e-commerce to source this merchandise. “Online retailers are currently outperforming omnichannel retailers when it comes to consumer spending,” said Hyman of ProShares.

However, over the next 12-18 months, Hyman expects continued strong performance in online retail and consumer staples conglomerates as consumers continue to “take the best care of their animals.” companionship at home whenever possible “.