Whereas pet meals inflation is slowing, based on John Gibbons of PetBusinessProfessor.com in his newest January 2024 report, it’s nonetheless going sturdy. January 2024 marked the fourth highest charge, with 2023 coming in on the second highest annual charge in historical past.
Costs turned up a bit in January 2024, however the YOY nationwide Client Worth Index (CPI) decreased to +3.1% from +3.4% (January 2023) as a result of huge month-to-month worth elevate in 2023.
In January, pet meals costs got here in at +4.8%, down barely in comparison with December’s variety of +5.1%. Pet meals costs handed the nationwide CPI in July 2022, and at 4.7% in January, it’s nonetheless 51.6% above the nationwide charge of three.1%.
When evaluating pet meals costs to the CPI from two years in the past when inflation took off (January 2022), CPI was +9.4% and pet meals costs had been +5.6%, that means pet meals costs are barely up greater than two years in the past.
2022 in comparison with 2024
• U.S. CPI – The inflation charge was beneath 2% by means of 2020. It turned up in January 2021 and continued to develop till flattening out in Jul>Dec 2022. Costs turned up Jan>Sep, dipped in Oct>Dec then rose in January however 30% of the 22.4% improve within the 49 months since December 2019 occurred within the 6 months from Jan>Jun 2022 – 12.2% of the time.
• Pet meals – Costs had been at or beneath Dec 2019 ranges from Apr 20>Sep 21. They turned up and grew, peaking in Could 2023. They’ve basically stabilized at this document stage. 93% of the 22.9% improve has occurred since 2021.
YOY — 2022 in comparison with 2024
• U.S. CPI – Costs are +0.5% from December. The YOY improve is 3.1%, down from 3.4%. It peaked at +9.1% in June 2022.
“The focused inflation charge is <2% so we’re nonetheless 55% increased than the goal,” defined Gibbons. “After 12 straight declines, we had 2 lifts, a steady month, 2 consecutive drops, now 2 lifts – not excellent news!”
The present charge is 52% beneath 22>23 however the 21>24 charge continues to be 17.9%. That’s 79.6% of the entire inflation since 2019. Inflation was very low in early 2021.
• Pet meals – Costs are -0.1% vs December and +4.8% vs January 23, down from 5.1%.
“[Pet food prices], nevertheless, they’re nonetheless 4 instances the Meals at House inflation charge,” mentioned Gibbons. “The YOY improve of 4.8% is being measured towards a time when costs had been 17.3% above the 2019 stage, however that improve continues to be 4 instances the pre-pandemic 1.2% improve from 2018 to 2019.” The 2021>2024 inflation surge has generated 90.2% of the entire 26.5% (Now: Second highest) inflation since 2019.
Costs and shopper spending
“Pet costs are 20.9% above 2021 and 26.1% increased than 2019,” mentioned Gibbons. “These are huge lifts. Since worth/worth is the largest driver in shopper spending it’s prone to have an effect on the pet business.”
And prone to have an effect on the pet meals section most.
Gibbons factors out that the meals section is most wanted so the response will likely be complicated.
“It may embody a motion to on-line procuring, switching to non-public label and even downgrading the standard of meals,” mentioned Gibbons.
