Pet & Pet Supplies Stores NAICS 459910

Jan 26, 2026 - In-Store Pet Spending Holds Strong: APPA

• The American Pet Products Association’s 2025 Bird, Small Animal & Horse Report points to meaningful opportunities for US pet and supply stores as ownership and spending expand across these categories. Six million U.S. households own birds, six million own small animals, and two million own horses, with Gen Z driving growth in bird and small animal ownership and Millennials leading horse ownership. In-person shopping remains central: 55% of small animal owners buy food in store, 52% buy treats in person, and bird stores are the top source for acquiring birds, used by 21% of owners, up 62% over six years. Feed and specialty stores remain critical for horse owners, with 60% purchasing saddles in person. Gifting is also rising, with average spend reaching $40.52 per bird gift and $34.52 per small animal gift, supporting incremental sales across retail channels.
• US consumer confidence weakened again in December, creating a more cautious spending backdrop for pet supplies stores. The Conference Board Consumer Confidence Index fell 3.8 points to 89.1, while the Present Situation Index dropped sharply by 9.5 points, reflecting more negative views of business and labor conditions. The Expectations Index remained at 70.7 and has stayed below the recession-warning threshold of 80 for 11 consecutive months. Consumers’ views of their current family finances turned negative for the first time in nearly four years, and buying plans for big-ticket items and household goods declined. Spending intent continues to shift toward necessities and lower-cost purchases rather than discretionary items. For pet supply retailers, this environment suggests stable demand for essential products such as food and basic care items, but increased price sensitivity and pressure on discretionary categories, reinforcing the importance of value pricing, promotions, and everyday consumables.

• Pet supplies retailers face renewed pressure as Petco announced plans to close 25 underperforming US locations by the end of 2025, according to Penn Live. The closures, affecting a fraction of its approximately 1,300 stores nationwide, follow a year-over-year revenue decline in Q2, per the company’s earnings report. While Petco CEO Joel Anderson emphasized the move as part of a broader effort to strengthen its economic model, the decision underscores industry headwinds. Key challenges include intensifying competition, reduced consumer demand, labor shortages, inflation, and tariff impacts. For the wider pet supplies retail sector, Petco’s retrenchment signals potential consolidation, tighter margins, and heightened focus on operational efficiency. Smaller retailers may benefit from localized demand shifts, but overall, the industry must adapt to evolving consumer spending patterns and cost pressures. The closures highlight how even major chains are recalibrating strategies to stabilize earnings amid uncertain market conditions.
• While five services industries reported contraction in December, 11 industries reported growth, including the Retail Trade industry, according to an ISM Services PMI Report. Executives in the Retail Trade industry reported increases in business activity, new orders, employment, prices paid for materials and services, and inventories, along with decreases in new export orders, imports, and order backlogs in December. Other industries reporting growth during the period were Finance & Insurance; Accommodation & Food Services; Transportation & Warehousing; Arts, Entertainment & Recreation; Mining; Health Care & Social Assistance; Information; Wholesale Trade; Public Administration; and Utilities. Agriculture, Forestry, Fishing & Hunting; Information; Industries reporting contraction during the period include Management of Companies & Support Services; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Educational Services; and Construction. Overall economic activity in the services sector continued to expand in December, registering 54.4%.