Pet & Pet Supplies Stores NAICS 459910

Mar 30, 2026 - Pet Industry Expansion Continues, but Spending Mix Shifts

• The US pet industry continues to expand, supporting pet supply retailers, with expenditures reaching $158B in 2025 (up 3.7%) and projected to hit $165B in 2026 (4.4% growth), according to Pet Age reporting on the APPA 2026 State of the Industry report. Pet ownership remains broad at 95 million households, with dog ownership rising to 53% (an increase of 4 million households) and cat ownership to 39% (up 5% year over year). For retailers, demand is resilient but shifting. About half of owners maintained spending, though 22% reduced spend, reflecting increased value-seeking. Consumers are prioritizing essential care over discretionary items, while products remain the top expense for cat owners. Growth across Gen Z, Millennials, and Gen X, especially a 12% rise in Gen X ownership, supports continued volume, but margin pressure may persist as spending becomes more value-oriented.
• The US services sector expanded in February 2026, with the Services PMI at 56.1%, supported by strong business activity (59.9%) and new orders (58.6%), though retail trade lagged and was one of the few sectors in contraction, according to an ISM Services PMI Report. At the same time, cost pressures remain elevated (Prices Index 63%, 15 consecutive months above 60%), while slower supplier deliveries (53.9%) and rising inventories (56.4%) reflect ongoing supply chain adjustments. For pet supply retailers, this indicates a stable but uneven demand environment, where broader economic growth supports sales, but retail-specific softness and margin pressures may limit performance.

• 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.
• Consumer confidence rose modestly in February 2026, supporting essential spending categories like pet care, with the index increasing 2.2 points to 91.2, though still below the 112.8 peak in late 2024, according to the Conference Board's Consumer Confidence Index. Expectations improved (up 4.8 points to 72.0), but current conditions weakened and financial sentiment softened. Inflation concerns and expectations for persistently high interest rates continue to constrain discretionary spending. For pet and pet supply retailers, the environment points to resilient, necessity-driven demand. Planned spending on pet care increased even as overall services spending softened and consumers prioritized necessary services. This supports steady sales in core pet categories, while higher-priced and discretionary items may face pressure as consumers remain cost-conscious.