Last couple of months have been unpredictable, to say the least, with the markets swinging left and right, and reports from Consumer Spending to CPI coming out coming out softer than a central banker’s soft landing, it had us all on the fence thinking – are we heading for a recession? Some experts are coming out with warning of a negative Q2 while others are saying the life of the slowdown is short-lived and it will blow over in Q3, but while we wait, we think its good to be prepared. We wanted to know what would happen to our Pet store tenants if we find ourselves in a recession this year (reminder: recession is a dirty word but what it really means two consecutive Quarters of negative GDP growth, which is not all that bad), so we took a dive into their businesses and the last 3 recessions. Pet spending according to US Bureau of economic analysis (BEA) is considered to be categorized under Personal Consumption Expenditures (PCE), meaning that people in US consider their pets family and spend on them as much as they do on their kids, or little less perhaps. Pet spending is thus placed in the Non-Durable goods spending, the same category as food & beverage purchased for off-premise consumption, clothing and footwear, gasoline etc. Therefore, we isolated the Personal Consumption spending data for the last three recessions and although this might not be news for some of you, the PCE has a tendency to increase during recessionary times as people cut back on other discretionary expenditures, such as dining out, fitness, personal grooming, while maintaining and often increasing expenditures on their pets. Some say its because of the increased time at home that people tend to spend during downturn, weather due to unemployment or cut down on travels, which deepens emotional commitment to their pets. Sure, grooming your pet may become a new house chore but the good boy still has to eat and that bodes well for pet stores.

The pet industry continues to be one of the most exciting and fast-growing sectors in today’s market, with projections putting it at $277 billion by 2030 and an expected 8% annual growth rate. What’s fueling this momentum? Millennials and Gen Z are stepping into their prime pet-owning years—and they’re spending more on their pets than any other generation before them. That shift is driving new opportunities and expanding the revenue potential for pet stores. With these trends in play, the pet space is shaping up to be one of the most promising markets to invest in.