Executive Summary
The average weekly expenditure on pets and pet products by households in the
UK has rose steadily each year between 1988 and 1993, and is now estimated to
be around £2.58bn a year.
Around
11 million households in the UK own at least one pet. Although cat-owning
households are considerably less numerous than dog-owning ones, the latter own,
on average, fewer animals than cat-owning households. This has the result that,
on the basis of 1992 figures, the cat population of the country, at 7 million,
is only slightly smaller than the dog population of 7.3 million.
Despite lack of precise information on numbers, it has been estimated that fish
are third in the popularity stakes, with budgerigars occupying fourth place.
Other popular pets include hamsters, gerbils, rabbits and guinea pigs, as well
as other bird species.
Although the UK pet population has grown significantly over the past 20 years,
this growth has somewhat declined recently. In fact, if the relatively modest
growth in the number of households over the past 5 years is taken into account,
there has been an actual decline in the numbers of pets per household over this
period. In the case of dogs, the number of dogs per household has declined, but
the total dog population has remained virtually static.
Within the dog population the trends are unclear, depending in part on how
breeds are defined as `large' or `small'. Some commentators claim to detect an
increase in the popularity of smaller dogs, attributed to a variety of causes,
including the expense of feeding and the adverse publicity suffered by some of
the larger, more aggressive, breeds. However, recent research suggests `a slow
but discernible trend towards larger dogs -- which is being stimulated by a
growing number of older people with extended leisure time'.
Another trend is towards the ownership of the more independent kinds of pets,
which need less in the way of constant care and attention, and which can be
left unattended for relatively long periods. This trend favours cat rather than
dog ownership, and it is indisputable that the cat population has grown
somewhat more rapidly than the dog population over the past 5 years.
This
report looks at all major sectors of the UK market for pets, pet product and
services, and the products which meet the needs of those markets.
It, therefore, covers the activities of breeders, trade associations, pet food
manufacturers, pet drug suppliers and veterinary surgeons, as well as suppliers
of pet products such as cat litter, kennels, leads and collars. It also looks
at pet shops, animal charities, and the suppliers of a variety of other pet
services such as grooming, pet funerals and pet transport.
The needs of the pet market are served by several industries. For many of
these, demand from the pet segment supports only a relatively minor part of
total activity. For instance, most pet food operations form part of companies
engaged in a wider set of food manufacturing activities. This is certainly true
of UK market leaders Pedigree Petfoods, part of US-based Mars Inc. This is also
the position of the number two firm, Spillers Foods, part of the Dalgety group,
which describes itself as `a major food group with strong positions in
agribusiness, food ingredients, consumer foods, pet foods and food
distribution'.
The pet drugs industry similarly forms part of the broader pharmaceutical
industry, with the major drug companies such as Bayer, CIBA-Geigy, Fisons
Hoechst and SmithKline Beecham featuring strongly in the market.
Outside the pet food and drugs sectors, operations are conducted on a somewhat
smaller scale by small independent companies, with both charitable foundations
and commercial organisations participating in sectors such as dog homes and pet
cemeteries, while some parts of the retail, equipment and services sectors are
particularly dominated by the smaller firm.
Pet ownership varies considerably according to age, social grade, and type of
household, and is higher in families with children, especially the larger
families with four or more members, among the C2/DE social grades, and those in
owner-occupied homes.
There are also differences in the consumer profile of the different pet-owning
groups in the population, with cat and fish owners tending to be younger than
dog owners, while the 35 to 45 age group provides the largest group of
budgerigar owners.
According
to recent estimates, the UK dog population will reach 8 million by 1995,
compared with the 1992 figure of 7.3 million. Large and medium-sized breeds
will continue to form the bulk of the UK dog population, although there is no
clear indication as to whether the balance between breeds of different sizes is
likely to change significantly in the near future.
The debate about the control of dangerous dogs, and the control of dog-related
diseases, is likely to continue.
The cat population is also likely to continue to grow, with cats and dogs
remaining by far the most popular family pets.
Key Note predicts that the pet market will continue to grow at a faster rate
than the rest of the economy, on the grounds that the market has yet to reach
maturity, and will account for some £2.2bn of consumers expenditure at
constant 1986 prices, or nearly £3.5bn at current prices, by the year
1998. This implies that as living standards increase, consumers will spend
increasing proportions of their incomes on pets and pet-related services.
So far as pet food is concerned, it seems clear that there is scope for
increased penetration levels, as some pet owners trade up to premium products,
and as others, at the other end of the market, start to use proprietary pet
foods for the first time. The complete dry dog food sector seems to be one that
is set to grow fast over the next year or so. Similar influences are at work in
other sectors of the market.
Over recent years, UK garden centres have been dealing increasingly in pets
and pet products -- selling goldfish, pet toys, dog chews, etc. If the recent
Sunday Trading Bill becomes law, this would restrict trading to just 6 hours.
This is substantially down on the period of 9 or more hours during which many
garden centres have been accustomed to opening in the peak season.
Changes in patterns of retailing are taking place in many product sectors in
the UK, and pet retailing is no exception. Among possible changes that would
have an impact on retailing patterns in the pet and pet product market is the
introduction of legislation arising from EC Directives, which might have the
effect of restricting sales of certain pet drugs to designated types of outlet
such as veterinary surgeries.
Other trends already referred to which are likely to impact the retail sector
are the move by multiple retailers to selling products, such as dry dog foods,
hitherto sold mainly through the specialised outlets, and the increasing
competition offered by garden centres in the retailing of a range of pet
products.
The pet care market is likely to share fully in the growth predicted for the
pet market as a whole, but there are one or two uncertainties. One that has
already been mentioned is the possibility that the implementation of certain EC
Directives might restrict sales of certain pet drugs to veterinary surgeries.
Another is the extent to which `environment friendly' pet litters made from
materials such as recycled newsprint are likely to replace the traditional
fullers earth and lightweight clay products, as has been the case in The
Netherlands and Germany.
As with other sectors of the pet market, the future development of the pet
equipment and services markets depends on predicted levels of pet ownership, as
well as changes in purchasing habits. The number of pets per household is
expected to rise only slowly over the next few years, leading to a growth in
the UK pet population at a rate only slightly above that of the human
population.
Nevertheless, in this sector there is room for growth at a rate in excess of
that likely to be experienced in the UK economy in general, as pet owners pass
on to their pets some of the benefits they themselves receive as the country
pulls out of recession. This is one of the sectors which benefits from the
indulgence of pets by their owners.
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