2022 was a difficult and challenging year. Compared with other sectors, however, the pet supplies industry got off relatively lightly. Retailers and manufacturers benefited from the significant increase in the number of pet owners worldwide during the years of the pandemic; and although pet owners in many countries reined in their spending in the spring and summer of last year due to high inflation rates, only buying what was strictly necessary to provide for their pets, sales began to rise again in the autumn. The pet supplies industry thus has every reason to remain optimistic based on the overall economic situation and to look forward to the new year with confidence. Above all, players in the sector can derive satisfaction from the fact that the trend observed during the pandemic towards premiumisation in pet food has persisted. Even in these financially tough times, many pet owners are not prepared to skimp on food for their four-legged companions. They may look more closely at the price, and maybe a few will shift down from super-premium to premium, but they continue to opt for quality when it comes to the contents of the food tin.
It’s a different picture with regard to accessories, which were impacted considerably more than the pet food segment. Most consumers were much more reticent to part with money on new items here, and there are a number of signs suggesting that this is not going to change in the next few months.
After adjustments for inflation, it is very probable that many companies in the pet sector experienced a loss in 2022. In view of huge price hikes for raw materials and packaging, the profit margin of retailers and manufacturers declined sharply. Companies shouldered a high cost burden, especially for power and heating, and these costs are likely to remain at a similar level in the coming months. Some of the stress related to supply chains was alleviated, however. Against the overall economic background, the wave of consolidation that is currently evident in the pet sector in South-East Europe looks likely to continue in many countries (cf. report on page 30).
It will be interesting to see in particular how online retailing in the pet sector develops this year. High sales growth failed to materialise for most companies last…