Affordability Issues Dog the Veterinary Industry

ROCKVILLE, Md., Nov. 8, 2023 /PRNewswire/ -- Affordability issues help explain a current drop in veterinary services usage, according to Packaged Facts' just released Veterinary Services in the US: Competing for the Pet Care Customer.

As of 2023, overall usage rates for veterinary services among dog- or cat-owning households are at 71%. That usage rate is down not only from a high of 85% during the core COVID-19 pandemic years, but from a pre-pandemic rate of 77% in early 2019.

Bureau of Labor Statistics data show that veterinary services cost 7.5% more in September 2023 than in September 2022, only a slight easing from the 8.8% price inflation in 2022. Recent price inflation has therefore doubled compared with the 3%-4% annual increases at the beginning of the decade.

Given that dogs receive vet care at significantly higher rates than cats, recent declines in national dog ownership rates help account for a drop in the veterinary customer base. But declines in dog ownership rates also tie into affordability issues, including housing affordability and high interest rates for consumer borrowing, given that dogs are the most expensive of common household pets to maintain.

Packaged Facts survey data show that millennials and Gen Zers, who in combination account for nearly half of dog or cat owners, are under pressure from pet-keeping and pet health care expenses. Millennials/Gen Z pet parents are more likely than their baby boomer counterparts to be strongly concerned about the affordability of emergency healthcare (at 53% to 43%, respectively), the cost of prescription pet medications (42% vs. 27%), and the affordability of routine pet healthcare (39% vs. 31%).

As is also the case in the human healthcare market, many pet owners have had to borrow money to pay for pet care, to decline pet healthcare treatment because they could not afford it, or to resort to payday loans or other loan alternatives to cover veterinary bills.

In an era of flat growth in the national population, a still-rocky economy, and high inflation, according to report analyst David Sprinkle, "growth strategies for the vet sector prominently include offering a wider range of economical services to reclaim a greater share of pet owners as clients."

Although two-thirds of veterinary customers opt for traditional, independent veterinary practices, affordability concerns as well as a priority on convenience have younger-generation pet owners turning to alternative formats, including chain veterinary clinics co-located in retail stores and the growing rage of telehealth options. As this Packaged Facts report argues, veterinary and non-medical pet services have increasingly become a retail affair.

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SOURCE Packaged Facts