||Spending on Pets Rises During Recession
Mary Louise Mills says her three dogs are spoiled rotten.
She has a 9-year-old shih tzu named Annie Lulu after Mills' grandmother, and two Pekingese -- 7-year-old Miss Daisy May and 4-year-old Elmer, whom she sometimes calls Fudd.
"They all think they're the boss," said Mills, 79, who lives in Annandale, Minn. "They've got me trained pretty well, I guess."
Mills enjoys their company; her husband died a few years ago. The dogs eat meals with her in the family room. They sleep with her in a king-sized bed and travel with her in the car whenever possible. They have a standing appointment about every eight weeks at Foxy's Pet Grooming and Boarding, which is one of the ways Mills tries to pamper her pets.
"My parents raised Dalmatians, and I've been a pet lover all my life," said Mills. "They're very important to me."
A lot of Americans feel the same way. According to the American Pet Products Association, people in the U.S. will spend more than $50 billion on their animals this year, a record. Spending in the pet economy has increased every year since 2001 and only once by less than 5 percent annually in that time.
Pet ownership is at an all-time high of 72.9 million households -- about two out of every three. About 78 million dogs and 86.4 million cats in the United States represent a 2.1 percent increase from 2010.
And those in pet-related industries in Central Minnesota say they've seen how animal lovers have made their business strong, if not recession-proof.
"I'm not surprised," said Valerie Muggli, who runs Tails of Gold, a golden retriever breeding operation. "I've found the same thing. The business really hasn't slumped. When the economy went bad, people started staying home more. They weren't taking as many vacations. They weren't gone as much. They started focusing on their home life and, for a lot of people, that includes a pet."
Muggli said she breeds about seven to 10 litters per year, depending on demand. Her puppies cost between $1,000 and $1,500, which she says is midrange for purebred golden retrievers.
"A lot of people ask 'Isn't it hard to send those puppies home with someone else?'" Muggli said. "It's a lot of work, but it's rewarding to see the joy they bring into people's homes. That's why I love doing this."
Muggli also is a dog trainer and has seen significant growth in interest in agility training.
Once you have a pet, the next object is to make it safe and secure at home.
Scott Potter has operated Invisible Fencing for 12 years in South Haven, Minn. A typical system from Invisible Fencing, which is a brand name and not to be confused with do-it-yourself pet containment systems, costs $1,500 to $2,000. Potter says his business isn't experiencing the record years it saw in 2006 and 2007, but it has rebounded through the recession.
"When the economy crashed, it affected our business," Potter said. "But we've been steadily gaining it back the last few years to the point where we're pretty busy now. People's pets are their family. They're like kids to some. Safety is a priority, and I see our systems save the lives of dogs and cats every day."
Potter said technological advances also have benefited the business.
"The collars pets wear with our systems now weigh less than an ounce," Potter said. "That's a lot lighter and less bulky than they used to be years ago. That's opened a lot of possibilities for different pets. Increasingly people realize it works well for cats."
Food accounts for a majority of spending in the pet economy -- an estimated $19.53 billion this year. The typical dog owner will spend $254 annually, not including treats. Average annual food spending by cat owners is $220.
Corporate representatives from PetSmart and Petco did not respond to inquiries for this story, but PetSmart recently reported second-quarter earnings were up 32 percent and net income was $61 million compared with $48 million in the second quarter of 2010.
The biggest increase in pet spending this year is expected to be for veterinary care -- with a total of more than $14 billion in spending.
The growth can be seen in some new pet hospitals, including Advanced Care Pet Hospital in Sartell, Minn. Tom and Pamela Gerds opened the operation in December 2009, although Pamela Gerds had been practicing as a veterinarian for 16 years in the Twin Cities.
"We did a lot of research and selected this market for a lot of reasons," said Tom Gerds, who runs the business operation of the animal hospital. "We looked at industry numbers and the number of pets and vets in the area. Based on those, we figured that the economy would bounce back and Sartell would be a good location."
Tom Gerds said pet owners mirror the bell curve of household demographics. Some people barely comply with license requirements for rabies shots. Others treat their pets as well as their own children. Different veterinarians have their niche, whether it's low-end vaccination clinics at big-box stores or full-service vets.
He said another reason vet care is accounting for a large slice of the pet economy is because pets are living longer through advanced medicine and technology.
"It's approaching the level you see for human care, compared with the days when you took your (sick) pet to the farm and then you never saw them again," Gerds said. "We can test for glaucoma and cataracts. There are a lot of things that can be treated now that people didn't run into when they put their pets down sooner. Of course, the equipment isn't cheap, and it's a significant investment for all involved. Sometimes when you tell someone who bought their cat from the humane society for $10, they look at you like you're kidding."
Veterinary care expenses this year are expected to increase more than a billion dollars from 2010. That's one reason pet health insurance has developed into a growing industry. Since 2007, it has grown by an average of about 10 percent annually -- though it's estimated only 800,000 pets in the nation are insured. Nonetheless, it is an option for pet owners who figure the luxury of such coverage is outweighed by the difficulty of a large, unwanted pet-care bill.
According to Reuters, more than 15 percent of dog owners said their pet's medical treatment would take priority over their own.
Some research shows, however, the two may go hand in hand.
A recent study from the State University of New York at Buffalo found pets help lower blood pressure. According to the Waltham Centre for Pet Nutrition, pets help reduce stress. And the National Institutes of Health Technology has research that shows pets provide their owners with greater psychological stability and a measure of protection from heart disease. The same organization says pet owners make fewer doctor visits and pay lower health care costs.
The fondness people feel for their pets, the increasing number of them and the growth in human population also have contributed to growth in the pet cremation business. Peggy McStott-Voigt operates Heavenly Paws south of St. Augusta, Minn. She said her 10-year-old business saw no dip during the recession.
"It's still a priority for pet owners," she said. "These are basically family members."
Cremation service depends on the size of the animal, but an average private cremation costs about $125. A garden cremation, where multiple pets are cremated at the same time, starts at $60. Urns made of plastic, wood or granite for the ashes run from $25 to $300. Owners can have a paw print made from their pet for $18.
McStott-Voigt says Heavenly Paws is one of four pet cremation services in the state, with the others in Minneapolis, St. Paul and Duluth. She offers a memorial garden for people who use her service to spread or bury their pet's ashes if they don't have private property on which to do so.
"When the floor dropped out of the economy, people stopped spending as much on their wants and focused on their needs," McStott-Voigt said. "But this is a need for many people. I've had people keep some of the ashes in a phial on a key-chain so they can keep their pet close to them. It's a personal thing."
Shelley Bunkholt has been grooming animals since she was a kid and dabbled in the business part-time for decades. Five years ago, however, she decided this was what she wanted to do. She ended a 27-year career as an insurance underwriter and opened Foxy's Pet Grooming and Boarding.
Her business has grown to the point where she's building a new facility this month. A new pole building will take pressure off the space she uses in the garage adjacent to the log house she and her husband have on a 40-acre property.
Bunkholt boards dogs and cats in what she describes as a relaxed atmosphere. The animals have real furniture on which to rest if they wish, including couches. Her grooming operation started in her basement and has continually picked up new business through vet referrals.
"Some people don't groom as often or they've got to plan for it in their budget, but business has held up well, and we're getting new clients all the time," Bunkholt said.
She also has three dogs -- a poodle, a golden retriever and a Jack Russell terrier. She says hygiene, including dental cleaning, has become more important to pet owners. She even works with a canine chiropractor.
"People who focus on their pets give them better care, and because of that they're going to live longer," Bunkholt said. "Making life better and easier for people and their pets is what it's all about."
(Source: USA Today, 10/10/11)
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