Pets prove to be recession-proof

While Americans willingly cut their spending on upscale restaurants during the Great Recession, their pets continued to dine on gourmet meals.

A recent report by the U.S. Bureau of Labor Statistics (BLS) backs up an October 2011 Time magazine report that claimed pets were as "recession-proof as doughnuts, chocolate and condoms," and so popular that Americans spent more than $330 million on their pets' Halloween costumes that year alone.

Spending on pets and their needs soared to a record $61.4 billion in 2011, according to data collected by the U.S. Census Bureau. The results of two surveys conducted from 2007-2011 indicate that while overall household spending decreased by 7.7 percent, Americans spent 7.4 percent more on their pets during the same time period, said BLS economist Steve Henderson, chief of the Branch of Information and Analysis at the Consumer Expenditure Survey Division in Washington, D.C.

In the BLS' latest quarterly Beyond the Numbers report, Henderson says that Americans, whether they be higher- or lower-income households, devote about 1 percent of household income to pets.

Americans own 218 million pets that live in nearly three-quarters of U.S. households, according to the American Pet Products Association, cited in the report.

The average U.S. household spent just over $500 on its pets in 2011. Put another way, households reported spending more on their pets annually than they did on alcohol ($456), said Henderson.

"I was interested to see that spending stayed constant, that people kept caring for their pets as much as they did and that (spending) wasn't affected. The other thing I find interesting is that even when we sliced up the data by age, people were still spending on pet food and pet care into and beyond their 70s," Henderson said.

"[Local shoppers] were spending a little less at the very high end," said Laura Bednarczyk, owner of the LuLu & Luigi stores. "They still wanted quality but at prices more in line than with what was going on with the economy.

"People were still spending on their pets because to some people they're their kids. So while some businesses were hit harder, I think the pet category was spared the brunt of the downturn."

Individual pet owners took different approaches.

Meredeth Barzen of Minneapolis said her pet Sadie got no more or less "stuff" during the recession. "I try to cut out unnecessary spending on my dog regardless of the economic climate. Vet bills, food and licenses are expensive enough that I'm not inclined to spend where I don't need to — aside from the occasional box of treats, of course."

Pam Wetterlund of Minneapolis said she never cut corners for her dog Frida — "I'd scale down on myself before I'd scale back on her" — but she started saving a lot of money two years ago when she got a job at Grassroots Solutions, where she can take Frida to work instead of a daycare center.

"New dog daycares and self-service dog washes are popping up all over," said Ali Jarvis, founder of www.sidewalkdog.com, a website listing dog-friendly sites around the Twin Cities, "and the rise in the local industry began at the very beginning of the recession."

Jarvis said she cut back on eating out but not on dog-food spending.

"I found that as people were having to cut back on large expenses, it made them feel good to spend money on their beloved pets. I have a friend who couldn't afford to stay at expensive hotels, but she could afford to send her dog to 'five-star' boarding facilities. My sister had to stop working with a personal trainer, but she could swing hiring a dog walker."

The surveys show pet spending decreases as the number of people in the household increases. Spending the most are married couples without children in the home.

The extravagance over pets doesn't surprise Mindy Pozzuto. She brought her brindle-colored Labrador retriever mix, Jonah, to a shop for what she called his "mani-pedi" appointment.

Jonah was getting his nails ground down by store groomer Merenda Smith to prevent him from scratching the family's hardwood floors.

Pozzuto said she feeds 5-year-old Jonah, rescued from Summit County (Ohio) Animal Control, a "high-tech" dog food made with lamb because corn and chicken products upset his sensitive stomach.

On another aisle, pet parents Courtney Napier and Adam Deets of Fairlawn, Ohio, were picking up a large bag of the pricey Taste of the Wild Sierra Mountain grain-free dry dog food for their 11-month-old black Labrador retriever named Jed, who suffers from food allergies.

Jed accompanies the couple to the store every two to three weeks, said Napier. Each time he visits, the dog is permitted to pick out a toy of his own choosing.

"Sometimes it takes him 10 minutes to pick out a toy. He loves coming to the store," she said as she watched the pup sniff his way along each bin in the aisle. Jed finally settled on a large rawhide bone he nudged out of a bin with his nose and onto the floor.

The figures are the national averages for all households, including households that did not make any purchases for that category. Households chosen from a Census Bureau master address list are recruited for the consumer spending survey.

The diary survey is conducted annually with 7,000 households that are asked to keep track of all spending for a week. Census workers examine the diary after the first week, then ask the household to continue for a second week, thus providing 14,000 "good" weekly diaries each year, Henderson said.

"That's where we pick up a lot of those - I call them Walmart items - where you are going through the store and you pick up a lot of those things while buying groceries, toothpaste and cat food and toiletries and flashlight batteries - all those things that by the end of the day you have forgotten," Henderson said.

The second survey used to collect data is based on interviews of 7,000 households every three months for a year about their spending habits. They provide another 28,000 interviews each year.

"For that part of the population you get the big expenditures, or the repeat expenditures - every month you pay your Netflix bill or your electric bill to keep the lights on, " Henderson explained.

"About one in every 10,000 addresses is represented. In other words, if you are in the sample, you represent about 10,000 people," Henderson said.

The breakdown of pet spending from 2007-11 suggests that veterinarian services showed the highest percentage increase of 16.1 percent, from an inflation-adjusted $123 to $143. However, in the interim, there was a spike in 2008 to $216.

Pet food was the second-highest expenditure reported in the surveys, increasing each year from $159 in 2007 to $183 in 2011.

The only decrease in spending occurred for live pet purchases, supplies and medicine, down an inflation-adjusted 6.6 percent, or $10, from $151 in 2007 to $141 per household in 2011.

Americans indulge their pets with good reason, said marriage and family therapist Susan Stocker of Akron, who works at the Akron Family Institute.

"I think my cats would probably live with anyone who fed them and changed their litter box. But a dog, oh, my gosh," said Stocker.

"The level of unconditional love of a pet exceeds most of our human capacity for unconditional love. We humans are very conditional in our love. We are almost incapable of giving the unconditional love a pet can give back to us," she said.

Stocker said she's counseled couples who stayed together because they couldn't decide who would get custody of the dog if they split up.

"It's not crazy, it's perfectly understandable. It's an indicator of how desperately we all need love, affection and attention and we know where we can get it. We can get it trustingly, without question, from a pet," Stocker said.

The BLS report is available at http://www.bls.gov/opub/btn/volume-2/spending-on-pets.htm.