Looking for some uplifting news amidst the coronavirus pandemic? Then let Fido provide that for you.
Despite people starting to lose their jobs as businesses across the country shut down due to mandatory quarantines and social distancing, it doesn’t appear pets are going to get their short end of the rawhide bone yet. Or, getting the boots from increasingly financially strapped households. Instead, armed with still high savings ratings compared to prior recessions, consumers are spending aggressively at the moment to stock up on pet food.
Average year-over-year dollar growth for pet food tallied 6.4% for the first week of March, according to data from Nielsen. That’s quicker than the 2% to 2.5% pace seen for pet food sales in January and February.
Some of the biggest gains have been felt in dry dog food, dog treats, dry cat food, wet dog food and wet cat food. The sales growth numbers are expected to accelerate in coming weeks as more households enter coronavirus lockdown state.
“The above numbers demonstrate that Americans stocked up on pet food at the same time as they were stocking up on oat milk, toilet paper, pasta, canned goods etc,” a Nielsen spokesperson tells Yahoo Finance via email.
Unsurprisingly, online pet products retailer Chewy’s stock (CHWY) has rocketed higher during the broader market meltdown. Shares of Chewy have gained (yes, gained) 3% over the past month compared to the 30% respective crashes in the Nasdaq Composite and S&P 500. Chewy will report its latest earnings in April, and it could reflect a good chunk of the latest pet food panic buying.
Already, General Mills (GIS) has highlighted impressive sales of its Blue Buffalo pet food. Executives on an earnings conference call this week said pet food sales spiked by a double-digit percentage for the week-ended March 7.
“During the last recession we didn’t see a pullback on pet food. And as we look at Blue Buffalo, when we bought it, one of the things we like about it was the demand for pet food seems to be pretty inelastic. And what we have seen so far in the fourth quarter is not to the same degree is where we have seen North America retail, but people love their pets and they want to make sure they take care of their pets,” General Mills CEO Jeff Harmening told analysts.
Harmening added, “I would say demand for pet food, we continue to see very strong and to the extent that the U.S. has some economic hardships as a result of this virus, we would anticipate the pet food category would still be a robust category.”