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Part One

New industry spending figures released by The American Pet Products Manufacturers Association (APPMA) confirm just how much pets are becoming a part of American families. It is estimated that pet spending will reach $38.4 billion in 2006, according to APPMA.

After tracking pet industry statistics for more than a decade, APPMA announced new figures today demonstrating a continued rise in pet expenditures. Pet spending has more than doubled from $17 billion in 1994 to an estimated $38.4 billion in 2006.

In 2006, Americans' spending on pets is projected to be higher than ever:

$15.2 billion for food
$9.3 billion for supplies and over-the-counter medications
$9.4 billion for veterinarian care
$1.8 billion for live animal purchases
$2.7 billion for other services

Total pet spending in 2005 was more successful than projected with total sales coming in at $36.3 billion. And when examined by individual segment, the numbers are even more revealing. Both veterinary care and other services had stronger than anticipated performances in 2005. New and expanded veterinary services such as joint replacement surgeries, delicate eye procedures and senior health care helped increase total spending by almost 8 percent over 2004. Other innovative new services continue to increase market penetration with pet spas and hotels, grooming, pet therapy and related services.

"Both of these segments should maintain strong performances this year as pet ownership continues to increase especially among key demographic sectors including baby boomers and young professional couples," said Bob Vetere, president of APPMA.

Vetere points to a continued trend in the humanization of pet products to fuel further growth in retail. "Both baby boomers whose children have moved on with their lives and young professionals who are delaying having families in favor of careers are turning to pets to fill the void at home," he said. "With these families' higher-than-average disposable incomes, their pets are enjoying elaborate high-end and high-tech products as well as innovative devices designed for convenience for the pet owner." With this healthy base continuing to expand, APPMA is projecting total industry spending to grow by 5.7 percent in 2006 to a total of $38.4 billion dollars.

According to the APPMA 2005-2006 National Pet Owners Survey, current basic annual expenses for dog and cat owners in dollars include:

As it is becoming widely recognized, pet owners' spending is not limited to the basics. APPMA's National Pet Owners Survey shows 27 percent of dog owners and 13 percent of cat owners buy their pets birthday presents, and 55 percent of dog owners and 37 percent of cat owners buy their pet holiday presents. Why do people pamper their pets to the tune of billions of dollars a year? Pet owners report in APPMA's National Pet Owners Survey it because they have a special bond with their pets and consider them a best friend, a companion or like a child or member of their family.

Vetere likens it to his experience with his golden lab, Dakota, "I can sit and talk to him and tell him any problem I have, and he just sits there with his tongue hanging out, smiling at me, just waiting for me to finish. It's like, 'OK, you feel better now? Let's go outside and play.' " Pets not only make us feel better, all the pampering we've done for American pets has helped them reap the health benefits of human technological advances. A better understanding of pets by veterinarians and manufacturers is producing high-quality pet food, treats, treatments, health care items, vaccines, chemotherapy and surgical techniques that are extending the life of pets. "We've come a long way in terms of how we view and treat our pets," said Vetere. "And, fortunately for pets and people, there is still plenty of opportunity for healthy growth."

The American Pet Products Manufacturer's Association (APPMA) is the leading not-for-profit trade association serving the interests of the pet products industry since 1958. APPMA membership includes nearly 900 pet product manufacturers, their representatives, importers and livestock suppliers representing both large corporations and growing business enterprises. APPMA's mission is to promote, develop and advance pet ownership and the pet product industry, and to provide the services necessary to help its members prosper.

Part Two

Okay groomers, you are probably saying to yourself, $107 a year including grooming aids? How depressing! I charge $55 for a Golden. How can this be? We know by your comments on the GroomerTALK Message Board that there is a lot of mystery surrounding the results presented by the APPMA. We all know that something is wrong with those numbers for "groomer/grooming aids." Did you figure out why yet? In our opinion, it's not an error on the part of the APPMA, but a "survey distortion."

Historically, most of the best surveys in the pet industry have been done by the retail and veterinary care sectors of the pet industry. However, both have given inadequate attention to supplementary questions which deliver a better understanding of what their figures mean to the pet services sector. What the boarding sector and the grooming sector needs to know in addition to the spending allocations is, how many dog and cat owners surveyed are actually using the services of boarding operations and groomers? Then, we can take that percentage and modify the dollar results they provide to better reflect the REAL spending of dog and cat owners that actually use the services.

It is possible that behind the scenes the APPMA did do this, but we don't know. We do know, like most groomers know, that $107 annual spending for dog grooming and $24 for cat grooming is incorrect simply by looking at our financial records. The best answer is that dog and cat owners not using grooming services entered $0 spending on grooming questions for the APPMA and that depressed the average of survey results of those actually using grooming services. Therefore, we need modified results of the APPMA survey figuring in only the answers of dog and cat owners actually using professional pet grooming services.

We were so pleased in 1990 when the Gallup Poll of pet owners actually asked, "Have you used the services of a pet groomer?" Now that helps. We learned that 43% of pet owners responded yes. However, keep in mind that they only had to use a groomer one time to respond yes. Therefore, 43% were probably not continually using professional grooming services on a regular basis. As you can see surveys can create distortions based on the specific wording of the survey questions.

What we need to know is, "Do you use professional grooming services, and if so, how often?" Now that would improve things, and anyone that says they don't should be disregarded when calculating spending averages. So here we are going to make some educated guesses and modify the figures above presented by the APPMA. Why modify? Again, we suspect that the average spending for grooming of those surveyed was depressed because many of the dog and cat owners surveyed were not using professional groomer and their zero spending was averaged into the final results. Therefore, APPMA is not wrong, but we wrong if we are to use their results to project how much a pet owner will spend on grooming IF they use a groomer.

Today we can assume from PetGroomer.com Pricing Survey 2005 that average one-time grooming fee in the U.S. is $34.70. Let's figure $34.00 to be conservative. If the APPMA's $107 for dog owner annual spending on "groomer/grooming aids" is more like $90 after you deduct the unknown percentage for "grooming aids," this would mean that dog owners using professional groomers frequent their groomers less than 3 times a year ($90 divided by $34.00 is 2.6 grooming services a year). Every groomer knows that we have some "once a year" clients, but they are not the majority of our U.S. grooming clientele by any means.

What we are suggesting is to modify the APPMA results to create a more realistic viewpoint of what pet owners actually using professional groomers are really spending. Now, this is a little tricky and requires some "new math." (Ha!) Please remember these are simply projections and there is no way without additional input from those surveyed by the APPMA to derive more realistic figures for grooming spending based upon those that are actually using services. Here are our modified results:

Remember the Gallup Poll said 43% of their surveyed pet owners used pet grooming services at least once. But that is only one time as a requirement to answer positively. Our guess is that dog and cat owners that regularly use professional pet groomer services is somewhere between 20% to no higher than 40% of all dog and cat owners in the U.S. Based on the chart above modifying the results of the APPMA by removing the dog and cat owners that don't use grooming services, our projected range of annual spending of dog and cat owners using grooming services regularly is $210 to $236 a year (40% to 20% respectively).

Let's go back one more time to the $34.00 average service derived from the PetGroomer.com Pricing Survey 2005. By dividing $34.00 into $210.00 a year for grooming services (see table above) we can derive that the "average" dog/cat owner using grooming services would visit their groomer about 6 times a year spending $34.00 per grooming (figures approximate). Doesn't this seem more reasonable?

Most groomers agree that "regulars" book appointments every 6 to 8 weeks. Six to eight weeks can be translated to approximately 6 to 8 times a year as well. There is then a great deal of synchronicity here and we assert that $210 a year is a far more accurate number for the average annual spending of dog/cat owners when you consider ONLY those dog and cat owners actually using professional pet grooming services.

Had we prepared financial projections for a business plan using the unmodified APPMA figures of $107/$24 (dog/cat) instead of the $210 argument we make here, the projections would have been deflated by nearly 50%. However, it is wise to be conservative when doing income projections for business plans, so at least we would have been well on the side of conservatism and not "in blue sky."

We must remind you that the APPMA figure also included grooming aids, but with no breakdown. Therefore our study is not scientific or to be used as an accurate resource as to how much dog and cat owners are spending on grooming. We do know from 40 plus years experience that regular clients do indeed average appointments every 6 to 8 weeks and we have a very accurate $34.00 per grooming (based on the world's largest grooming price surveys conducted here). The absolute conclusion is then that the figures presented by APPMA are correct for their survey, but do not reflect the actual spending by dog and cat owners consistently using grooming services in the U.S.

No one else in the pet grooming industry has studied and written so many business plans and financials as has Find A Groomer Inc., the owner and operator of PetGroomer.com. You will find many new tools to produce market for grooming projections and financial projections in a new product called Grooming Business in a Box™ at www.groomingbusinessinabox.com.

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