Money's No Object For Pet Lovers

It's never been a better time to be a dog or a cat.

Americans, in love with their pets, are spending more money than ever on upscale food and care products.

Consumer spending on pets is expected to rise by about
$1 billion this year to $21 billion, a healthy 5 percent increase, according to the American Pet Products Manufacturer's Association.

Americans are buying more pets too. About 58 million households owned one or more pets as of 1996, an increase of 5 million from two years prior, according to the most recent data available.

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This year, Americans will spend about $8.5 billion on pet food, $3.8 billion on pet supplies and medicine; $1.1 billion to buy pets, and about $5.8 billion on veterinarian services.

"Consumers are more and more treating their pets like people," said Don Stewart, a pet products marketing consultant with Cannondale Associates of Wilton, Conn. "It's more of an emotional purchase."

Fueling the pet craze is growing consumer appetite for products sanctioned by veterinarians.

Brands such as Iams pet food or Sergeant's new Pre Tect line appeal to consumer because they used to be offered through vets. Pre Tect, for example, is based on products formerly available by prescription. The price? About $9 for a big dog treatment, and $7 for smaller dogs. A version for cats is coming later this spring.

"The driving force behind a lot of these products is the country's aging population," said Joel Adamson, vice president of marketing for Sergeant's. "Folks reach the the age of 40 or 50, and they use their pets to show affection."

At the retail level, stores are battling for growing pet care dollars.

Supermarkets, who have lost market share to pet superstores such as Petsmart or Petco, are starting to fight back.

Supermarket chain Big Y Foods in Springfield, Mass., for example, has set aside a "Paws" center, which carries thousands of more pet items than in the past.

Independent pet stores are holding their own through individualized service and niche products. For example, Vietnamese potbelly pigs were big for a while. This year, ferrets are popular.

Dennis Yanney, manager of Noah's Ark Pet Store in Sioux City, Iowa, said he competes with the chains by offering lower prices - and expertise.

"After they go into the chain store, they come here and see the quality that we offer," he said. "A goldfish is not just a goldfish. There are different types."

Plus it doesn't hurt that consumers are more willing than ever to lavish money on their pets, he said.

It's typical for owners to spend $30 to $40 on a 40-pound bag of top quality pet food. That's three or four times more expensive than generc brands, which sell for $10 to $14 for a 40- or 50-pound bag.

"People today have more money," said Yanney, who has been in the pet business for 32 years. "They're willing to spend incredible amounts."

In these times of wild pet spending, Yanney said he learned an important lesson when a woman walked into the pet store and asked for two identical dog dishes. He had two that were the same, except one had a picture of a cat on it instead of a dog.

"I said that the dog wouldn't know the difference, and she got mad," he recalled. "I learned that you can insult a customer's kid, but never insult their dog."

Written by Steve Gelsi, CBS