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Pet Food News
on January 19, 2009

Increased petfood prices strain sales

Surging petfood expenses are pinching the profit margins of pet store owners, who say the cost increases and the declining economy are driving customers to cheaper supermarket or price club brands, according to an article from The Record.

Surging petfood expenses are pinching the profit margins of pet store owners, who say the cost increases and the declining economy are driving customers to cheaper supermarket or price club brands, according to an  article from The Record .

Petfood makers point to rising costs of energy, ingredients, packaging and transportation. Corn, a main ingredient in many dog foods, climbed to a record $7.99 a bushel on June 27, abetted by the push to use corn-based ethanol in gasoline. Oil prices surged to more than $147 a barrel in July, driving up transportation costs.

Industry experts and analysts have cited the pet products industry as one of the few to be insulated from economic troubles, but small pet store owners believe the economic slump has finally caught up with pet owners and they are shifting to the cheaper supermarket and price club brands.

At discount retailer Target Corp., dog and cat food sales have been up in the past 12 months and "are performing above our projections and exceeding expectations," said spokesman Joshua Thomas in the article.

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