Pet industry inflation slowed to 2.5% year-over-year in August, down from 2.6% in July, according to new data from industry analyst John Gibbons of PetBusinessProfessor.com.
Pet prices dropped 0.2% from July to August and is now -13.8% below the National inflation rate, with pet products declining while pet services increased. Pet food prices fell 0.3% month-over-month but remained 0.2% higher than August 2024. Pet supplies dropped 0.6% from July, while veterinary services and other pet services both rose 0.1%.
Mixed performance reflects broader economic pressures
The mixed performance reflects broader economic pressures impacting consumer spending patterns. National grocery prices jumped 2.7% year-over-year in August, up from 2.2% in July, marking the highest rate since August 2023, Gibbons noted.
Pet food continues to remain below overall grocery inflation, with year-over-year deflation occurring in 15 of the past 18 months. The segment's 2025 year-to-date performance shows prices declining 0.3%, an improvement from negative 1.1% in January.
Service segments drive the majority of current pet industry inflation at 5.1% combined, while pet products show just 0.1% inflation. Veterinary services maintain the highest average inflation rate at 6.6% since 2019, compared to pet supplies at 1.9% and pet food at 3.6%.
Despite the recent moderation, cumulative price increases since 2019 remain substantial. Pet prices overall are 28% higher than pre-pandemic levels, with current August prices for veterinary and other pet services at historic highs. Total pet and pet product prices sit within 0.7% of their record peaks.
"We tend to focus on monthly inflation while ignoring one critical fact," said Gibbons. "Inflation is cumulative. Pet prices are 24% above 2021 and 28% higher than 2019. Those are big lifts. In fact, current August prices for Vet & Services are the highest in history."
The pricing environment creates challenges across different industry segments. Gibbons expects veterinary services to see reduced visit frequency, while product categories may experience shifts toward online purchasing and private label options. Pet food could face downgrading pressure as consumers adjust spending habits, he noted.
Tariffs could compound pricing pressures
Looking ahead, potential tariff policies could further complicate the pricing landscape, particularly for pet supplies, which would likely face the greatest impact from new trade restrictions.
Gibbons said the August data continues a pattern of volatility that began in late 2021, when pet industry prices started an upward trajectory following an extended deflationary period.
"Since price/value is the biggest driver in consumer spending, inflation will affect the pet industry," said Gibbons. "Some pet parents may even downgrade their pet food. Strong, cumulative inflation has a widespread impact, but tarifflation can hit even harder."
