Even with the overall economic recovery dragging, annual revenue for pet products and services is expected to grow 4.4% over through 2016 (one of the few industries that can say so).
The number of pet owners is growing, especially among singles and the elderly. That trend expected to continue for at least another five years, meaning this booming retail sector may provide some of the insulation investors need while the market shakes out.
We’re not just talking dog food. Billions of dollars are spent annually on everything from specialized food and spa treatments to designer clothes, outdoor gear, toys and veterinary supplies and services.
Big brands jump in
As the recovery takes hold, household disposable income will rise even faster, and spending on pets is expected to pick up even more.
A wide range of companies has jumped into the market with pet shampoo, clothing, toys and gourmet treats—Paul Mitchell, Omaha Steaks, Origins, Harley Davidson and Old Navy, to name a few.
However, most of the money spent on pet products will funnel into pet supermarkets, mass merchandisers and large retailers. In fact, two national retailers account for more than half of last year’s $53 billion in revenue.
The following three stocks in the pet-products industry are best-of-breed and should be highly rewarded this year: