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The Bottom Line
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Your essential guide to global business and technology
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Why spending on pets has soared | | |
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On my daily commute recently I spotted an ad for a pet-food brand that is “taste-tested by humans”. As I started digging, I began to find all sorts of startups offering swanky products for pets. One Australian pet-care brand even sells a dog cologne. Which got me thinking: is there anything people won’t do for their fur babies these days?
Americans certainly seem to love their pets. So much so that politicians have taken note: in this week’s presidential debate Donald Trump sought to whip up outrage among voters by repeating a bizarre rumour for which there is no evidence that Haitian migrants in a town in Ohio were
eating residents’ cats and dogs.
Americans spent $186bn providing for their pets last year. That is more than they spent on childcare. It is also up from just $122bn in 2019, far outpacing the growth in overall consumer spending. The covid-19 pandemic, during which many people adopted furry companions, helped. But,
as I write in my article this week,
shifting attitudes towards domestic animals are also leading people to splurge on them like never before.
Younger generations, who are putting off getting married and starting a family, tend to think of themselves not as their pet’s “owner”, but as its “parent” (or perhaps its “best friend”). And they act accordingly, taking them to the vet more often, feeding them fancier food and buying them more gifts. Around half of Gen Z pet owners surveyed by the American Pet Products Association said they throw parties for their dog on its birthday. It’s all a bit ruff on the wallet.
What do you make of all this? Please write to us with your thoughts at:
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Fast fact: Mars, a company best known for its chocolate bars, makes two-thirds of its revenue from its pet-care division. | | |
Your preview of next week | | |
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Monday September 16th
The euro area publishes export figures for July. Exports to America were up in June, year on year, but fell sharply to Britain, China and Japan.
An appeals court in Washington will hear TikTok’s challenge against its potential ban in America. TikTok and the government want a ruling on the appeal by December 6th, so that they can take the case to the Supreme Court before the ban comes into force.
Tuesday September 17th
Kingfisher, which owns the B&Q and Screwfix DIY chains in Britain and Castorama in France, reports its results. In March the FTSE 100 company said it expects profits to fall this year because of a “lag between housing demand and home improvement demand”.
Wednesday September 18th
The Federal Reserve is expected to cut interest rates for the first time since March 2020. Markets anticipate a quarter-of-a-percentage-point reduction in the policy rate at the Fed’s meeting, taking it to a range of 5-5.25%, but a half-point cut is also a possibility.
Will General Mills announce the sale of its $2bn yoghurt business when it publishes its results? The food company, which includes the Cheerios, Häagen-Dazs and Pillsbury brands among its assets, has seen its yoghurt revenues chill amid increased competition from Danone and others. Americans are eating less yoghurt by volume than in 2015, though overall sales figures are up because of rising prices.
Britain releases inflation data for August. The annual rate crept up in July for the first time this year, to 2.2%.
Thursday September 19th
The latest inflation figures will weigh on the Bank of England’s policy committee as it decides its next move on interest rates. In July the main rate was lowered to 5%, the first cut since March 2020.
FedEx delivers its earnings. A cost-cutting programme started to pay off in its most recent quarter, when profit rose despite a dip in revenues. To reduce costs further, FedEx has just invested in Nimble, which specialises in logistics robots.
Business has been booming at Darden Restaurants, best known as the proprietor of the Olive Garden restaurant chain and owner of the up-market Ruth’s Chris and Capital Grille steak houses. Sales across all Darden’s segments rose in the company’s fiscal year ending May 26th. It recently announced a takeover of the Chuy’s Tex-Mex chain. The company serves up its latest results.
Friday September 20th
The Bank of Japan meets to decide interest rates. The rate increase it announced at its meeting on July 31st was a factor in the turmoil in Japan’s stockmarket in early August. Ueda Kazuo, the governor, has said market jitters will not derail the long-term plan for more rises. Japan’s latest inflation figures are released a few hours before the bank’s decision. The annual rate stood at 2.8% in July.
Lennar, one of America’s biggest housebuilders, announces its earnings. Its share price was on the floor this year until July, when favourable inflation figures spurred hopes for interest-rate cuts, lifting property-related stocks. | | |
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Since its founding in 1968 Intel has been synonymous with shrinkage. In its first four decades this was high praise. Every two years or so the American chip pioneer came out with new transistors half the size of earlier ones, a regularity that came to be known as Moore’s law, after one of the company’s founders. Twice as many chips thus fit onto roughly the same silicon wafer—and could be sold profitably for roughly the same price. That allowed Intel to corner the market for memory chips and then, when “memories” became commoditised in the 1980s, for the microprocessors which powered the subsequent PC revolution. | | |
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