Pet Industry Market Recap 2024: Shifting Trends And Strategic Moves In A Changing Landscape

The pet care industry experienced an overall revenue decline in 2024, with noticeable regional differences. Most notable downturn (nationwide) was in daycare services. Rising labor costs and softening revenues placed pressure on profit margins and business valuations causing a tightening of the historically high-profit margins the industry has enjoyed; operational (focused on labor) efficiencies has become a critical factor for sustaining profitability.

Amid these challenges, in-home pet care services gained traction in select urban markets, increasingly capturing market share from traditional brick-and-mortar facilities. This shift underscores the need for businesses to innovate and adapt strategically to maintain a competitive edge in the evolving pet care landscape.

Acquisition Market: Strong Activity and Increased Seller Flexibility

Despite financial challenges in the consumer sector, acquisition activity remained robust throughout 2024. A growing number of investors and private equity firms entered the pet industry, providing business owners with more flexible exit strategies. Sellers now have the opportunity to pursue full acquisitions or retain equity by partnering with investors for brand expansion while reducing day-to-day operational involvement.

Corporate buyers have become more disciplined in their approach, focusing on key factors such as geographic regions, revenue performance, strength of management teams, and labor efficiency when assessing potential acquisitions. The evolving market landscape has made deal structuring increasingly diverse, allowing business owners to tailor their exit strategies to align with long-term objectives while considering 'cultural fit'.

Looking Ahead to 2025: Key Industry Trends and Market Outlook

Consumer Market: Shifting Preferences and Intensified Competition

The pet care industry is expected to undergo continued disruption in 2025, particularly from in-home and app-based service providers gaining traction in high-density urban markets. Traditional pet care facilities must implement strategic innovations to stay competitive in this evolving environment.

Inflationary pressures are influencing consumer spending, particularly among multi-dog households, leading to increased price sensitivity. Pet owners are prioritizing value-driven options, including discounts, loyalty programs, and bundled services.

Millennials and Gen Z consumers continue to be the primary drivers of industry growth, favoring convenience, seamless digital interactions, and personalized pet care services. To meet these evolving expectations, pet care businesses must enhance their digital accessibility through app-based booking, streamlined check-in/check-out processes, and subscription-based service models. A strong, multi faceted online presence, client engagement strategies, and tiered pricing structures will be crucial differentiators in an increasingly competitive market.

Rising labor costs will remain a significant challenge, directly impacting both profitability and business valuation-especially for those considering a sale. To maintain financial stability and maximize enterprise value, businesses must proactively manage labor expenses and optimize operational efficiencies.

Acquisition Market: Strong Demand and Favorable Conditions for Sellers

The pet care acquisition market is expected to remain strong in 2025, with demand for high-quality, well-managed businesses continuing to outpace supply. Companies demonstrating strong profit margins with labor control processes, high EBITDA, and upward-trending revenues will attract heightened buyer interest leading to multiple offers and providing sellers increased flexibility in choosing acquisition partners and deal structures.

Market conditions suggest that 2025 will be a 'seller's market', particularly for well performing, high-quality pet care businesses. Multi-site operations are in strong demand, commanding the highest valuation multiples due to their scalability and market share. With the supply of premium assets remaining scarce, high-caliber facilities are well-positioned to secure premium valuations and maximize exit strategies in the coming year.

PET|VET Achieves Record-Setting Year in 2024

PET|VET solidified its industry leadership by successfully closing 20 transactions in 2024, representing a total enterprise value exceeding $52 million. Additionally, 11 transactions went under contract at year-end, with closings expected in Q1 2025. This momentum underscores PET|VET's ability to facilitate high-value transactions and strategic growth within the pet care industry.

Conclusion

The pet industry is undergoing significant transformation, with shifting consumer behaviors and an evolving acquisition market shaping the competitive landscape. Businesses that prioritize innovation, operational efficiency, and strategic market positioning will be best equipped to thrive in 2025 and beyond. PET|VET remains committed to supporting pet care entrepreneurs and investors as they navigate this dynamic industry.

For media inquiries or additional information, please contact:
Teija Heikkilä, CEO
[email protected]
970 549 6138

About PET|VET M&A, Sales &Advisory
PET|VET is the leading advisory firm specializing in mergers and acquisitions within the pet care industry. With a proven track record of successful transactions, PET|VET helps business owners navigate complex market conditions and secure optimal outcomes.

SOURCE PET|VET M&A, Sales & Advisory

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