SUMMARY OF REPORT CONTENTS

            UK Pet Market - Product Mix by Value 2008    

Pet accessories are part of the larger UK pet market that was valued at £4.7 billion at RSP in 2008, an increase of 4% from the previous year. The pet accessories market was estimated to be valued at £647m at RSP in 2008, representing steady growth despite the deteriorating economic climate. Since 2006, growth levels have been steady due to value growth at the upper end of the market, product innovation and the continued expansion of pet superstores, especially Pets at Home.

The UK pet product market can be divided into 4 main sectors: pet food, pet accessories, vet/insurance fees and kennelling. Pet accessories is the third largest sector by value as shown in the chart. Pet accessories can be divided into 4 main sectors - toys (37%), care products (32%), storage & feeding (21%) and collars, leads & utility products (8%).

The pet accessories market has been characterised by changes in types of pet ownership, increases in the number of households and a demand for more convenient products. The market has performed reasonably well and is generally less affected by adverse economic conditions, as many products are either viewed as necessary purchases or are low value items. The market remains very competitive in 2009 with high levels of imports, e.g. bedding and toys markets, and a prevalence of closely competing products. The supply structure remains highly fragmented despite several acquisitions in recent years, with only 4-5 companies having market shares at or above 5%.

The toys sector has outperformed the overall pet accessories market, having been stimulated by an increase in the number of innovative products and trading up to higher quality products.

Although care products saw lower growth than the toys sector, this market includes the growing markets of flea and worm treatments, which have seen sales increasing as deregulation has widened distribution channels. The aquarium products and cat litters sectors have also seen growth, whilst grooming equipment and vitamin and minerals saw some loss of share in 2008. The storage & feeding sector only experienced low growth, but benefited from good growth in the cages and tanks/aquariums sectors. Collars, leads & utility products is a market in slow decline, mainly due to the reduced levels of dog ownership.

Many suppliers / retailers are indicating that 2009 to date has not seen any market decline, though some high value products, e.g. large aquariums, and non-necessities are forecast to see lower rates of growth 2009-10. Pet superstores now account for an estimated 35% market share and are forecast to continue to grow at the expense of independent pet shops – reflecting their ability to offer more comprehensive ranges.

The pet accessories market is forecast to continue to be highly fragmented although the current difficult economic climate will undoubtedly result in a number of business failures, as well as further acquisition activity. Annual growth is expected to improve between 2011-13 when the pet accessories market will be worth £822m at RSP.