(Bloomberg Opinion) -- Cryptocurrencies aren’t the only assets to have seen their value driven up recently by hordes of eager buyers. It’s the same for cockapoos.
Bitcoin has risen about 170% so far this year. In the U.K., a Yorkshire terrier is up by about the same amount. I'd argue that it’s a price worth paying (for a dog, not a punt on crypto), given the returns for your mental well-being.
Pets becoming more expensive reflects demand outstripping supply, as lonely homeworkers clamored for companionship during pandemic lockdowns and remote employment made it easier to care for furry friends during the day. Many more people around the world sought out dogs, cats, rabbits and even ferrets this year.
In the U.K. in April and early May, there were more than 400 buyers for every pet advertised, according to Pets4Homes, a digital platform that connects breeders and rescue shelters with those seeking to bring an animal home. That fell to around 200 buyers as the U.K. reopened but has risen again with tightening restrictions.
With supply relatively stable, breeders could charge much more for their animals. The average cost of a dog in the U.K. was up 131% in the third quarter of 2020, compared with the year earlier. As the chart below shows, many popular breeds exceeded that. Meanwhile, the average price of a cat was 42% higher this year.
Pets are expensive to look after, too. Peter Pritchard, chief executive officer of British retailer Pets at Home Group Plc, describes the increase in ownership as a “baby boom,” with the new household members unleashing an avalanche of demand for food, accessories, toys, grooming and veterinary care.
Globally, the pet food and products market — excluding prescription health care — is worth about $138 billion, according to Euromonitor International, with much of the growth coming online. No wonder shares in digital retailer Chewy Inc. are up about 150% this year.
Although an animal’s love is, in many ways, priceless, the considerable financial outlay makes it worth asking: What’s the benefit? Or, as I like to say, what’s the Return on Invested Cat?
A cat generally costs between 7,500 pounds and 10,000 pounds ($10,100 and $13,473) over its lifetime, according to Pritchard, excluding vet bills. But whether you’re lucky enough to have a lap-loving feline or have to make do with a more standoffish moggy — like my own, Pearl, who demands food and offers only the occasional cuddle — what seems to matter is that the animal still provides a sense of closeness.
As for dogs, an owner would spend nearly 17,000 pounds over its lifetime. And the psychological benefits are even clearer than with cats. A canine friend brings you companionship, enjoyment and a routine.
A recent survey of 6,000 U.K. pet owners by the University of York and the University of Lincoln found that all pets — be they rabbits, rodents or even reptiles — eased feelings of loneliness during the first pandemic lockdown in the spring. Horses, dogs and cats seemed to provide the most comfort, but the emotional bond felt with birds and guinea pigs wasn’t that far behind.
One danger of a pet market boom (for the animals, at least) is what happens when the forces that made them so sought after in 2020 begin to reverse. If remote employment becomes less prevalent, or if economic consequences of the pandemic deepen, some people may be forced to part with their pets. In the financial crisis, many stretched families abandoned their animals.
Thankfully, there are few signs of this happening. It helps that many new pet owners are affluent young professionals, who should still be able to afford dog sitters, walkers and veterinary care once they’re back in the office. Maybe the fashion for dog yoga will even stick around. Plus, many people who wanted a pet this year couldn’t find one. They may be able to step in if friends or relatives can’t continue their commitment.
Let’s hope that a dog is for life, not just for lockdown.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.
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