Gen Z’s Pet Obsession Fuels $150 Billion Pet Care Boom, Report

The US pet industry, now valued at $150.6 billion, is undergoing a radical transformation as retailers adapt to the demands of modern pet parents who view their animals as family. According to a 2025 Colliers report, 66% of American households—86.9 million homes—own at least one pet, driving unprecedented spending on premium care, tech-enabled products, and hybrid shopping experiences.

The Humanization of Pets Fuels Premiumization

Pet owners are prioritizing health and wellness like never before. Veterinary care accounts for the largest share of pet budgets, with 37% of owners going into debt to cover costs. Insurers are capitalizing on this trend: the U.S. pet insurance market is projected to reach $15.71 billion by 2030. Meanwhile, demand for organic, human-grade food and luxury accessories—think $500 orthopedic dog beds and giraffe-shaped cat condos—is surging, even if pets ignore these indulgences.

Retailers are responding by blending in-store and online experiences. While big-box chains like Petco and PetSmart dominate physical retail with 1,500 stores each, online giant Chewy is expanding into brick-and-mortar veterinary clinics, targeting Florida, California, and Texas. Amazon, meanwhile, continues to leverage its logistics network for rapid delivery of essentials like flea treatments and gourmet treats.

Gen Z Reshapes Retail Expectations

Younger consumers are driving demand for inclusivity and innovation. A Numerator study reveals 30% of Gen Z pet owners prioritize stores that welcome pets onsite, while 43% want cross-species products for reptiles, birds, and rodents. This cohort is twice as likely as older shoppers to seek in-store pet pharmacies and tech-integrated solutions like GPS trackers and smart feeders, which topped ETailPet’s 2025 product trends.

Experiential Retail and Omnichannel Strategies

To compete, retailers are transforming stores into destinations. PetSmart offers “Yappy Hour” discounts, grooming services, and dog daycare, while boutique shops host puppy yoga and adoption events. The shift mirrors global trends, where 45% of pet care innovation now focuses on health claims like digestive support and immune health.

E-commerce remains critical, accounting for 30% of sales, but physical stores are rebounding. Hybrid models thrive: 62% of shoppers blend online convenience with in-store browsing, per Colliers. Suburban centers, especially those anchored by grocers or veterinary clinics, outperform urban locales due to hybrid work trends.

Challenges: Inflation and Saturation

Despite growth, rising costs and market saturation loom. Veterinary leasing activity dropped 72% in 2024, signaling economic caution, while inflation pressures 90% of pet owners. Yet, APPA data shows 77% of owners refuse to compromise on care, with Gen Z households (18.8 million) adopting pets at a 43.5% annual rate.

The Road Ahead

Looking to 2026, retailers must balance innovation with affordability:

• AI and IoT: Smart collars monitoring pets’ vitals and automated feeders are now standard offerings.
• Hyper-Personalization: DNA-based diets and tailored meal plans gain traction, per Gingr’s 2025 trends.
• Sustainability: Eco-friendly packaging and upcycled materials are now competitive differentiators.

As Colliers notes, the line between pet and family spending will continue to blur. Retailers that master the “omnichannel playbook”—mixing tech, empathy, and experience—will win the loyalty of a generation that values their golden retriever’s birthday as much as their own.