With all the news on TV about impending economic doom and gloom I thought it important to discuss how this news impacts the pet industry.

Recent indicators show that the pet industry, while not impervious to the overall economy, has the ability to rise above the fray – and the current trends are a good case in point. The spending trends are such that the industry looks set to continue to prosper through 2008. This trend, however, is going to be difficult to maintain if the general economic conditions deteriorate into 2009 and 2010.

There has been plenty of talk about a “credit crunch” in the past 6 months, as subprime lenders feel the effectives of years of loose lending guidelines. While this may be a form of a “credit crunch”, it certainly isn’t the more dangerous liquidity crisis that stems from questionable monetary policy. This is actually good news for your pet business because it means people will still have the cash to spend on their pets should they want to.

A liquidity crisis would be far worse than a credit crunch for petrepreneurs. During a liquidity crisis, pet owners would find that cash is just more difficult to come by and purely discretionary purchases, even for their pets, would be negatively impacted. Tough cash situations usually means switches to lower priced food products, delaying travel (no sitting serviced needed), home grooming, and purchasing fewer toys and treats for their furry family.

The 2007 credit crunch could be the first of several waves of poor economic news to hit us. While we can take comfort in the knowledge that the pet industry is beating the current general economic trends, we should use this time to strategically position ourselves and our businesses for success and profitability.