The performance of the United States veterinary services market highly depends on the pet ownership rate in the United States and consumers' per capita disposable income. In 2009 and 2010, each of these metrics declined as unemployment jumped.
With fewer dollars in their pockets, Americans cut expenditure on nonessential items, including adding new pets to their households.
Because of this, between 2008 and 2013 industry revenue declined at an annualised rate of 0.8% to $4.8 billion.
Recovery is underway, both in the general economy and within the industry. Per capita disposable income has grown since 2010 and the pet ownership rate rebound in 2011.
As a result, the US veterinary services industry has grown since 2011. In 2013, it is expecting a 1.8% increase in industry revenue. Profit (i.e. earnings before interest and tax) also suffered during the downturn, falling from 19.1% of revenue in 2008 to a low of 13.3% in 2010.
As downstream demand for emergency services has inched back up, so has profitability, totalling an estimated 18.7% of revenue in 2013.
Veterinary service operators have consolidated in an effort to maintain revenue in the face of mounting competition from superstores and online retailers that sell pet products and medications. In the past five years, the number of Veterinary Services industry operators declined an estimated 1.6% per year on average to 38,568.
Consolidation is projected to continue during the five years to 2017, with the number of expected to decline each year on average. The rise of larger practices will occur partly because of the mounting number of female veterinarians forecast to enter the work force, typically not owning practices.
Although most animal hospitals are single-site, sole-practitioner facilities, veterinarians are gravitating toward larger, multidoctor animal hospitals that provide state-of-the-art facilities, treatments, methods and pharmaceuticals to enhance the services they can provide their clients.
Industry concentration has increased in recent years due to acquisition activity, particularly by major players, VCA Antech Inc. and IDEXX Laboratories Inc. Other large industry companies include Medical Management International Inc. and National Veterinary Associates.
For more information on the US veterinary services market, see the latest research: US Veterinary Services Market
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