US consumers have so far been largely shielded from sharp price increases, partly because manufacturers and retailers have negotiated, changed assortments and accepted thinner margins to hold shelf prices. Most observers expect prices to rise eventually. The roughly $31 billion pet food and supplies category shows what that could look like.
When what sounds simple is not so simple
Higher prices reduce units sold; lower prices increase them. Elasticity measures how much. But three different effects are at play:
- Own-price elasticity — volume lost when a manufacturer raises its own price.
- Cross-price elasticity — volume that moves to a competitor, such as the product next to it on shelf. Bad for the manufacturer.
- Cross-retailer elasticity — shoppers moving to another store that sells the same item for less. Bad for the retailer.
How each side responds depends on the strength of its brand.
Pet food: modest impact, real switching
$25.4B
US pet food spend, 2024 (NIQ xAOC)
6–10%
of pet food is imported and tariffed
−1.22
estimated elasticity
~$2.34
extra per pet-owning household a year
Between $1.5 and $2.5 billion of pet food is at tariff risk. Assuming a blanket 10% tariff, with retailers and manufacturers absorbing part of it, pet owners would pay about $200 million more. With an elasticity of −1.22, a 10% price increase cuts volume on tariffed products by about 12% — and because there are many non-tariffed alternatives, much of that volume will move to direct competitors.
Toys and treats: a much bigger hit
80–90%
of the market is imported, mainly from China
$5.1B
of $5.9B 2024 spend subject to tariffs
~35%
“best guess” tariff rate on China at writing
31%
likely volume loss on tariffed products
If shoppers keep buying, US consumers would spend an extra $20.35 a year. Here, nearly every manufacturer will have to raise prices, so there is less room to switch — the winners will be those who manage pricing best, but the category as a whole is likely to lose volume.
Three tips for executives facing similar uncertainty
- 1Build price elasticity models at SKU level to capture cross-price effects and price ladders — competition can come from inside your own line.
- 2Build retailer-specific models. Elasticities seldom transfer between retailers, and the balance of own- and cross-price effects varies by retailer.
- 3Work with teams that have built SKU- and retailer-level elasticity models many times. These models are now fast and affordable to build.
| Category | Publix | Target | Walmart |
|---|---|---|---|
| Dry cat food | 70% | 50% | 60% |
| Laundry detergent | 67% | 25% | 29% |
| Ready-to-eat cereal | 44% | 40% | 70% |
| Salad dressing | 38% | 50% | 33% |
Source: Big Chalk Analytics and NorthLight Analytics, amalgamated price elasticity studies, 2024–2025.
October 2025 · 2 min read · NorthLight Beacon 1.4
Download PDFAbout the authors
Big Chalk is a Chicago-based marketing analytics company serving CPG, retail, quick-service restaurant and other consumer-facing brands.
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