Growth continues for veterinary clinics, according to the Veterinary Industry Tracker from analytics company VetSuccess and the AVMA, which monitors daily revenue and visits across thousands of veterinary practices.
As of March 1, year-over-year revenue increased, on average, 9.1%, and patient visits increased 3.0%. Revenue increased in every category except that revenue for boarding and grooming and for over-the-counter medicines remained flat.
Pet owners are saying yes to getting more products and services during their visits. The number of line items per visit increased 7.22%, said Katie McClean, managing director of VetSuccess. She and Matthew J. Salois, PhD, chief economist for the AVMA, spoke during the AVMA Axon webinar “Exploring industry trends of today and tomorrow” on April 30.
McClean said the amount that owners are paying for products and services also went up about 10%. VetSuccess hopes to dig more into which products and services those are exactly and whether clinics have seen an increase in the number of visits per patient.
And while practices have increased prices, which contributes to greater revenue, McClean said, the increase in prices wasn’t as important a factor as the average service revenue. VetSuccess also hopes to find more information in this area soon.
When looking at whether certain clients are contributing more to increased revenue, McClean said, “We found that no one group or type is contributing a higher proportion than any other type. Active clients, lapsed, lapsing, and new are all pretty consistent across the board post–March 2020.”
Dr. Salois noted that the overall economy is healthy, and there’s reason for optimism. The most recent stimulus package played a critical role in shoring up the economy, along with COVID-19 vaccines. As a result, overall consumer spending increased 10% for the week ending April 4, compared with January 2020, according to the Opportunity Insights Economic Tracker from Harvard University. Many consumers are planning post-COVID spending and travel in the later part of the year, Dr. Salois said, also noting that there are supply chain pressures and the rising prices of commodities, which could contribute to inflation.
“2021 is going to be a year of continued transition,” he said. “COVID remains a crisis, but one we are moving out of. It has also become an imperative for companies to transform or re-look at operations and strategies.”
Referring to “the next normal,” Dr. Salois said certain things that affected veterinarians during the pandemic will come and go, while there are certain adjustments that will likely stick. Curbside service won’t go away, at least not entirely.
“It gives an opportunity for clients to think things over and make decisions,” Dr. Salois said. “The data is pointing out they are going to higher-value products because they see the value proposition there. That’s worth digging into more.”
Digital transformation is another change that’s here to stay. E-commerce grew at strong rates in 2020 and remains high. Dr. Salois said veterinarians who aren’t selling online will have trouble selling offline.
“Many practices rose to the occasion and made incredible changes to delivery models of veterinary care and their business strategy so they could survive during volatile times,” he said. “Don’t let your guard down. Not because of the economy, but we’re in a moment of hyperflux during a transitioning economy. To remain relevant, you need to remain nimble. To do that, talk to your clients and understand what is driving the increased value offering. That may look different between clients. "Understanding that can help future decisions.”