Pet owners don't seem to be spending any less on their pet's food, though they do claim to be cutting back in other areas, including toys and treats. According to the American Pet Products Association, retail sales of pet food grew 4.5% in 2009 to roughly $18 billion. This number is expected to reach $21 billion by 2013.
According to this Denver Post article, Kathy Shmidt says they don't take their miniature schnauzer to the groomer as often to save money, but this hasn't affected food purchases much. "He needs to eat what he's accustomed to."
Pet prices have actually increased lately because of rising costs, but people still seem to be spending on pet nutrition.