Pets at Home [IRDX RPAT] said its income from omnichannel was up by 81% to £24m during its latest half-year, thanks to order in-store and subscription services.
The specialist pet supplies retailer, a Top50 retailer in IRUK Top500 research, reported group revenue of £468m in the half-year to October 12, up by 6% on the same time last year. Retail income of £396.7m was up by 4.6%, while services revenue of £61.9m was 15.3% up on last time. Pre-tax profits of £40.8m were 11.3% down on the same time last year.
Chief executive Ian Kellett, who has announced he will leave the business next May, said: “Our strategic progress and trading momentum have steadily improved through the first half of the financial year. In the Merchandise business, our like-for-like sales grew by 5.1% in the second quarter, driven by our pricing changes, omnichannel offer and product innovation.
“Our veterinary business is taking market share and hitting the revenue and profit growth levels expected from both the First Opinion practices and Specialist Referral centres. We see the potential for significant future profit growth in our Vet Group, where 75% of practices are yet to mature.
“We are confident we are taking the right actions to reposition our merchandise business and having seen the results from our initial investments, we are accelerating our plans. There remains much to do and we will continue to evolve our strategy and adapt to customers’ needs in what remains a competitive market place.”
Here’s what it said about its multichannel strategy.
Revenues from omnichannel sales grew by 81% during the period, with almost half of online orders collected in store. The two key drivers, said Pets at Home, were its order in-store service and its subscription flea treatment.
It now aims to extend subscriptions to more products and has optimised its online checkout process for customers using mobile devices. “Investing in omnichannel and evolving to adapt to customers’ shopping needs is crucial in being able to deliver more convenience and leveraging our strategic differentiators,” it said in today’s results.
It opened nine new superstores during the period, taking its total to 442, and closed one in Wrexham. It plans to open 10 new superstores during the period, and will also open new grooming salons and vets pratices. It has trialled a convenience store format, with a Pets at Home now part of the Tesco Extra in Durham.
Fast growth in services revenue helped to lift sales in the first half. More than half (55%) of its 450 stores had vet practices (447) and grooming salons (301) by the end of the period, up from 49% a year earlier. Some 28% of customer revenues were spent on those services despite, the company said, “these being such young businesses”. It added: “Incorporating services into our offer increases overall customer spend and loyalty and also delivers an improved profit outcome, with EBITDA per square foot 24% higher in a mature store with services, compared to a store without services. Our group strategy is therefore centred around encouraging customers to shop with us through more channels, and use more services.”
By the end of the first half, the Pets at Home VIP club had 3.8m members, up from 3.6m a year earlier. Some 69% of revenue came through transactions in which the loyalty card was swiped. That’s up from 65% the previous year.