Pets at Home today reported strong growth in omnichannel sales as it enabled a growing number of pet owners to buy across sales channels during the Covid-19 pandemic.
The retailer, ranked Top50 in RXUK Top500 research, said omnichannel sales were up by 65.8% in the first half of its financial year, compared to the same time last year. It said previous investment in digital commerce meant it was well-placed as those sales grew from 10% to 15.2% of its revenue in the previous year.
Overall revenue grew by 5.1% to £574.4m in the 28 weeks to October 8, with retail sales up by 5.8% to £507.8m on a like-for-like basis that strips out the effect of store – and business – openings and closures. Vet group revenues rose by 1.2% to £66.6m. At the bottom line, pre-tax profits of £38.9m after one-off costs were 14% ahead of the £34m reported last year.
Pets at Home chief executive Peter Pritchard said changes to work and leisure patterns had meant more people were able to own pets. “We are introducing new ways to meet our customers’ needs across all channels, making pet care as affordable, convenient, engaging and flexible as possible,” he said.
He said the retailer had acted quickly to adapt its operations at the beginning of the pandemic and that its focus on gaining new customers had helped it to grow its market share across all channels. The retailer sells online and through 451 shops around the UK, many with on-site vet practices, and introduced new approaches including contactless collection.
Now, Pets at Home is preparing for a potential no deal Brexit, taking action to mitigate the effect of tariffs, logistics, vet availability and currency.
Over the past six months Pets at Home has invested in new digital journeys, as it raised awareness of services including its Puppy and Kitten Club and its VIP programme and introduced remote appointment booking to its vet clinics – and it hopes to enable remote consultations in the future. In the future it aims to make half of its revenues from pet care services.
It has invested in fulfilment capacity, since it says that the key to winning more customer spending is to deliver goods to them in frictionless, convenient and yet profitable ways. Recent innovations include one-hour click and collect. It is now working to enable ship from store via an order management system (OMS) that gives real-time intelligence on the best order management and routing so that the company can offer convenient services in a cost-effective way.
Looking ahead, Pets at Home is using data from its 6m active VIP members to learn about the services that its customers would like to use, from a customer and household-based view of pet ownership. Data is being shifted to Google Cloud and a team of 45 data engineers and scientists is now analysing that for “actionable insights”.
“Empowering customers to shop in a way that best meets their needs requires a true omnichannel approach, using data to integrate a well-invested store estate, a fast-growing online business and an efficient, modern and responsive supply chain into a single customer-centric platform delivering a seamless pet care experience,” Pets at Home said in today’s statement. “During the [half-year], we continued our investment in leveraging data to make pet care even more convenient, engaging and flexible, creating value for both our customers and our shareholders.”
Pets at Home says that it continues its work to mitigate the effects of Brexit, and will stay vigilant to signs that consumer demand is being hit in order to respond. It says that it does not expect to be affected by tariffs as most of its products are sourced either from the UK or from outside the EU, and that pet products are unlikely to spoil as a result of border delays. If its supply chain becomes disrupted it may need more inventory to mitigate that effect. The company says it will work closely with professional bodies in the industry to assess what effect the end of free movement will have on staffing – although Brexit may mean recruitment of highly skilled staff is easier since vets are now on the shortage occupation list.