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Pets at Home sales top £1bn in a year of pandemic disruption – and growing pet ownership

Members of Pets at Home's puppy and kitten club have more than doubled over the last year. Image: Fotolia

Pets at Home full-year sales topped £1bn for the first time in a year marked by pandemic disruption. The pet supplies and services business says pet ownership grew by an estimated 8% during the year, and owners turned online in greater numbers than before during Covid-19 restrictions. 

As a result the retailer says it has seen a step change in its business, with omnichannel sales up by 71.7% on the previous year to account for 15.8% of sales, up from 10% a year earlier. 

Today it reported total sales of £1.14bn in the year to March 25 – a year that started with the first Covid-19 lockdown. That’s a rise of 7.9% compared to the previous year. Sales grew by 8.7% on a like-for-like basis, which strips out the effect of store openings and closures during the year. 

The strongest growth came in the second half of the year, when retail sales grew by 11.9%, including 4.9% growth in in-store sales – despite national lockdowns. Sales in its First Opinion vet practices also grew by 19.1% as an average of 9,000 new clients registered every week. At the bottom line, full-year pre-tax profits of £87.5m were 6.4% down on the same time last year, after a repayment of £28.9m in Covid-19 related business rates relief. 

Looking ahead, the retailer now expects that pre-tax profits in the 53 weeks to March 31 2022 will come in at between £120m and £130m. 

Peter Pritchard, Pets at Home group chief executive, says: “We ended this unprecedented year a far stronger pet care business. Despite challenges as to how we were able to do business, we grew our market share across all channels and our underlying growth trajectory accelerated. Our loyalty clubs saw record periods of new customer registration, strong growth in subscription customers increased the visibility and quality of our sales profile, whilst new clients across our veterinary estate helped increase practice profitability and cash flow. We achieved all of this while remaining mindful at all times of doing the right thing for al our stakeholders.

“Covid has structurally changed the dynamics of the pet care market. We estimate that the rising level of pet ownership, combined with structural demand drivers such as premiumisation and humanisation has increased the outlook for growth across our addressable market and in conjunction with our expectations of continuing to take market share, provides a tailwind to the £600m customer revenue opportunity we see across our business over the medium term.”

Multichannel strategy

Pets at Home says its omnichannel model gives it a strategic advantage in the UK market. Its 425 stores enable pets to buy everything they need – from products to services – under one roof, while its online operations help it to deliver a more convenient service. Its stores are now more digitally enabled, with video functionality now linking online customers to in-store staff. Over the last year, it says, its share of the online pet care market grew by an estimated 16.8%, while investments in distribution in the last couple of years helped it to meet higher levels of online demand with “minimal disruption”. 

More customers signed up for its Puppy and Kitten clubs (+60.9% year-on-year), especially in the second half of the year. Members of the clubs typically spend 34% a year more than non-members at Pets at Home. Subscription customers grew by 21% during the year to pass the one million milestone – generating more than £90m a year in repeat customer sales. 

The retailer now plans to invest in infrastructure and will spend £20m on its Polestar project to further digitise the customer experience, using data to understand the customer lifetime journey – and plan relevant investments.  It says it sees a £600m sales opportunity as it increases its share of a growing market. A team of 45 data scientists now analyses data from its 6.2m active VIP members, informing decisions in areas from pricing to range optimisation and logistical efficiencies. A single view of the customer and the household now enables it to predict customer preferences and how shoppers will respond to specific campaigns, while offering personalised interactions across the full pet lifecycle. By predicting which customers are “most at risk of churn” it can target those customers with “relevant interventions”. 

This was supported by simplification of the remote sign-up process to loyalty programmes and subscription plans over the year. Subscription sales grew by 34%, while home delivery of veterinary medicines grew by 35%. Some 80% of the record feel of new puppy and kitten sign-ups came through its app.

New ways of delivering included deliver to car at more than 150 stores, alongside a new one-hour click and collect service across its fun estate. 

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