Pets at Home Group today said it would focus on digital, data and services in the second year of a thee-year strategic plan to move towards sustainable profit growth.
“In the coming months we will evolve our longer term strategic plan to become the best pet care business in the world; a bigger focus on digital, data, more services and changing the shape of our stores in an ongoing environment of channel shift,” said incoming group chief executive Peter Pritchard.
The vets-to-pet supplies business, a Top100 retailer in IRUK Top500 research, said income from omnichannel services rose by 75% over its latest financial year, as more customers signed up to its subscription plans and placed online orders in store. But pre-tax profits were 16.6% down after a year in which it invested £13m in cutting prices.
The update came as the multichannel retailer, ranked Top50 in IRUK Top500 research, reported group revenue of £898.9m in the year to March 29 2018. That’s 7.8% ahead of the same time last year, and includes £765.5m (+6.8% in total, +5% LFL) from retail sales. But pre-tax profits of £79.6m were 16.6% down on the same time last year, after a year in which the retailer invested £13m in making prices “better value for our customers”.
Pritchard said the value of Pets at Home was “much greater than being a retailer, or a vet care provider. It’s the way we can give pet owners a breadth of products, grooming, vet care and other services.”
He added: “Our plans to reposition retail are working, more customers are coming back to shop with us and we are committed to returning the business to profit growth. But it hasn’t been easy. We took decisive action, threw passion and energy into it and delivered targeted pricing changes to give customers the products that matter most to them, with the service and value they expect from us. Our product innovation this year has been the best I can remember and the investment we made in the development of a subscription service is bringing some excellent results, as is order in-store, which brings our full online range to every store in the business.”
The business now aims to use data to better understand its customers and their needs. “As our new CEO, my plan has a bigger focus on digital, taping into the vast potential of our customer and pet data and taking action to ensure our vet business reaches its potential. Our market has a track record of resilience in a downturn and as we adapt to a changing environment we will emphasise the things that make Pets at Home unique and best placed to serve the UK’s pet loving owners.”
Here’s what the company said about its multichannel strategy.
Pets at Home says that customers spend around three times more when they shop with the business across retail, grooming and vet services than they do when just buy from its retail stores. Members of its VIP Puppy Club, which features a range of introductory offers including a first month free for its flea product subscription and a free vet nurse check, and discounts on retail spending, spent 25% more.
It is now set to trial unlimited dog bath and brush treatments for a set fee in its grooming business, where business slowed during the last year.
Omnichannel revenue grew by 75% during the year. This, said Pets at Home, had been driven by order-in store and its first subscription, for flea products. During the year it also started to trial repeat ordering across food products. In the coming year it will add more subscriptions, and focus on improving website look, content and navigation.
Pets at Home now has 448 superstores and says it is approaching optimum space. It now plans to add up to give new stores, while adding up to 20 new grooming salons. It now has 461 vet practices, after opening 25 during the year. They include 10 super surgeries and six that open around the clock. The business says that the supply of vets has long challenged the UK market and was made worse after Brexit, since around 30% of UK vets are thought to be from the EU. It now aims to focus on “opening practices in quality locations for the best vet partners”.