Pets at Home boss eyes future growth from ‘boom’ in pet ownership

The pet care retailer suffered a 5.1% decline in pre-tax profit to £40m during the 28 weeks to October 8, but like-for-like sales rose 5.1% to £574m 8 as more consumers decided to welcome pets into their homes.

Pritchard said the growing number of people getting pets during lockdown would be Pets at Home’s “biggest driver of future revenues” as the company targets further top-line growth.   

Pritchard told Retail Week: “What we’ve seen happen in the pet care sector, as more people work from home and stay at home, is that there have been more new pets this year, so we’ve seen a growth in the overall pet population.

“For us, this is the biggest driver of future revenues. We sort of think of it like a baby boom – if people have acquired a puppy this year, they’re going to have that dog for the next 15 years of their lives, so that accelerates the market overall.

“Coming into the pandemic, the pet care market was in good growth and that really reflects how us humans are changing our relationship with pets and spending more money on them.

“The outlook for the pet care market is still very positive and that’s a worldwide phenomenon, not just a UK one.”

Pritchard attributed Pets at Home’s decline in profits during its first half to a series of one-off and ongoing Covid-related costs, as well as a loss of revenue in the first quarter.

He added: “Although we were deemed to be an essential business like everybody in pet care – we’ve been on a level playing field with our competitors – our business was impacted on a number of fronts. 

“Our veterinary business had restrictions placed on it by the Royal College of Veterinary Surgeons, which meant we focused purely on emergency treatments. 

“We closed our grooming salons for between eight to 10 weeks as we made them Covid-safe. Therefore, there was a loss of revenue in the first quarter. 

“On top of that, like most retail businesses, we had a series of one-off costs to make our stores Covid-safe, as well as some ongoing costs.”

Pets at Home gained £15m in business rates relief in the first six months of the pandemic, but Pritchard said the the impact on profitability due to lost revenues and one-off costs was £25m, meaning that if things balance out over the next half then profit will be in line with last year’s figures.

Pritchard also said the business accrues around £150,000 worth of ongoing incremental costs per week, particularly due to the increased numbers of store colleagues and opening hours.