Using furlough scheme is ‘moral judgement’ for retail, says Pets at Home boss

The specialist retailer, which reported a rise in full-year pre-tax profit and a record £1bn in sales, said in its results that it had chosen not the use the job retention scheme, which offers to pay 80% of furloughed colleagues’ salaries in a bid to minimise redundancies.

Pritchard said retailers had to make a “moral judgement” about whether they needed to access the scheme in order for their business to survive the coronavirus pandemic.

“The fact the government has put such a comprehensive scheme in place is fantastic. We went back to look at the principles of the scheme, which were to ensure organisations didn’t make people redundant, and to help those organisations who had significant financial stress to help them cope,” said Pritchard.

“We entered this crisis with £162m worth of liquidity, we’ve continued to trade and while our profitability is down, we didn’t feel the need to access either the government job retention scheme or government loans.”

Pritchard said he believed retailers “who are literally taking revenue” should “look at things very carefully” before deciding to use government funds to prop up their payroll and operational costs.

“It is really important that every [business] looks at whether they actually need it or not. It’s there to help businesses that really need it so each business has to make a moral judgement as much as anything else,” he said.

“The scheme does place a restriction on your business and the ability to run it. We haven’t accessed it, we don’t need to and we can actually look after our own people.”

Pritchard’s comments come as other retail bosses such as Matalan’s Jason Hargreaves have come under criticism for asking lenders to inject £50m of government-backed funding into the fashion group. Hargreaves, a Monaco-based tax exile, was reportedly reluctant to dip into his £600m personal wealth, which put him on The Sunday Times Rich List last year.

Matalan reopened 15 of its stores this week after the government changed its definition of what qualified as an ‘essential’ retailer, but the majority of its 232-strong store estate remains closed and the bulk of its store colleagues have been furloughed.

Other retailers, including etailer PrettyLittleThing, have been slammed for making use of taxpayer’s money to furlough staff despite parent company Boohoo reporting strong trading and profitability.