Pets at Home sales climb as cost of living pressure fails to leash demand

Pets at Home shrugged off cost of living pressure in its first quarter as sales and customer numbers continued to climb.

Group revenues jumped 7.9 per cent year-on-year to £436million in the three months to 20 July as veterinary and retail sales rose by 16.3 and 7.1 per cent, respectively.

Revenue growth was attributed to both price hikes and volume growth, with customer numbers in its ‘VIP’ base up 4 per cent to 7.7 million, and its Puppy & Kitten and Vet Group units adding 22,000 and 18,000 new subscribers, respectively.

Pets at Home’s growth continues as cost-of-living pressures fail to derail demand 

Julie Palmer, partner at Begbies Traynor, highlighted growth in vet services versus retail revenue, noting the former is likely to be more expensive, meaning Britons ‘are still willing to spend to get [their pets] back to health’ despite the cost-of-living squeeze.

She added: ‘With Pets At Home “comfortable” with the City’s forecast that it will post a profit of approaching £140million this year, it might just be that pet care is as close to a recession-proof business as you can get.’

Pets at Home enjoyed record sales last year, despite tough comparisons with the previous 12 months when it was bolstered by a pandemic-induced boom in pet ownership.

The growth has allowed the group to open two new pet care centres, develop its digital platform and launch a new in-store nutrition subscription over the last quarter, Pets at Home said.

While it maintained full-year profit expectations of around £140million for the year, it said first-half earnings will impacted by additional costs, including £6million to ‘ramp up’ its new distribution centre and a £2million brand relaunch.

Adam Vettese, analyst at trading and investment platform eToro, said: ‘The pandemic has created a much bigger target market for Pets at Home, which fuelled sustained demand for the retailer’s services. This is reflected in the company’s growing revenue and VIP subscription numbers.

‘Various studies have shown that pet owners are more willing to splash out on their furry friends than themselves, which helps explain the retailer’s sustained growth over the past few years, even as the economic background has deteriorated.’

Pets at Home shares were down 0.3 per cent to 371.6p in early trading.

Lyssa McGowan, chief executive, said: ‘Our performance in the first quarter has been encouraging. 

‘The quality of our growth has remained strong as we grew transaction volumes and continued to acquire new consumers at an impressive rate, as our compelling value, range and service continues to resonate with consumers.

‘It has also been a quarter of steady delivery against our strategic plan we set out in May. 

‘We have expanded and enhanced our physical estate, made good progress in the development of our digital platform, and continued the transition to our new distribution facility, as we execute on our ambition to build the world’s best pet care platform.’

This post first appeared on Dailymail.co.uk