Following today’s release of Pets at Home’s figures for the 28 weeks ending 12th October 2023; Jamel Boughedda, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Despite investment in a new distribution centre interrupting availability and lowering profits in Q2, Pets at Home maintained its resilience in its H1 FY2023/24, with total revenue growth of 6.5% to £774.2m as consumers continued to prioritise their furry companions. The retailer reported growth in like-for-like (l-f-l) sales in both its vet and retail divisions, up 17.3% and 5.2% respectively. Pets at Home’s transition to its new Stafford distribution centre led to a period of disruption in Q2, with instore availability dropping to around 80%, which it estimates had a 3% l-f-l drag on retail sales. However, its new distribution centre is now delivering to all stores, with availability normalising during the crucial stretch leading up to Christmas.
“Pets at Home’s sales momentum has continued, with performance in the early weeks of Q3 having improved with retail l-f-l sales growing around 4%. The retailer commented on its strong performance over Halloween, reinforcing the importance of its holiday ranges and offers in the lead up to Christmas as consumers buy treats for their pets. Its active VIP members grew 3% to 7.8 million, although this has continued to normalise as the pet boom experience during the pandemic continues to slow down. However, this has transferred to further sign-ups to Pets at Home’s vet proposition, with over 18k new sign-ups per week as pet owners continue to prioritise their animals and the integration of its 24/7 vet helpline resonates well with customers. Its vet services will be vital going forward as the essential nature of this offer will minimise the effects of any potential declines in its retail sales, as the cost-of-living crisis continues to plague consumers’ finances.
“Pets at Home has not been immune to the higher operational costs and unfavourable macroeconomic market however, with its operating profit falling by 30.9% to £41.9m. Higher logistic costs and its brand relaunch contributed to fall in profits, but the current consensus for underlying profit before tax for FY2023/24 remains unchanged at £136m. Pets at Home has continued to improve its proposition, with its new digital platform expected to launch by the end of this financial year. Developing its offer further will allow Pets at Home to remain ahead of the pack as it aims to sustain its momentum despite impacts to consumer finance and pet care demand slowing from its peak.”
