Following today’s release of Pets at Home’s figures for the 28 weeks ending 10th October 2024; Emily Scott, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Pets at Home’s H1 FY2024/25 results reveal a retailer that, while still profitable, is navigating some headwinds. Group revenue grew by a modest 1.9%, but this was largely driven by its vet offer, which saw a stellar 18.2% increase in like-for-like sales, masking a flat performance in retail, where l-f-l sales were stagnant. Despite the retailer’s claims of a strong competitive position and customer satisfaction, the results show that its core retail business is not performing as well as it could be. Although the pet retail market may be subdued, other retailers l-f-l growth indicates that Pets at Home is not fully capitalising on market opportunities or effectively expanding its retail customer base. For instance, one area of growth in the market is direct-to-consumer brands, for example with pet food, where brands deliver personalised pet food straight to the consumer’s door.
“Pets at Home’s digital strategy, which was supposed to be a key growth driver, seems to have fallen short of expectations. While its app sales have doubled, this is in the context of a transitional phase where web traffic initially dipped after the launch of its new platform in March, causing disruption to online sales. This drop in web sales suggests that its new platform is taking longer than anticipated to gain traction and is concerning. However, Pets at Home is continuing to invest in improving the site, such as by increasing personalisation through using shopper data. Its website will be vital going forward as consumers continue to increasingly shop online, especially during the lead-up to Christmas.
“The standout performer in Pets at Home’s portfolio is its vet division, with 18.6% total growth and 18,000 new registrations per week as consumers continue to invest in their animals’ health. Pets at Home has recently opened a new concept store in Kettering which has been labelled a ‘pet care centre’, combining a store with a veterinary practice. Further expansion of store formats, including this concept, could help capitalise on changing consumer preferences, focusing on convenience-driven retail. The differentiated joint venture (JV) model has proven to be a strong driver of growth, helping the business outperform its veterinary peers in terms of the price and the availability of locations to choose from. However, Pets at Home should not just rely on the Vet Group for growth, as this will likely slow. The strong growth in subscriptions and veterinary services demonstrates that consumers are willing to spend on pet health, so Pets at Home needs to translate this willingness into spend on its retail products. This could be done by capitalising on its relaunched Pets Club which gives consumers access to deals, vaccination courses and tips for pets.”
