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Pets at Home delivers good start to the year

Published: 3 August 2018 - Fiona Garcia
 

The pet products chain said it was “on track” to deliver its plan for the year, as it posted sales growth of nearly 7% forQ1, with like-for-like (LFL) sales up 5.3%, boosted by demand for pet cooling products and investment in digital initiatives.

Group revenue, including Pets at Home’s vet business, increased 8.1% to £277.4million for the 16 weeks ended July 19, compared with the same period last year.  Retail revenue growth was up 6.9% to £245million, including omni-channel revenue, which grew 47.3% to £19.1million.

The recent heatwave meant Pets at Home has seen a surge of popularity for pet cooling products, such as travel water bowls and doggy paddling pools. Sales over the Early May Bank holiday weekend alone accounted for 25% of the cooling products sold so far this year.

The rise in temperatures saw total sales of pet cooling products surge 447% compared to the previous cooler weekend. Pet owners flocked to buy doggy paddling pools and cooling mats, with sales up 1239% and 516% respectively, compared with the previous weekend.  

The retailer has also sold tens of thousands of pet water bottles so far this year, including thousands over the first May Bank holiday weekend alone.  

Retail like-for-like revenue growth was up 5.3% and the retailer says its continues to strengthen its price position to competitive levels. According to the report, Pets at Home’s overall price gap with other online retailers has halved in the past 18 months.

As well as competitive pricing, the retail chain has focused on making purchasing processes easier, including launching 'easy repeat' delivery across around 350 online products. The aim is to provide more convenience to customers by offering an automatic repeat delivery to home or to collect in-store.

The performance of its VIP customer club, which offers members discounts and exclusive deals, also continues to improve, with both frequency and spend up amongst VIP customers. The number of VIPs who purchase products and a service has increased around 16% year on year.

On the high street, the pet supplies chain opened one store during the period - in line with its plan for the year- and taking its estate to 449 outlets. Pets at Home also decided against proceeding with the opening of two new stores for which lease arrangements had already been committed. The decision was taken as part of the retailer’s “ongoing investment appraisal of new stores” the full cost of the leases, at around £1.6million, will be absorbed within underlying profit in the first half.

Meanwhile, its full-year profit and cashflow outlook remains in line with expectations.

Pets at Home group chief executive officer Peter Pritchard said of today’s results: "I am really pleased with our start to the year, particularly as trading across both retail and the vet business has been consistently strong. There are so many initiatives that are working: great promotions and more lower prices, capitalising on the hot weather with our biggest-ever summer and cooling product range, the launch of our easy repeat online delivery service, and an excellent 'Best Start in Life' puppy healthplan campaign in vet practices.

“We are also bringing our offer together more effectively with the launch of the VIP puppy club online and on our App, which introduces customers to both sides of our business.

“We have made great progress with these initiatives, particularly the ongoing momentum in retail more than a year on from the start of our price repositioning programme. But I believe we need a sharpening of focus to become a business that will continue to win over the long term, where it is essential that we maximise our assets and data as an integrated pet care business and reinvigorating the customer experience in-store becomes key.

He added that the business will continue, “to deliver the three year financial plan we have committed to”, and said: “I am confident that we have a really exciting future ahead and am looking forward to sharing this strategy in more detail at our November interim results presentation.”

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