Pets At Home profits slump as price cuts take toll
The group shelled out £13 million on lowering prices.
Profits at Pets At Home fell last year as the group counted the cost of an investment drive, with its new chief executive pressing ahead with a turnaround plan.
The retailer booked a 16.6% decline in pre-tax profits to £79.6 million in the year to March 29, while revenue grew 7.8% to £898.9 million.
The group shelled out £13 million on lowering prices, which Pets said was getting a “positive reaction” from customers and resulting in rebounding merchandise sales.
Pets also outlined a £5 million increase in the provision held for practice loans in its veterinary business, which dragged on the bottom line.
New chief executive Peter Pritchard, who is overseeing a turnaround at the group, said: “Our plans to reposition retail are working, more customers are coming back to shop with us, and we are committed to returning the business to profit growth. But it hasn’t been easy.
“We took decisive action, threw passion and energy into it, and delivered targeted pricing changes to give customers the products that mattered most to them, with the service and value they expect from us.”
Mr Pritchard added that he will focus the group on digital transformation, tapping into the “vast potential” of customer and pet data.
Like-for-like sales were up 5.5% over the year, with Pets At Home describing the market as “resilient”.
During the recent bank holiday weekend heatwave, sales of pet cooling products jumped 447%, with doggy paddling pool sales up a whopping 1,239%.
The company will open up to five superstores, 20-25 vet practices and 10-20 “grooming salons” this year.
Pets also flagged the crisis in the supply of veterinarians following the Brexit vote, which is influencing the pace of growth of new practices.
“The challenging supply of veterinarians has long been a feature of the UK market and was exacerbated after the Brexit vote (around 30% of vets in the UK are thought to be EU domiciled).
“The supply of veterinarians is unlikely to change in the short term and our priority is to open practices in quality locations for the best vet partners.”