Pets At Home to open at least 40 new stores under £400m growth strategy
The firm’s chief executive Lyssa McGowan said the group was spending £400 million on an ambitious growth plan.
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Your support makes all the difference.Retailer Pets At Home has unveiled plans to open at least 40 new stores across the UK under aims to become the “world’s best pet care platform” after posting record annual results.
The firm’s chief executive Lyssa McGowan said the group was spending £400 million on an ambitious growth strategy that would see it expand its chain of pet care centres from 457 to around 500 over the medium term, with urban areas such as London particularly in its sights.
She told the PA news agency the group would open possibly more than 40 stores as the boom in pet ownership seen during the pandemic shows little sign of abating, despite the cost-of-living crisis.
People are more confident they can work from home and they're getting pets younger
Her vision for the group, which follows a year after she took on the top job, came as Pets at Home posted better-than-expected annual profits, with record sales helping offset soaring energy costs and higher investment spend.
The group reported underlying pre-tax profits of £136.4 million for the year to March 30, up 4.8% or 8% higher on a 52-week basis as the boom in pet ownership seen since the pandemic started helped sales jump 6.6% to £1.4 billion.
Ms McGowan said there had not been a marked drop off in pet ownership, with membership of its VIP loyalty club easing back only a little from a peak during Covid of 29,000 a week for new puppies and kittens to around 24,000 now.
This remains “significantly” higher than before Covid struck, she added.
She told PA: “People are more confident they can work from home and they’re getting pets younger.
“Generation Z are getting pets way younger than Gen X or Y – that opportunity is there for the taking.”
Ms McGowan said the group had risen prices over the past year, but held back from passing on all the cost pressures it has been facing.
Around two thirds of its pet food sales volume growth has been from from price hikes, but it has held prices firm on its accessories ranges.
She said it was hard to predict prices over the year ahead, but pledged to pass on any cuts if its own wholesale costs fall, saying “we will look to pass that on”.
Ms McGowan unveiled plans alongside the results to “build the world’s best pet care platform”, with the bricks and mortar stores complementing an all-in-one pet care app, offering services including allowing customers to book surgical veterinary appointments, order repeat prescription deliveries and manage nutrition subscriptions.
Her growth plans also include targeting growth of 10% for pre-tax profits and 7% for sales each year.
But costs of investment are set to hold back profits growth over the year ahead, with the group sticking by guidance for underlying pre-tax profits of around £136 million in 2023-24.
It is set to take another £15 million in costs from its switch to the new warehouse.
The group’s latest full-year figures show like-for-like sales jumped 13.4% across its Vet Group chain, while retail revenues lifted 7.5%.
The profits leap came despite energy costs soaring by £14.9 million and a £5.9 million spend on digital investment.
On a reported basis, pre-tax profits fell 17.7% to £122.5 million after last year’s figures were boosted by gains from the sale of its specialist group business, as well as costs of its new Stafford warehouse.