Lockdown puppy boom provides double-digit sales boost for UK's biggest pet retailer
In a trading update, the group revealed a 17.5 per cent surge in retail sales in its festive quarter. Like-for-like sales accelerated further in December, growing by 19.3 per cent.
It comes after the group hiked its profit outlook earlier this month on the back of strong trading, revealing it now expects to deliver at least £77 million in underlying pre-tax profits for the full-year to March.
The chain has been boosted by a surge in demand for pets among Britons since the start of the coronavirus crisis while its essential status has allowed its stores to remain open throughout lockdowns.
Peter Pritchard, group chief executive, said: “I remain confident that the changes we have made to our business enable us to continue providing essential pet care to our customers in a safe and appropriate manner, not only through strict adherence to the protocols which we introduced across our stores and veterinary practices at the onset of the pandemic, and continue to strengthen, but also in a number of other ways, from contactless collection and delivery of pet products to virtual heath care consultations.
“I am very pleased with the progress we have made in this quarter, in particular how we have adapted to the changing environment in which we operate.”
Sophie Lund-Yates, equity analyst at financial services firm Hargreaves Lansdown, said: “The lockdown puppy boom is doing wonders for Pets at Home’s revenues.
“The sales of the items needed to get a new furry friend set up at home will have boosted performance. But it’s the other aspect of increased UK pet ownership that makes ears prick up.
“The continued rise in the group’s VIP and Puppy and Kitten Club memberships have long-term benefits. The increased data these memberships provide will help Pets at Home hone its offering, which should act as a sales boost.”
Pets said its 47-strong vet arm had also enjoyed solid trading, with like-for-like revenues up 17.8 per cent in the quarter and surging by 21.4 per cent in December.
In response to the pandemic, the group has launched a one-hour click and collect service across its 451-strong store estate, and a “deliver to car” service across more than 150 stores.
Its trading has also been buoyed by growing membership of its VIP and puppy and kitten clubs, with the latter typically spending around a quarter more than non-members.
Ross Hindle, retail sector analyst at Third Bridge, noted: “Pets at Home is continuing to benefit from a rise in pet ownership during the pandemic and a growing trend of pet food premiumisation.
“Growth in high margin pet food has flowed through into pet accessories, as consumers look to humanise and spoil their new four-legged friends.
“Pets at Home is expected to outperform the market, with long-term margin expansion aided by a strong private label offering. However, the repayment of the business rates relief and added Covid-19 costs will create short-term margin pressure.”