Q3 retail sales down 1.1% compared to 2.3% in the first half
Pets at Home has seen its performance improve(Image: 2024 PA Media, All Rights Reserved)
Pets at Home said sales declines eased at its retail operations following aggressive price cuts across more than 1,000 lines.
The company posted a 1.1% fall in retail consumer revenues during its third quarter ending January 1, representing an improvement on the 2.3% decline recorded in its first-half results.
Sales by volume rose across both food and accessories categories throughout the festive trading period.
Pets at Home implemented average price reductions of 12% on over 1,000 items as part of its strategy to revitalise the struggling retail division.
Meanwhile, its veterinary arm continued to compensate for weaker retail performance, with turnover advancing 5% in that segment. Total group revenues dipped 1% to £358 million during the quarter.
Interim executive chairman Ian Burke said last November that “urgent and necessary” action was required to reverse the Cheshire-based retail business’s fortunes after the group unveiled half-year profits plunging by more than a third.
Since then, the business has appointed former Waitrose managing director James Bailey as its next chief executive, replacing Lyssa McGowan following her sudden departure in September. Mr Bailey assumes the position on March 30.
Mr Burke, who stepped into the interim leadership role after Ms McGowan’s exit, said: “I’m pleased to report continued strong performance in our vet business and sequential improvement in retail, as we continue to implement our retail turnaround plan.
“One of our key early actions as part of this plan included investing in our customer offer, reducing the price of over 1,000 products by an average of 12%.”
He added: “With a new chief executive and chief financial officer joining in spring, our focus for the remainder of the year is on building momentum behind our four turnaround plan priorities of price, product, cost and execution, to deliver our 2025-26 plan and to return our retail business to sustainable sales and profit growth.”
Garry White, chief investment commentator at Charles Stanley, said: “Pets at Home is holding its ground in a challenging retail environment, with its vets and subscription businesses continuing to cushion the impact of ongoing retail softness.
“The retail operation is likely to remain under pressure until consumer confidence improves, and the timing of this remains difficult to judge.”
The Pets at Home announcement follows the Government’s outlined proposals to reform the veterinary sector, including requiring practices to be transparent about treatment options and pricing to boost competition.
Veterinary surgeries will under the proposed amendments to the Veterinary Surgeons Act. be required to publish price lists for routine treatments and reveal whether they operate independently or as part of a chain.
This comes after Competition and Markets Authority research revealed that charges have increased at nearly double the rate of inflation, with pet owners receiving insufficient information about their veterinary practice and treatment costs. Meanwhile, veterinary chain CVS announced on Wednesday that it supports the Government’s proposals, which it considers will “help strengthen consumer confidence in the profession”.
