Britons are splashing out on “high-end” food and accessories for their animals despite the squeeze on incomes, according to the boss of Pets at Home Group.
Lyssa McGowan, chief executive of the pets retailer, credited a surge in what she called “premiumisation”, saying that “people are really wanting their pets to have the best and treat them like children. This is particularly prevalent in nutrition, with households buying more raw, fresh and freeze-dried foods. It’s hard to say whether they’re spending less on themselves as result.”
Revenue rose by 6.6 per cent to £1.4 billion in the 12 months to the end of March, thanks to better food sales and a strong performance from its veterinary services division. Membership of its VIP loyalty club rose to 7.7 million, while the number of new subscribers to its Puppy & Kitten Club averaged more than 24,000 per week.
However, Pets at Home suffered a 17.7 per cent fall in annual pre-tax profit to £122.5million from £148.7 million previously because of the absence of any benefit from the disposal of its specialist veterinary business and the cost of completing the group’s new distribution centre.
McGowan, 45, said the business had also noted a rise in “humanisation” — households treating their animals like people, particularly when dealing with complex surgery and healthcare issues. She said “penetration” was the third structural growth lever in the market.
“We definitely had a pet boom during Covid, but what we’ve seen since then is that people are continuing to welcome pets into their family, she said. “They’ve got more confidence that hybrid working is here to stay and Gen Z, particularly in urban areas, are buying more and more into pet care.”
Pet ownership boomed during the pandemic, as people rushed to buy animals for company during lockdown periods. McGowan said demand for pet services remained robust even though coronavirus-related restrictions had ended and people were spending more time in the office and travelling.
The chief executive joined the company from Sky UK last year after the departure of Peter Pritchard, 52. Amid stiff competition from rivals including Amazon, the powerhouse American retailer, Pritchard set about reducing prices and enhancing Pets at Home’s focus on more profitable services, such as grooming and veterinary care. Now his successor has unveiled plans to develop a unified pet care app, via which customers can book services such as surgical appointments and repeat prescription deliveries. McGowan is also targeting growth of 7 per cent in sales and 10 per cent in pre-tax earnings over the medium term.
“I’ve got no more vision into the future as any banker or economist, but I do know we will navigate through whatever the world throws at us in the coming five years,” she said.
Shares in Pets at Home, which began the year at about 295p, fell by 9½p, or 2.6 per cent, to close at 357½p.
