Pets at Home: Retailer narrows sales declines after cutting prices on over 1,000 products
Pets at Home has revealed sales declines improved at its retail store chain after slashing prices on more than 1,000 products.
The group reported a 1.1 per cent drop in retail consumer revenues in its third quarter to January 1, marking an improvement on the 2.3 per cent drop seen in its first half.
It said sales by volume lifted across food and accessories ranges over the Christmas quarter.
Pets at Home cut prices by an average of 12 per cent on more than 1,000 products as part of its plan to revive the retail chain’s flagging fortunes.
Its vet business also continued to offset tougher trading at the retail chain, with sales up 5 per cent in the division.
Overall revenues fell 1 per cent to £358m in the quarter, but shares in the firm lifted 4 per cent in Wednesday morning trading.
Interim executive chairman Ian Burke said last November that “urgent and necessary” measures were needed to turn around the firm’s retail arm as the group revealed half-year profits tumbled by more than a third.
It has since named former Waitrose managing director James Bailey as its incoming chief executive to replace Lyssa McGowan after she quit abruptly in September amid profit warnings and sliding sales.
Mr Bailey will take up the role on March 30.
Mr Burke, who took the helm on an interim basis after Ms McGowan left, 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 per cent.”
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 update comes after the Government outlined plans to overhaul the vet industry, including ensuring practices are transparent about treatment options and pricing to increase competition.
This follows Competition and Markets Authority findings that fees have risen at almost twice the rate of inflation.