The boss of Pets at Home has said that a pandemic boom in demand for puppies and kittens is over as the company warned weak demand is not expected to recover soon.
Chief Executive Lyssa McGowan pointed to ‘normalising levels of new pet ownership’ after a ‘massive’ Covid-driven increase faded.
This ‘feels like a real headwind’ for the FTSE 250 business as puppy and kitten owners tend to ‘spend a lot of money in retail in the first year,’ McGowan added.
The number of new cat and dog owners is not growing at such a rapid rate.
‘We are lapping years of boom with – not quite bust – but much lower growth and stabilisation,’ she said.
Pets at Home reported revenues little changed at £1.48 billion while profits rose 14 per cent to £121 million, as it warned consumer confidence would continue to be ‘subdued’ this year.
But McGowan said she was hopeful the group would be able to boost sales of products for ageing pets, such as salmon oil or supplements which help with aching joints.
And a record number of owners signed up to its loyalty scheme, with members rising 5 per cent to 8.2 million.
Higher costs include national insurance contributions and minimum wage increases, which McGowan described as ‘significant and unexpected’.
In response, the business is increasing its use of automation and artificial intelligence across its 450 stores and distribution hubs.
And the chief executive warned that the looming threat of a cyber attack was now ‘the new normal’ after high-profile episodes involving retailers such as Marks and Spencer.
Retail sales slumped 1.8 per cent to £1.3 billion for the year to March 27. In contrast, its veterinary services division saw sales improve by 16.8 per cent to £175 million.
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