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Pets at Home boosted by digital initiatives in Q1

Pets at Home has reported a strong start to its financial year, supported by a number of new online initiatives that have boosted its overall retail performance.

The pet care retailer said its new ‘easy repeat’ service, which allows customers to choose around 350 online products for automatic repeat delivery and have them delivered to home or for click & collect at a specified regular time, is growing momentum. It said it is beating online competitors on price with these ranges, too.

In its first quarter results statement, the company said is overall price gap to online retailers has halved in the past 18 months, while omnichannel revenue for the period jumped by 47.3% year on year to £19.1 million.

Covering the 16 weeks to 20 July, the trading period generated group revenue growth of 8.1% to £277.4 million – £245 million from retail, which includes online sales, and £32.4 million from its veterinary business.

Pets at Home group CEO Peter Pritchard commented: “There are so many initiatives that are working: great promotions and more lower prices, capitalising on the hot weather with our biggest ever summer and cooling product range, the launch of our easy repeat online delivery service, and an excellent 'Best Start in Life' puppy healthplan campaign in vet practices.

“We are also bringing our offer together more effectively with the launch of the VIP puppy club online and on our app, which introduces customers to both sides of our business.”

As part of the retailer’s ongoing investment appraisal of new stores, it has decided not to open two stores for which lease arrangements had been committed at a cost of around £1.6 million, which the company said will be absorbed within first-half underlying profit.

Although such a move is indicative of the unpredictable retail environment, Pets at Home said its full-year profit and cashflow outlook remains in line with expectations and previous guidance.

Like Starbucks, which reported a positive trading figures last week, Pets at Home has a successful loyalty scheme. VIP scheme customer frequency and spend is up, with the number of VIPs who purchased products and a service increasing by around 16% year-on-year in Q1.

Pritchard is not resting on his laurels, though, and said the hard work will continue, particularly in terms of making the most from its growing vet services business.

He added: “I believe we need a sharpening of focus to become a business that will continue to win over the long term, where it is essential that we maximise our assets and data as an integrated pet care business and reinvigorating the customer experience in-store becomes key.

“We know one of the biggest opportunities in our business is to accelerate the maturity and returns of our vet practices. We therefore need to address the challenges, such as the shortage of veterinary practitioners and the associated cost and cashflow support that is required. At the same time, there will always be a need to keep our retail pricing competitive.”

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