The interim chair of Pets at Home, Ian Burke, has warned that “urgent and necessary” action is required after the retailer reported a 33.5% slump in half-year underlying pre-tax profit to £36.2 million for the 28 weeks to 9 October. The company, which is still searching for a permanent chief executive following the abrupt departure of Lyssa McGowan in September, saw its retail business profits fall 84% to £3.5 million, with revenues down 2.3% to £679.9 million.
Burke, who stepped in as interim CEO, said the chain must “return to our retailing roots” to revitalise the 34-year-old business. The group’s veterinary services arm, Vets for Pets, performed strongly, with revenues up 6.7% to £376 million and profits rising 8.3% to £45 million. However, overall profits were dragged down by the retail division, which has been hit by a shift in the market for advanced nutrition products and a decline in accessories sales.
The company identified two key causes for the retail struggles: overexposure to traditional brands in the advanced nutrition market, where new premium entrants are selling directly to consumers, and a 5.9% year-on-year fall in accessories sales, partly blamed on “self-inflicted” issues such as not having the right products at the right price points. A £20 million cost-cutting programme is being implemented to address these challenges.
Pets at Home enjoyed a boom during the Covid lockdowns, hitting a record £1.1 billion in annual sales, but its share price has since fallen to pre-pandemic levels. The company now expects full-year underlying pre-tax profit of between £90 million and £100 million, with Vets for Pets contributing over £80 million. The veterinary sector faces regulatory pressure, with the UK competition watchdog proposing measures to cap prescription costs after finding prices had risen 63% between 2016 and 2023.
