Pets at Home on the right track

Of this figure, £245 mio (+  6.9 per cent) was accounted for by the retail business and £32.4 by the veterinary business (+18.4 per cent). In the preceding 2018 fiscal year, which finished at the end of March, a repositioning of Pets at Home's retail business was carried out. This move was necessitated by the increasingly fierce competition between Pets at Home and online retailers. "We noted a change in customer behaviour in our retail business," said Tony DeNunzio, non-executive chairman of the company, explaining the necessary changes in pricing policy in the annual report. "This involved a move away from promotional offers and vouchers, and towards a simpler, more competitive approach," added DeNunzio. This approach began with a campaign that lowered prices and highlighted the value in Pets at Home's private label Advanced Nutrition.A target for the future declared by Peter Prichard, who became group CEO at the end of April, is to "target price investment into those product areas that we believe drive shopper frequency and loyalty". Although a competitive price position is to remain part of everyday strategy in the future too, Prichard confirmed that "this will not be on the same scale as the prior financial year".In fiscal 2018, Pets at Home increased its sales compared with the previous year by 7.8 per cent to £898.9 mio. Like-for-like sales grew during this period by 5.5 per cent. However, the trading margin declined in 2018 by 2.5 per cent to 51.7 per cent. This was attributable to the aforementioned new pricing initiatives implemented by the company during the year.At the end of the first quarter of the new financial year, Prichard nevertheless expresses satisfaction with the measures introduced. "We have made great progress with these initiatives, particularly the ongoing momentum in retail more than a year on from the start of our price repositioning programme."

As well as making changes to its pricing policy, Pets at Home invested heavily last year in digital, which Prichard says helped to deliver omnichannel revenue growth of 75 per cent. The group CEO names order-in-store and subscription for flea products as the two initiatives driving such strong growth. Pets at Home also made improvements…