Families ‘will cut back on cars and eating out before spending less on pets’
The boss of Pets at Home has said cash-strapped households would rather cut back on eating out and buying a new car before spending less on their furry friends.
Peter Pritchard, the retailer’s outgoing chief executive, vowed to keep prices competitive despite cost pressures, but said he expects spending on pets to remain resilient amid the cost-of-living crisis.
He told the PA news agency that pet owners will “maybe not be eating out as much or buying a new car.
“People will be looking at big ticket items first.”
But he said: “Undoubtedly some customers are going to have challenges, without question.”
The group is looking to “step up to the plate”, by cutting costs in the business to help offset surging inflation to avoid passing the hit on to customers.
It has seen its own energy bills double, alongside rising costs elsewhere, but said it will “always look to ourselves first” before increasing prices.
Annual figures from Pets at Home revealed a record profits haul as the firm capitalised on the boom in pet ownership during the pandemic.
It posted a 65.3% surge in underlying pre-tax profits to £144.7 million for the year to March 31 on like-for-like sales up 15.8%, as it attracted a record number of new customers, with 7.3 million members now signed up to its pet club.
Reported pre-tax profits on a 53-week basis rose to £148.7 million, up from £106.3 million the previous year.
The company said it is “not immune to current industry-wide inflationary pressures, in particular the impact of raw material, energy and freight costs”.
But it added: “We have clear plans in place to keep our pricing competitive for customers, while doing everything we can to reduce our own costs.”
The group has already taken measures to help reduce its soaring costs, including targeting rent reductions, procurement savings and operational efficiencies.
It said these actions should help keep it on track to meet City expectations for underlying pre-tax profits of £151 million for the current financial year despite the inflation pressures.
The group added that it sources more than 80% of its goods from its home market, which is helping to limit freight and shipping costs.
“We continue to work closely with our broad base of suppliers to mitigate inflation where possible across the supply chain,” it said.
Mr Pritchard, who will hand over the reins to Lyssa McGowan at the end of May after 11 years in charge, said: “Despite another period characterised by significant and evolving external challenges, our performance this year has been noteworthy, delivering record sales, profit, and cash flow.
“I hand over leadership of this great business to Lyssa McGowan with the utmost confidence that Pets at Home will continue to create value for all stakeholders in both the near and longer-term.”