Animal magic for Pets at Home as loyalty clubs boom

dogPets at Home has hailed its customer loyalty strategy as a major factor in its annual retail revenues surpassing £1bn for the first time as Covid has triggered a huge rise in pet ownership.

The company said that because the coronavirus has forced more people to work from home and changed their leisure habits, the ‘historical barrier’ to adopting pets had been lifted.

Pet ownership has grown by 8% in the UK over the last year, resulting in retail revenues increasing by 8.8% to £1.02bn and total sales rising by 7.9% to £1.14bn in the year to March 25.

Puppy and kitten-based products climbed by 37% and 26%, respectively, as pet-smitten Brits stumped up cash on toys, comforting blankets, dog coats and heated puppy beds.

But it was not all boom from the gloom; salon closures over the first ten weeks of the financial year, as well as other restrictions throughout the period, caused sales from grooming to plunge 29.2% to £19.6m.

However, membership of the Puppy & Kitten Club loyalty scheme jumped 60.9%, while VIP customer numbers grew 9% to 6.2 million. The company said loyalty club members spend up to a third more than the average customer.

Underlying pre-tax profits came in ahead of guidance, though it fell by £6m to £87.5m as the group voluntary paid back £28.9million in business rates relief and was hit by around £30m in Covid-related costs.

Statutory profits, nonetheless, still jumped by £30.5m to £116.4m, as the group benefited from the £100m sale of five specialist veterinary centres, which provide treatments for more difficult medical cases, to Linnaeus Group.

Chief executive Peter Pritchard said the pandemic had been “a catalyst for change around customer purchasing behaviour and pet ownership”, and the company responded by investing more in its loyalty clubs and subscription platforms.

He added: “We ended this unprecedented year a far stronger pet care business. Despite challenges to how we were able to do business, we grew our market share across all channels, and our underlying growth trajectory accelerated.

“Our loyalty clubs saw record periods of new customer registration, strong growth in subscription customers increased the visibility and quality of our sales profile, while new clients across our veterinary estate helped increase practice profitability and cash flow.”

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