Pets at Home is about to get a new master and they’re inheriting a stock market animal with a glossy coat, healthy teeth and plenty of pep.
As the market leader in a nation of animal lovers its proposition looks compelling, particularly given many Britons added a furry or feathered friend to their household in lockdown.
This larger pet population needs feeding, cleaning and caring for when sick, and Pets at Home has got all of those angles covered thanks to its retail, grooming and veterinary arms.
“The vet business is high margin and a recently launched partnership model, pairing with independent operators, helps reduce the capital required to expand,” said AJ Bell’s Russ Mould.
“Recent growth in this part of the business was a little more prosaic than the retail division which had a particularly strong run-up to Christmas as people looked to treat their pets.
“Supermarkets and other non-specialists represent a competitive threat, but it is one that Pets at Home is facing down effectively with initiatives like its VIP Loyalty scheme, which saw a 13% increase in numbers in the 12 weeks to 30 December, supporting this fight.
“There was also substantial growth in its separate kitten and puppy clubs with all these schemes requiring relatively limited investment on Pets at Home’s part while still helping to make customers more sticky in terms of shopping with the business.
“Like most companies Pets at Home is not immune from supply chain issues but it is doing a decent job of managing these, benefiting from having a product range largely sourced in the UK which is neither perishable nor seasonal.
“Whoever takes over from incumbent Peter Pritchard will have a hard act to follow but his legacy at least means they have a fair chance of success.”