Interview: Peter Pritchard of Pets at Home
Amid the turmoil that is rocking the retail sector, people are increasingly embracing their pets as members of their families and boosting their spending accordingly, which is fueling ongoing growth at Pets at Home that continues to deliver strong growth.
Ahead of giving the keynote address at The Retail Bulletin Omnichannel Futures Conference in February, Peter Pritchard, CEO of Pets at Home, reveals that the company is currently benefiting from what he describes as a “triple whammy” comprising increasing numbers of customers who are visiting the stores more often and spending more money with the company.
Continued growth no fluke
This has helped Pets at Home deliver 10 consecutive quarters of revenue increases with 15% like-for-like growth enjoyed over the past two years and an 8% uplift reported in Q1 this year. “We seem to be bucking the trend of bad news in retail. It’s a very different mood [in Pets at Home] to the dreadful retail story. It’s not a fluke. We changed two years ago and whereas most retailers put the shop at the centre of their business we put the pet owners at the centre,” he explains.
This has proved particularly important because although Pritchard says the needs of animals have not changed – “they need food and love” – the pet owner is very different today than previously. A critical element of this is the fact that pets have become part of the family.
“When people celebrate family events they include the pet. There’s a bit of dressing them up type fun but it has to be safe and comfortable for the animal,” he says, citing the fact that if a family are out trick or treating then the dog will join them and could wear a Pets at Home pumpkin outfit and on Christmas morning it could have its own stocking along with the rest of the family.
Premiumisation of pet food
This trend is also driving the changing requirements for food stuffs. Whereas some years ago Pets at Home found it tough competing with the supermarkets when selling the likes of dog and cat food the situation has changed dramatically over recent years.
“We’re now selling more versus the supermarkets. They struggle as they’ve not evolved their offer. We sell everything from raw to natural foods. Many customers now take their beliefs and transpose them onto their pets and so want to give them food containing grass-fed beef. It’s about premiumisation and the supermarkets lack expertise here and require the [right] people,” says Pritchard.
Pet food is also a feature of the growing Pets at Home subscription services that involve 700,000 customers currently signed up to some form of subscription service or other – from vet health plans, to food on repeat home delivery schedules, and monthly flea subscriptions. “We’ve gone from zero to 700,000 in two years,” he says, adding that often the initial conversation about such services are undertaken in Pets at Home stores.
Knitting together the channels
Pritchard says the stores are a vital component of the company’s proposition as people increasingly move across different channels when on their shopping journeys. “Online is big and growing from a current 12% of total revenues. We’re channel agnostic. For us it’s not about online or offline, we think about the pet owner and their journeys. We avoid there being a competition between channels and we knit them together,” he says.
There are presently 452 stores, which Pritchard says it about the right number but acknowledges there will be some ongoing relocations and right-sizing. Pets at Home stores cover 95% of the population, with this quota of people being a 15-20 minute drive time from their nearest outlet. Within 130 of these stores are veterinary practices that complement the 340 standalone practices. Such services are a very important part of the model and represent 35% of revenues and Pritchard says an ambition of the company is to build this to 50% over the next five years.
Leveraging the value of data
Being able to track people across the various channels and services, whereby there is a single view of the customer, is a journey that Prichard says Pets at Home is on alongside many other retailers. Such a move is evidence of the retailer increasingly using data to fuel its activities: “This is a fundamental shift we made two years ago. One of the roles I created was chief data officer. It’s central to what we do. We’ve also recruited some data scientists. Our simple ambition is to know the pet owners better than our competitors.”
Part of this is the company’s VIP club that connects transactions in-store and online with customers, as well as linking them to their interactions with the vets, and other services like grooming. At present there are five million active members and they account for a healthy 70% of group revenues. This clearly provides the company with some powerful insights and the data suggests that Pets at Home now has greater visibility of pet numbers in the UK than the Government with its official figures.
“They say there are eight million dogs and nine million cats. I believe they have under-called this. We’ll probably become the authority on it. We can outdo them on ownership numbers. We know that one in three dog owners and one in four cat owners shop with us,” he says.
Although Pritchard does not expect these numbers to rise, he says the opportunity for Pets at Home is based on the share of the wallet that he does not yet have from the current pet owners in the UK. “It’s a cradle to grave service to pets. It’s our point of difference,” he says.
Words by Glynn Davis.
Hear Peter Pritchard speak at Retail Bulletin’s Omnichannel Futures Conference on 5 February. Retail Bulletin readers qualify for a 50% discount on ticket prices when using the code RETAILER50 when booking.
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