Pets at Home, the animal care retailer, has reported a subdued market due to cautious consumers. The company anticipates slower growth than expected in the next six months, despite a significant impact from the Budget.
In a recent market update, the retailer revealed a 1.9 per cent revenue increase to £789.1m for the 28 weeks leading up to October 10, with like-for-like revenue rising by 1.6 per cent, as reported by .
The slowdown was primarily observed in its retail division, which only saw a 0.1 per cent growth in the first half of the year.
Pets at Home described it as a "resilient performance against a declining retail market" and attributed it to "the previously flagged impact of our new digital platform transition."
The company's veterinary arm continued to show strong revenue growth at 18.6 per cent, supported by an increase in subscriptions, visits, and average transaction values. Operating costs decreased by 3.5 per cent, driven by productivity measures offsetting cost inflation, primarily changes to the National Living Wage, as well as lower non-underlying costs and cost control.
The company stated that changes to the National Living Wage and employers' National Insurance Contributions (NICs) announced in the Autumn budget would add £18m in cost headwinds in the financial year 2026. Pets at Home plans to "continue to proactively mitigate these cost increases where possible, including through our ongoing productivity programmes and investments in automation."
Pets at Home CEO, Lyssa McGowan, commented: "The first half of FY25 was characterised by a subdued market, against which we outperformed. In vets, our differentiated joint venture model continues to drive material outperformance over peers. In retail, our customer satisfaction is excellent, our price position is strong, and we have tight control of our cost base."
The company further stated that it anticipates the slowdown in the pets market to be temporary. "We are confident that market growth will improve in future, supported by long-established and unchanged structural growth trends and a stable but higher pet population."
"As growth returns to historical long-term averages of four per cent (around three per cent for retail and five per cent for vets) in future we would expect to deliver revenue and profit growth in line with our medium-term ambition," it added.
