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Pets at Home has posted a like for like sales uplift of 6% in its third quarter on strong store and online retail growth.

Total group revenue up 7.1% to £404.7m in the 16 weeks to 21 July, with Group like-for-like revenue up 6.0% on broad-based growth.

Retail revenue increased by 6.6%, and up 5.6% on a like for like basis.

The group said that all channels remain in growth, with organic store growth of 4.3% and online up 13.5%. Omnichannel participation of retail revenue was 16.7% in the quarter, compared to 15.8% in its last financial year.

The Vet Group part of its business saw revenue increased by 11.2%, with organic revenues revenue up 8.6%.

Pest at Home said it saw continued growth in new customers and strong retention of the 1.1m customers acquired last year.

Sign ups to its ‘Puppy and kitten club’ continued at pace, averaging 25,000 per week, three-fold higher than pre-pandemic, and creating a 12-15 year growth opportunity over the full pet lifetime.

The number of active VIPs increased 10.7% year-on-year to a record 7.4m.

The group said it had seen “good” sales to profit conversion as it continues to proactively manage inflationary cost pressures through a planned series of productivity and efficiency initiatives.

Therefore it has made no change to its sales and margin outlook. It continues to expect full-year group underlying pre-tax profit to be in line with analyst consensus, which is currently £131m, with a range of £127m-£136m.

CEO Lyssa McGowan commented: Our performance has remained strong in the first quarter, underpinned by continued customer growth and high levels of retention. We operate a unique omnichannel model, in a market in structural growth, where the passion and expertise of our colleagues and partners is a key competitive advantage.

“I would like to thank them for their warm welcome, their continued efforts in helping our record number of customers care for their pets in these challenging times, and their ongoing commitment to building the best pet care business in the world.”

Morning update

Retail footfall has been stifled by the warm summer the UK is experiencing, according to the latest BRC-Sensormatic IQ data footfall data.

In the four weeks to 30 July, total UK footfall decreased by 14.2% in July (compared to pre-pandemic 2019), 3.7 percentage points worse than June and worse than the 3-month average decline of 12.3%.

Footfall on High Streets declined by 15.9% in July, 2 percentage points worse than last month’s rate worse than the 3-month average decline of 14.4%.

Retail parks saw footfall decrease by 9.1%, while shopping centre footfall declined by 24.8%.

Northern Ireland saw the shallowest footfall decline of all nations at -12.3%, followed by England at -14.0% and Wales at -15.8%. Scotland again saw the steepest decline at -16.5%.

BRC CEO Helen Dickinson commented: “Following four months of steady progress, UK footfall stalled in July as record temperatures and the rising cost-of-living deterred people from visiting local shops.

“There was some respite in the last week of July, ahead of the Women’s Euros finals, as people stocked up on food and drink to watch the Lionesses bring footfall home. Meanwhile, footfall in Northern Ireland bucked the UK trend and improved slightly on the previous month.

“A new Prime Minister offers a renewed opportunity for the Conservative Party to meet its 2019 pledge for fundamental reform of the broken Business Rates system. The first step is scrapping the ‘downwards phasing’ part of Transitional Relief – a flawed system that prevent retailers paying what they owe, and instead would force them to overpay more than £1 billion between 2023 and 2026. This money could be better used to help limit price rises for customers, curb the rising cost-of-living and invest in the vitality of towns and cities around the country.”

Andy Sumpter, Retail Consultant EMEA for Sensormatic Solutions, added: “July delivered a smorgasbord of summer disruption for retailers, as the ongoing rail strikes derailed footfall gains and the UK’s record-breaking heatwave saw shoppers shun the shops for several days as the temperatures soared.

“Add to this the ongoing cautiousness we’re seeing among the cost-of-living consumer, it made for a bumpy month for shopper traffic performance. And amidst the tailwinds of economic uncertainty, comes possible policy changes as the Tory leadership contest plays out; retailers will be listening closely to how the next Tory leader plans to help the High Street, whilst hoping shoppers vote with their feet in August.”

Elsewhere, agriculture and engineering group Carr’s has said its performance remains in line with expectations during the 22 weeks to 30 July.

In Speciality Agriculture, whilst raw material costs continued to rise significantly, sales margins were notably improved in all markets as price rises have been passed onto customers.

Volumes in the UK and Ireland remained solid, supported by strong farmgate prices. However, USA volumes continued to be impacted adversely by a reduction in beef cattle herd size due to drought causing a shortage of grazing.

UK agricultural supplies “traded well” during the period, with continued high activity levels in retail and machinery and with the market absorbing the impact of cost inflation in fuels and feeds. Since the spring, dairy feed volumes have held up but there has been a reduction in volumes of beef and sheep feeds as customers limit expenditure on inputs.

In January, the board announced a review of the strategic options for each of its three divisions – that review is nearing completion and the board expects to make a separate announcement shortly.

Meanwhile, it has appointed Peter Page to the role of Chief Executive Officer, moving from his current role as chairman, which he has held since January 2020.

From 2007 until 2018, Page was CEO of Devro and previously served he was head of Europe for poultry breeding company Aviagen Group and an executive director of Adnams.

Page will remain executive chairman until a new non-executive chairperson is appointed.

Additionally, Neil Austin, who has been with Carr’s as CFO for 9 years, has informed the Board of his intention to stand down in January 2023 to take up a new role as CFO of the Westmorland Family, headquartered in Cumbria.

Page commented: “I am excited to have the opportunity to lead Carr’s Group as we finalise and implement our long-term strategy. I have developed a good understanding of the Group, its businesses and people, and I look forward to leading the next phase of growth.

On the markets this morning, the FTSE 100 has edged down 0.1% to 7,444pts.

Risers include Hilton Food Group, up 2.4% to 1,067.1p, Cranswick, up 2% to 3,375.1p and Deliveroo, up 1.8% to 97.9p.

Fallers include Naked Wines, down 4.2% to 148.5p, Bakkavor, down 2.9% to 91.2p and Haleon, down 1.3% to 301.2p. 

Yesterday in the City

The FTSE 100 closed flat yesterday at 7,448.1pts.

Coca-Cola Europacifc Partners fell back 3.2% to €51.50 yesterday on its third quarter results, despite upgrading its sales and profits expectations on strong sales growth.

Other fallers included Delieveroo, down 4.3% to 96.2p, Just Eat Takeaway.com, down 4.2% to 1,591.6p, British American Tobacco, down 1.8% to 3,219.5p, Domino’s Pizza Group, down 1.3% to 276.4p and Kerry Group, down 1.2% to €103.62.

The day’s risers included Naked Wines, up 5.5% to 155p, Nichols, up 4.3% to 1,140p, Virgin Wines, up 3.5% to 75p, Ocado, up 3.1% to 940p, Cranswick, up 1.8% to 3,308p, WH Smith, up 1.5% to 1,468p, Marks & Spencer, up 1.5% to 139.3p and Associated British Foods, up 1.1% to 1,675p.

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