Pets At Home’s retail business suffered over the Christmas months as it warned of worsening consumer confidence.
The pet product giant, which has hundreds of stores across the UK, said it saw a “more challenging UK consumer backdrop with particularly weak footfall from October”.
The wider retail sector has taken a hit in recent months, as gloomy predictions about the economy have made people less willing to spend.
Meanwhile, Labour’s decision to increase companies’ national insurance contributions, a tax paid per employee, is set to hurt the industry harder than most because of its reliance on lower paid workers such as shop-floor staff.
Pets At Home said it had seen “a softer performance” in its retail business over the three months to January 2.
Revenue across the business fell 0.2% compared with the previous year, although the company said its veterinary arm grew by nearly one-fifth, with more people signing up to its subscription service.
It comes after Pets At Home warned last year that the slowdown of a pandemic boom in pet ownership would hit its profit.
Britons flocked to buy dogs and cats during Covid-19 lockdowns, but the trend has stabilised this year.
Lyssa McGown, the company’s chief executive, said in late 2024 that the company averaged 15,000 puppy and kitten sign-ups per week at the time, down from about 24,000 in 2023.
Adam Vettese, an analyst at investment firm eToro, said: “It’s fair to say it isn’t the easiest time to be a UK retailer, with potentially huge employment cost increases looming, and Pets at Home is no exception.
“Adding to this, with consumer confidence being particularly low due to households feeling the pinch themselves, they are far less likely to add a furry friend to the family or may hesitate to upgrade accessories for the ones they do have already.”
This article was written by PA Business Reporter and Alex Daniel from Press Association and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.