Pets at Home warns over renewed stockpiling if no-deal Brexit threat remains
Pets at Home has revealed it would consider further stockpiling of pet food and products ahead of the new October Brexit deadline if a disruptive no deal remains on the cards.
Speaking to the Press Association, chief executive Peter Pritchard said the group had already run down the £4 million of extra stocks built up in advance of the original March 29 Brexit deadline.
But he said the group would look to rekindle stockbuilding efforts if the prospect of a no-deal Brexit risks disruption to its product supply in the autumn.
He said: “We will always protect customer availability. Our focus is on making sure our customers can buy the things they want.”
The news comes as businesses face more Brexit uncertainty, with little sign of a deal on the horizon.
Stockbuilding in the first quarter of 2019 helped push UK economic growth up to 0.5%, but firms are expected to wind their inventories down over the second quarter.
Pets at Home has previously warned that 17% of its goods come from outside the UK, and its stock supply could be disrupted in the event of delays at ports and borders under a no-deal Brexit.
But Mr Pritchard said that as a pet retailer, it has been shielded from some of the Brexit uncertainties hitting other retailers and businesses.
“Pets are part of the family and we can see even through these challenging times that people continue to spend on their pet,” he said.
His comments came after the group cheered investors last week with better-than-expected annual underlying profits, despite a bottom line hit from its vet chain restructuring.
The group’s share surged on Wednesday after it posted a 6.1% rise in underlying pre-tax profits to £89.7 million for the year to March 28.
It said retail like-for-like sales rose 5.1% in the year, with group-wide comparable store sales up 5.7%.
Fourth quarter retail comparable store sales lifted 6.5%, helping it notch up its ninth quarter in a row of like-for-like growth.
But the group’s statutory pre-tax profits slumped 37.7% to £49.6 million after it took a £40.1 million hit on its overhaul of the group’s chain of veterinary practices after rapid expansion in recent years.
It bought out 48 of its 55 joint venture vet practices from the 471-strong Vet Group chain, of which 19 have closed.
Mr Pritchard said the group is expecting to close around 35 of these stores in total.