Chief executive Davies cautious despite 10% increase in both sales and EBITDA in year to March.
Specialist retailer Pets at Home has beaten torrid trading conditions to post a surge in earnings.
Consumers’ reluctance to skimp on their pets helped the retailer achieve a 10.3% rise in EBITDA to £93m last year.
Like-for-likes increased 1.8% in the 53 weeks to March 31, when group revenue advanced 10.7% to £517.8m.
Pets at Home chief executive Matt Davies told Retail Week: “It’s been another year of strong growth despite the retail environment being incredibly challenging.” Trading since year end has been “in line with expectations”, he said.
Davies said that while Pets at Home is not recession proof, it is in a more resilient sector than others.
“People love their pets,” he said. “They have a very high position in the household. Before pets do without, people do without.”
However, he remained cautious about the outlook. “It’s difficult to see what will improve people’s sentiment and to see where good news is going to come from,” he said.
The 287-store retailer, which was sold to private equity giant KKR last year for £955m, will step up expansion, opening 35 stores this year compared with 25 last.
“This year will be the biggest for store openings,” said Davies. “There is a huge amount of people not being served by Pets at Home stores.”
Pets at Home opened three new ‘local stores’ in the year, which take up 5,000 sq ft on local retail parks compared with the traditional 7,500 sq ft superstore format.
The retailer will open a further 10 this year. “It’s more convenient for everyday stuff,” said Davies. “We’re confident we have different formats to serve the UK.”
Davies said he has noticed a change in shopping behaviour as customers prove less willing to trade up. As a result, Pets at Home is devoting less space in-store to its most expensive products.
To appeal to the more cash-strapped consumer, Pets at Homes has invested in lowering prices and increasing promotions.
To offset the cost, the retailer is sourcing more efficiently and has a “tight control of costs”.
Pets at Home is increasing its investment in people. “That’s our point of difference,” Davies said.
Davies said best-sellers over the year were goldfish and reptiles, sales of which were up 253% in the period.
He added there are more reptiles - which are low maintenance animals - than dogs as pets in the UK; 8 million and 6.5 million respectively.