Pets at Home is under scrutiny as potential cost-saving measures are considered.
- CEO Lyssa McGowan discusses the challenges of upcoming tax rises.
- The company is facing an £18m increase in National Insurance and wage costs.
- Job cuts and price adjustments have not been ruled out as potential solutions.
- Other retailers, like HMV, show similar concerns over economic pressures.
Pets at Home, a significant player in the pet industry, is currently assessing its operational strategies in light of impending financial challenges. The company’s CEO, Lyssa McGowan, has indicated that while efforts will be made to mitigate costs, it is essential to evaluate the complete cost structure due to the upcoming changes in tax obligations.
The primary concern for Pets at Home revolves around an anticipated additional £18 million in annual expenses, attributed to increases in employers’ National Insurance Contributions and the National Living Wage. McGowan noted, “We will mitigate what we can. That’s not to say we can mitigate all £18m, and we will have to look across the full suite of levers, just like every other retail business, to see what we can do, and we’re in that process right now.”
Although the company has no immediate plans to reduce its workforce, McGowan has acknowledged that job cuts remain a possibility should circumstances demand. She expressed that the decision is not currently on the table but recognised the unpredictability in such economic climates.
The situation is not unique to Pets at Home. Doug Putman, the owner of HMV, has also expressed concerns over similar economic pressures. He revealed that HMV has paused store openings for the following year, highlighting potential job cuts as a likely outcome: “I would be surprised if we could find a way to get through this without cutting jobs.”
The financial challenges posed by increased costs are prompting Pets at Home and others to carefully consider their operational strategies.
