New tax fears as Pets At Home Group warns of ‘subdued’ market

A second major veterinary care provider has warned of significant cost implications arising from recent tax changes announced by the UK Government.

The Pets At Home Group says it is continuing to enjoy strong growth in its veterinary revenues, despite what it described as an “unusually subdued” pet retail market.

But in interim results released yesterday (27 November), the company also set out its expectations of the impact of national insurance and minimum wage increases announced in last month’s Government budget.

Cost increase

The document said: “Combined, these changes represent an £18 million cost increase for our business in [fiscal year 2026] FY26.

“We will continue to proactively mitigate these cost increases where possible, including through our ongoing productivity programmes and investments in automation.”

The comments came just a week after the CVS Group predicted it would face an extra £6 million in costs arising from the measures and follow calls from industry groups for businesses to plan now before the changes are implemented in April.

Subdued market

During the first half of the current financial year, the group’s veterinary operations recorded an 18.6% increase in revenues to almost £93 million.

Although overall group revenues were also up by 1.9% to £789.1 million, retail revenues were largely flat, increasing by only 0.1%.

Chief executive Lyssa McGowan said: “We are operating in an unusually subdued pet retail market, which we now expect to continue throughout [second half of year] H2.

“We are confident this will be temporary and growth will return to historical norms with the longer-term attractive outlook for the UK pet care market unchanged.”