Bright future for sector despite CMA expected changes

The economic outlook for the UK veterinary sector remains “positive”, even with the challenges posed by an ongoing investigation of its services, according to property industry experts.

Analysis by the consultancy firm Rapleys has argued there is still significant potential despite the prospect of change arising from the Competition and Markets Authority (CMA) process.

The conclusion came after a separate report predicted global veterinary care spending was likely to exceed US$100 billion (£77 billion) by the start of the next decade, within a half-trillion-dollar global pet economy.

‘Alternative’

The veterinary professions are among 17 areas within the “alternative” property market to have been assessed in the first report of its kind from the company.

Its analysis found that, as of 2022, 2,472 properties were either leased or owned by veterinary businesses in the UK – an increase of nearly 10% over the preceding decade.

It also acknowledged the potential for “regulatory changes” arising from the CMA process and said business amalgamations and a trend of investing in fewer, larger sites were likely to have contributed to a more recent net decrease in vets.

But with the sector’s GDP reported to have grown by 42.5% above pre-COVID levels, the company’s building consultancy partner, Simon Harbour, said there remained “significant opportunities”.

‘Tranformative growth’

He wrote: “The sector has undergone transformative growth, fuelled by increased pet ownership and advancing capabilities. However, this rapidly evolving industry now faces emerging challenges around changing demand, consolidation, regulation, staffing and affordability.

“Though risks remain, the overall outlook is positive for this essential sector and associated properties.”

The document also argued that the move towards opening practices in town centres was “a helpful boost for struggling high streets” and strategic investments would be critical to continued growth regardless of future pet ownership trends.

The Rapleys analysis followed an earlier report by Bloomberg Intelligence (BI), which forecasts that the global pet economy’s total market size will grow by more than 45% to nearly US$501 billion (£388 billion) by 2030.

Predictions

Although officials stressed they were unable to comment on the potential impact of the CMA process, the analysis predicted that the size of the global veterinary care market would grow from slightly more than US$74 billion (£57 billion) this year to around US$105 billion (£81 billion) in 2030.

It further projected that the global pharmaceuticals market would grow from just below US$61 billion (£47 billion) this year to US$87.3 billion (£67.6 billion) by 2030, with diagnostics rising from US$25 billion (£19 billion) to nearly US$36 billion (£28 billion) over the same period.

The company argued that a “thriving” diagnostics market had boosted practices revenues even with a fall in practice visits following the COVID-19 pandemic.

Rise in visits

While the paper indicated that visits may start to rise again next year, at least in the US, Andrew Galler, BI’s lead analyst for global health care, said: “Innovations in pet health care are pivotal to the market’s expansion.

“The development of new therapies and advanced diagnostic tools will not only enhance the quality of care, but also drive significant economic value.

“As pets live longer, the demand for sophisticated health care solutions will continue to rise.”

Although the report predicted rapid growth in China, the analysis still estimates that more than 70% of the global market will be concentrated in the US and Europe.

However, it suggested there were particular opportunities for diagnostic growth in Europe, with only 8% of the addressable market estimated at around US$14 billion (£11 billion) being reached.