Pets at Home Share Price Dropped 8.79% on the CMA Investigation

The Pets at Home Group PLC (LON: PETS) share price dropped 8.79% after acknowledging the Competition and Markets Authority's (CMA) recent decision to potentially initiate a comprehensive review of the UK veterinary sector, identifying five critical areas for examination.

Despite expressing disappointment over the CMA's perceived lack of recognition for the unique aspects of their business model, Pets at Home has affirmed its commitment to fully engage in the consultation process set to conclude by April 11, 2024.

As highlighted in their November 2023 interim results, Pets at Home pointed out several key features of their operations: The company boasts approximately 450 veterinary practices under a unified national brand, which the CMA acknowledges.

Pets at Home's business structure allows independent practice owners to maintain complete clinical independence, set their pricing locally, and focus on delivering superior veterinary care. This autonomy has contributed to Pets at Home's reputation as the most trusted veterinary care brand among UK pet owners.

Since divesting its specialist referral division in 2021, Pets at Home has no involvement in other areas of the UK veterinary industry. Referrals made by their veterinary partners are based solely on the need to achieve the best possible clinical outcomes for pets, ensuring transparency for clients.

The company's expansion strategy enhances competition and consumer choice within the veterinary sector. By establishing new practices, Pets at Home aims to introduce additional capacity in underserved regions, while its advanced service offerings are poised to create alternatives to external hospitals. 

Additionally, plans are underway to extend 24-hour care to new areas. Pets at Home remains confident that this investigation will not hinder its growth strategy or aspirations, citing the strong performance and high-quality expansion of its business as evidence of its compelling offer to consumers.

Sarah Cardell, Chief Executive of the CMA, said: “We launched our review of the veterinary sector last September because this is a critical market for the UK's 16 million pet owners. The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue is high and why we were right to look into this. We have heard concerns from those working in the sector about the pressures they face, including acute staff shortages, and the impact this has on individual professionals. But our review has identified multiple concerns with the market that we think should be investigated further.”

Pets at Home share price. 

Pets at Home share price dropped 8.79% to trade at 252.10p from Monday’s closing price of 276.40p.