Pets at Home said full-year profits took a hit after it cut prices to tackle rising competition, and signalled more price cuts were to come this year.
Pre-tax profits at the UK’s biggest pets retailer fell 12.3 per cent to £84.5million in the year to the end of March.
The news sent shares in the company fall as much as 8.7 per cent to 143p.
Profit fall: Pets at Home said it expected more price cuts as competition intensifies
Pets at Home, which also has a veterinary business and offers grooming services, said margins fell to 51.7 per cent from 54.2 per cent a year earlier due to investments to lower prices.
It now expects a further drop of 75 to 125 basis points this year and ‘single-digit’ profit growth.
Pets at Home, which has 448 stores and 461 veterinary practices across the UK, said it would open 10 to 20 grooming salons and 20 to 25 vet practices during the year.
Chief executive Peter Pritchard said there would be ‘some further price investments’ as he referred to the company’s efforts to stay competitive.
It comes as last week German rival Zooplus said it was expanding its UK fulfilment centre area by three times to improve deliveries.
Pritchard added: ‘We know from history that when times are tough people are likely to cut back on a sofa, car, or holiday, but the pet market tends to fare pretty well through recessionary and tough times.’