GREENCROSS: WE DON'T FEAR AMAZON

Written on the 25 October 2017 by Ben Hall

GREENCROSS: WE DON'T FEAR AMAZON

VETERINARY services provider and pet care retailer Greencross (ASX: GXL) says it is prepared for the pending arrival of Amazon because it has a unique business model which differentiates it from the online retail behemoth.

At the company's AGM, Greencross chairman Stuart James says the Brisbane-based company is well placed and ready for Amazon's arrival as the largest employer of vets in Australasia with more than 650 of them.

"A lot has been made recently of the potential impact of Amazon on the Australian retail landscape," James says.

"In response to this discussion, it is worth pointing out that our business has many unique features which differentiate us from both online and bricks-and-mortar competitors."

"In a world where pet consumers are increasingly seeking professional advice on medical and nutritional issues for their pets, our unparalleled veterinary expertise is an asset which sets us apart from others.

"We truly provide a one-stop shop for pet owners with veterinary services, grooming salons, dog wash, pet insurance, pet hotel booking, dog walking and sitting and obedience training all conveniently available in a single location."

In the 2017 financial year, Greencross achieved top line growth of more than 10 per cent across its three business divisions, with-like-for like sales up by 4.5 per cent and its network expanded to 420 locations in Australia and New Zealand.

"In a downbeat consumer environment, the business delivered solid revenue and earnings growth," James says.

James also points to the company's 'large and loyal' customer base, with more than 87 per cent of the group's sales made on the group loyalty card, which provides the company with invaluable data on pet owners' shopping habits.

Greencross is also expanding its own online business, which grew by 55 per cent in 2017 and its click-and-collect system, where customers order online and pick up the goods in-store had grown to over 40 per cent of online transactions since it launched in February.

CEO Martin Nicholas told the AGM that so far this financial year, Greencross is trading in line with management expectations.

Group total sales are up by 8.5 per cent and group like-for-like sales are 4.4 per cent higher. Retail like-for-like sales have risen by 4.1 per cent, and Australian veterinary like-for-like sales are up 5.4 per cent.

Greencross says it expects to add 15 stores and 20 in-store clinics to its network in the 2018 financial year.

At around 2.30pm (AEDT) GXL shares were 2 per cent higher at $5.70.

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Business News Australia

 
Author: Ben Hall

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