Pets at Home Ltd is the largest pet supplies retailer in the UK by a significant margin, employing over 5,000 staff and operating 325 stores nationwide. When it was sold to a US investment firm in 2010, it was valued at just under £1bn.
The company continues to grow at a rapid rate, with on average 25 new stores added to its roster each year and sales consistently increasing year-on-year. Although the company’s main Support Office is in Wilmslow, Cheshire, the hub of the Pets at Home operation is its 160,000 sq metre warehouse in Stoke, which supplies the vast majority of the company’s nationwide network of stores.
In June 2011, this was supplemented with a second warehouse near Northampton. A similar size to the Stoke site, its creation is a clear indication that the business is only going in one direction.
The Pets at Home challenge
For a specialist retailer like Pets at Home, the ready availability of products is the lifeblood of the business. As a result, logistics plays a business-critical role. With demand for products in constant flux, the logistics function must be able to adapt to ensure that retail stores are neither overstocked nor undersupplied.
This is easier said than done. New product lines are launched regularly – sometimes rolling out across all UK stores, sometimes in certain regions – and Pets at Home cannot accurately predict consumer demand until initial sales figures become available. Demand for existing product lines also changes constantly, and any new stores need to ‘feel their way’ in determining what will sell well in their catchment area before product distribution can adjust accordingly.
Pets at Home’s logistics function must therefore be in complete harmony with the rest of the business, with distribution activities closely aligned to sales in order to manage the fluctuations of demand.
For EV Cargo, as Pets at Home’s main logistics contractor, this has meant immersing itself in the business and adopting a truly responsive approach to the partnership.
EV Cargo has a long history in the pet retail industry, working with the sector for over 20 years. Having worked with a local pet food manufacturer in Gloucestershire, EV Cargo was making the early deliveries to the first specialist out-of-town pet provider, Pet City, when it opened its flagship store at Swindon in 1990. Pet City quickly began to grow during the early ‘90s, building up to a chain of ninety stores. EV Cargo carried out all of the deliveries in the UK, delivering to retail stores with scheduled deliveries and via tail lifts and pump trucks.
After Pet City was sold to Pet Smart in 1996, the business grew very rapidly as the out-of-town retail model took off in the UK – and within three years, EV Cargo was delivering to 150 stores. Pets at Home purchased the group in 1999, becoming the largest UK pet supplies retailer. When it opened its new distribution centre at Stoke-on-Trent in 2003, EV Cargo became the lead UK logistics partner for the business. This involved an on-site management team and a core fleet of liveried vehicles, undertaking up to 100 loads per day to retail stores as well as collections from suppliers.
EV Cargo has worked jointly with Pets at Home over many years to drive improvements across the logistics operation. A quick win in the early days of the new distribution centre was the switch from single to double-deck trailers together with Moffett mounted forklifts, fitted to the rear of the trailers. This improved payload efficiency by 50 percent and, more importantly, negated the need for Pets at Home to have mechanical handling equipment (MHE) at all of its stores, along with the necessary training of store-based employees to handle MHE. Pets at Home cancelled contract hire agreements on over 250 forklifts overnight as a result, saving more than half a million pounds a year on MHE hire costs and training.
Other initiatives included the introduction of aerodynamic trailers – the reduced fuel requirements of which have saved costs of around 14 percent. EV Cargo has also undertaken a strong driver training programme on Pets at Home’s behalf, with the emphasis on ensuring safe and fuel efficient driving across the distribution operation. Phil Hackney, Supply Chain Director at Pets at Home, explains why EV Cargo was chosen as UK logistics partner:
“From the start of the relationship, EV Cargo has been ready to respond to changes in requirements and alter their approach accordingly. No matter what happens, or how much our operation grows and changes, we know that EV Cargo will do whatever they can to make it work”.
Focus on the customer
Pets at Home reviews delivery requirements on a fortnightly basis, making sure that planned deliveries align with predicted peaks and troughs in demand. Very little buffer stock is held at the stores themselves – most products go straight on sale as soon as they arrive – so it is vital that EV Cargo is able to tailor deliveries quickly and accurately.
Phil Hackney notes that at many large national retailers, store workers are not only expected to deal with customers; they are relied upon to unload deliveries, replenish products on shelves, manage stock – all of which shift focus away from the core task of helping customers to make a purchase.
At Pets at Home, however, the entire business is geared towards making the shopping experience an enjoyable one for customers, with a member of staff always on hand and willing to help. To ensure that colleagues have the time to dedicate to serving customers, Pets at Home and EV Cargo worked together to implement night-time deliveries for the entire network of retail stores. Under the new schedule, EV Cargo’s drivers deliver overnight between 6pm and 4am the following day.
Instead of depositing the products on site, drivers unload the products using Moffett forklifts and deliver them directly to the relevant department in the store. This means that from 7.30am when workers arrive until the store opens, staff can focus on replenishing the stock on shelves ahead of the day’s trading, instead of managing and handling the delivery. Phil explains:
“This change has really taken the pressure out of the first hour and a half of the day. By the time the store opens, usually at around 9am, our colleagues on the shop floor are ready to serve customers and can put their efforts into providing good service. By avoiding deliveries during times of heavy congestion, we also now enjoy 99.4 percent on time deliveries.”
With the switch to out of hours deliveries and the continued growth of Pets at Home, EV Cargo’s depot infrastructure also helped to create a ‘hub and spoke’ model for the retailer. The EV Cargo Pets at Home dedicated core fleet concentrates on optimum deliveries (typically within a 70 mile radius of the distribution centres), but also trunk loads to EV Cargo’s depot network at Dunstable, Gloucester and Leeds – from which deliveries on to more remote regions are undertaken.
Why EV Cargo?
According to Phil Hackney, EV Cargo has proved that it is a business with the flexibility and scalability to cope with the demands of a growing and constantly changing business:
“Everything is fluid when it comes to our distribution requirements – we’ve got some stores needing two deliveries a week, some needing seven. We’ve got new stores opening all over the country at different times throughout the year, and our sales fluctuate on an almost daily basis.
“EV Cargo has the capacity to manage our significant UK requirements and the experience and ingenuity to be able to solve problems, responding to any challenges that may occur.”
It is the willingness to go the extra mile to support Pets at Home’s goals as a business that sets EV Cargo apart. Phil concludes:
“This company has built its reputation on the excellence of its customer service as much as its product range, and our supply chain needs to support this. EV Cargo has gone above and beyond to ensure that we have a delivery schedule that works for our colleagues and the wider business. Their willingness to operate a flexible delivery operation means our colleagues are free to do what they do best – serving our customers”.
From the start of the relationship, EV Cargo has been ready to respond to changes in requirements and alter their approach accordingly. No matter what happens, or how much our operation grows and changes, we know that EV Cargo will do whatever they can to make it work.” – Phil Hackney, Supply Chain Director, Pets at Home.