Yappy shoppers: Why Pets at Home is booming

With something for every animal, Pets at Home is booming in a dog-eat-dog world – and has been snapped up by a high-street behemoth. Jonathan Brown on why it's the cat's pyjamas

Wandering up and down the endless aisles of Pets at Home proves a disarmingly soothing experience for a trip to an out-of-town mega- store. The sound of piped birdsong percolates the air upliftingly as you pass by the dizzying array of doggie chews, scratching-posts and poopa-scoopers.

This really is the place for the pet who has everything and for the indulgent owner with plenty of time – and money – on their hands. Looking for a boutique diamante bandana for that special pooch in your life? It's here. Perhaps your cat has sensitive skin? Why not try them on a scientifically formulated diet to soothe their aching fur? Your fish is bored in its tank? Then brighten up its world with a pineapple aquarium ornament (presumably guaranteed to entertain them afresh each time they swim through it).

But forget the pet shop of yesteryear – that dark, musty-smelling purveyor of dead parrots. This brilliantly lit cornucopia of cut-price creature comforts, home to hamsters from Syria, China and Russia not to mention motionless lizards and colourful birds, represents an extraordinary British retail phenomenon. It is a place where industrial-size bags of birdseed jostle for your attention alongside unmissable offers such as two leopard geckos for £60, or five lyretail guppies for a tenner.

Last week the Pets at Home chain store, with its 250 outlets, changed hands for the best part of £1bn. It has been dubbed the "B&Q of pet care", having aggressively rolled out from a single shop in Chester in 1991. After gobbling up its main rival, PetSmart, in 1999, its market position appears unassailable and profits have tripled since 2005. It is estimated that nearly one in three pet owners frequent its stores.

Little surprise then that private equity group KKR, whose other investments include Alliance Boots and Toys 'R' Us, was determined to fight off rivals to buy the chain – which delivered an eightfold return for its previous owners, Bridgepoint. The sale will further enrich the company's founder Anthony Preston, already said to be worth £175m before the deal, as well as the four senior managers who retain a 10 per cent stake.

Among them is chief executive Matt Davies, 38, now reported to be worth in excess of £35m. A committed pet lover – he brings his black Labrador Archie to work and has just bought a new puppy called Bear – he recoils in horror at comparisons suggesting the company is taking over the world à la Tesco. For this is capitalism with a wet nose and a wagging tail.

"Ninety-five per cent of people in the business own a pet," says Davies. "In Tesco you get great value and great range, yes, but you don't get the same level of customer focus. You try asking someone in the aisle of a supermarket what you should give your cat if it has a sensitive stomach. Customers are looking for value and they are looking for advice. Our guys in stores have great knowledge."

By paying and training more, the company has reduced staff turnover by 80 per cent in recent years and Davies is happier to be compared with the John Lewis Partnership than with the dreaded Tescopoly.

It is certainly true that those who work in Pets at Home are a cut above the average retail-park toiler, but Davies believes the success in bucking the recession – and the reason they will continue to roll out another 20 stores a year until they reach saturation point of 500 in the UK – can be found at a more philosophical level. "In the past couple of years when times have got tough people have increasingly been focusing on what is genuinely important in their life. A lot of stuff you spend money on – you don't really enjoy it. But that relationship you have with your pet is a very special one," says Davies. Special indeed – explaining why dog owners were prepared to fork out £1m over Christmas on new clothes for Fido.

Yet for every winner there is a loser, and the arrival of a Pets at Home superstore in a town can strike terror into the heart of a local independent shop owner. Michelle Prentice took over the running of Peejay Pets from her father, and has three shops in Yorkshire and Humberside. In York she is now competing against two Pets at Home outlets after the giant opened its second store in the city in November, very close by. "It has affected us quite a lot, but I don't know how it will be in the long term. It is in the same car park as Morrisons and Homebase, so it is quite a big thing for customers to have to get back in the car and drive across the road to us," she says. Yet she believes they can compete: "We tend to know our customers by their names, and to know their pets' names too. They really like that."

Janet Nunn, chief executive of the charity Pet Care Trust, believes there is "easily enough" room for everyone in the £3bn-a-year market place, with pet ownership in the UK, at 43 per cent of households, still trailing that in the US, where nearly six out of ten homes contain an animal. She believes things are changing for the better. "It is 39 years since the dead parrot sketch, and maybe that changed the way things were done," she says. It's right that our moral compass has changed and that we continue to improve."