Published: November 14, 2024
Unity Trust Bank is proud to be exhibiting at this week’s London Vet Show 2024, Europe’s largest veterinary conference and exhibition, which brings together industry professionals for two days of learning, networking and innovation.
Here, Martin Leake, Relationship Manager at Unity, and Paul Kelly, Deputy Regional Director, consider the current challenges and opportunities for the sector, and how Unity can support practices with their evolving business needs.
Martin Leake said: “I started my banking career over 40 years ago and I have been specifically supporting the veterinary sector for the past 25 years. It’s a sector I’m deeply passionate about, and it’s fascinating to see how the industry has evolved over the last quarter-century.
“Today, it’s clear that business is booming. According to a recent report, in the five year period of 2020-25, veterinary services revenue is projected to grow at an annual rate of 2.4% to £6.1billion.[1] This is fuelled by a nation of pet lovers, in which 17.2million households (60%) house one of the UK’s 36million pets.[2]
“From independent start-ups to established company expansions, I have provided banking advice and support to veterinary businesses of every size. In my view, there’s one common thread that unites them all and it’s this that has encouraged my long-term interest and involvement in the sector.
“In my experience, the sector is populated by industry professionals who have a deep and genuine passion for their work. They are motivated by doing their best for the animals in their care and, in turn, their valued customers.
“For millions of people across the UK, pets are a treasured member of the family – a much-loved companion and friend – and their health and well-being is paramount. Research has shown that, despite the impact of the cost-of-living crisis, pet owners consider veterinary spending on their pets as a necessity, which is unaffected by changes to disposable income.[3]
“While this offers a sense of stability for veterinary practices, there are a number of key issues facing the sector which continue to impact their profitability.
“It’s evident that Brexit had an adverse effect on the sector, with more than 1,000 vets (4% of the total workforce) leaving the industry, resulting in pressing skills gaps and staff shortages. Today, the challenge of attracting and retaining skilled workers is compounded by more stringent immigration policies post-Brexit, which are limiting work opportunities for EU veterinary surgeons and nurses.
“The sector was also impacted by the Covid-19 pandemic, which encouraged a huge spike in pet ownership as people looked to ease the loneliness and uncertainty of ongoing lockdowns. According to figures released in 2021, a total of 3.2million UK households had acquired a pet since the start of the pandemic.[4]
“This sudden spike in demand had several repercussions for the wider sector. Sadly, it’s known that many pets purchased during the pandemic were later abandoned, as the cost and responsibility of pet ownership became a reality.
“In such cases, animal charities such as the RSPCA or Blue Cross will take abandoned pets to veterinary practices while attempts are made to re-home them. Most often, vets will care for these animals at a reduced hourly rate, and will charge for any necessary treatment or medicine at cost – resulting in losses for the practice which can contribute to longer-term impacts on the bottom line.
“For those pets purchased during the pandemic who remain happily with their owners, they are now ageing and may soon become in need of regular veterinary care. This puts additional demand on an already strained and depleted workforce. As a result, we’re seeing increased costs for veterinary care, as practices are forced to pass on higher charges to their customers.
“The escalating cost of veterinary care is currently being investigated by the Competition and Markets Authority (CMA), with its findings due to be published in November 2025. Higher costs are not only due to the impact of Brexit and Covid-19, but are also a result of reduced competition caused by mass consolidation in the industry.
“Ten years ago, 80% of veterinary practices were independent. Today, only 40% are, with the majority being taken over by larger corporates. This lack of competition in the market does not serve the sector well and we await the outcome of the CMA’s investigation.
“However, the rise of larger corporates has, arguably, only further highlighted the importance of independent veterinary businesses. These practices place huge value on maintaining a loyal client base, which can only be achieved through the delivery of exceptional service and a deep understanding of the needs of its customers – both animal and human.”
Paul Kelly said: “All veterinary practices play a crucial role in the community and the sector’s values closely align with those of Unity. As an ethical bank, we’re committed to supporting and lending to organisations that make a positive contribution to communities across the UK, and the veterinary sector is a prime example of an industry that balances profit with purpose.
“This commonality in ethos means that we have a deep understanding of the unique requirements of the sector and the financial support we can provide to help veterinary practices thrive. This is in line with Unity’s relationship-led banking model, which is designed to provide tailored and transparent banking support to customers across a range of sectors.
“Our Relationship Managers have expertise in this field and we’re proud to support Unity’s veterinary customers who are looking to invest in growth. Although challenges remain, I know that the sector remains resilient and committed to its core purpose – providing exceptional care for animals and their owners – which, in turn, plays a vital part in delivering true community impact.”
The London Vet Show 2024 takes place at Excel London on 14-15 November. Unity Trust Bank is exhibiting at stand S52.
[1] Source: IBISWorld Industry Report – Veterinary Services in the UK, September 2024
[2] https://www.ukpetfood.org/resource/paw-some-new-pet-population-data-released-by-uk-pet-food.html
[3] Source: IBISWorld Industry Report – Veterinary Services in the UK, September 2024
[4] https://www.bbc.com/news/business-56362987
