Fort Dodge has released figures today which point to a continued modest slowdown in the UK veterinary sector, being mitigated by a slight increase in average transaction value (the amount a client spends in a year).

Matthew Rowe, Companion Animal Marketing Manager at Fort Dodge, said:  "It's been clear for some time that the veterinary sector is being hit by static growth and an increasingly competitive environment.  The reduction in turnover being experienced by many practices is primarily down to current clients visiting less often and fewer new clients being attracted."

Key findings of the Fort Dodge Index for the first quarter of 2009 are:

• Turnover growth (derived from professional fees and drug sales) has decreased to 0.7% from 1.1% in March 2008 which, according to FDI analyst Alan Robinson, looks less optimistic for practices looking to achieve a 6-7% annual growth rate to maintain growth above inflation.
• Turnover per vet is up 1% partly due a slight reduction in overall vet numbers. The data shows that professional fees and vet generated turnover is up by 0.8% and 2.5% respectively, reflecting increased surgical consultations but slightly reduced surgical procedures. Nurse turnover is up by 1.7%.
• Transaction volume growth (derived from active client and patient numbers and their frequency of visits to the practice) has decreased to -0.7% from -0.3% last year. The reduction in client numbers is due mainly to reduced numbers of new clients (-3%) compared with -1.1% this time last year. On a more positive note, client retention at +2.5% helps to counteract this. It compares with a figure of 0.9% last year.
• Total client growth reduced by -0.5% this quarter and, when it comes to numbers of clients being lost by practices, Alan Robinson says it's clear that 'bonded' clients (those with vaccinated animals) are more easily retained with only -0.2% being lost. For non-bonded clients, the loss rate is higher at -0.7%.
• The contribution of nurse consultations to practice turnover has increased slightly. They now make up 6.7% of practice turnover, up 1.1% on March 2008
• Average transaction value has shown a 10.7% increase from £35.97 in March 2008 to £39.83 per visit in this quarter. Transaction value is generated by the prices charged for products and services and the number of products and services sold per transaction.

Alan Robinson said:  "In the current climate, the only contributor to turnover growth in many practices seems to be a steady rise in the price of professional fees, consultations and surgery.  These have continued to push up average transaction values (by 1.4%) and client values (1.2%) in this first quarter of 2009 despite reducing visit frequency.  Drug related income increases seem to be driven by a small increase of POM mark-ups in many practices.

"But this alone will not sustain a successful business and, with transaction volumes still falling, the priority for practices is to maintain client footfall despite increasing competition and falling pet ownership.  In today's market, retaining clients is a cheaper and more effective way to maintain client and patient numbers so an emphasis on 'bonding' clients though preventative health care and heath maintenance programmes is key.

"We're seeing a steady increase in the number of practices running these programmes but the percentage of pets involved is still woefully low so the message is that practices can and must do better.

PS: Whilst you're here, take a moment to see our latest job opportunities for vets.