Interview: Jollyes CEO Joe Wykes on expansion, competition and staff happiness

Jollyes chief executive Joe Wykes speaks to Retail Week about the brand’s ambitious bricks-and-mortar expansion plans, how it is stealing share from the competition and why omnichannel is not always the cat’s pyjamas. 

Jollyes has been expanding, give us an idea of how big the business is now

“We’ve just gone over £100m in revenue in the last 12 months. Our 86th store will open at the end of February and we think when we open our Christchurch store around Easter we’ll bust the 1,000-employee mark – which will be a real milestone for the business.

“We’re running at roughly 6 million transactions a year across the Jollyes business and of that about 60,000 are online, so 1,000 transactions per week is a rough and tough number for online.”

Is the expansion set to continue? 

“In March last year, we started to ramp up and hire people internally. We’d seen the pre-to-post-pandemic boom in dog and cat ownership. Around 40% of households had a pet before the pandemic and now that number is more like 62%.

“As we began to sharpen up our retail basics – our buying, merchandising, supply chain, availability and in-store training, we started to see our core like-for-likes improving. We sat down as a team and said: ‘Let’s start opening some physical stores.’

“We have a very supportive shareholder and a very supportive bank and so we’ve been opening one a month since last March. We’ve also bought a few businesses in the meantime. For this calendar year, we have 10 stores lined up so we only have two months where we have holes and I’m hoping to fill them.”

Who are your competitors?

“We see ourselves as a clear, but also emerging and challenging, number-two brand to Pets at Home. There is another player called Pets Corner that has 130 stores but these stores are broadly concession-based and much smaller on a square-footage basis. Our stores are roughly 6,000 sq ft.

“We’re growing at 30% year on year. It’s a wonderful story that obviously has had a Covid boost in the background but now I think we’ve got the right team in place and our value messaging is really piercing through with customers. We are definitely taking market share, the market is not growing by 30%.”

What is your approach to omnichannel?

“A very small percentage of our business is pure ecommerce. The economics of delivering pet food to people’s homes is really awful. Moving a heavy product with a relatively low transaction value – the only winner in that is the final-mile delivery courier.

“Our typical customer shops 14 times a year with us but only one of those is online. That could just be because the customer can’t get out and about, so we make it as easy as possible for that one transaction a year to happen online.

“But our store teams are trained to welcome the pet before they welcome the human. All stores have got feeding stations outside and inside, with water bowls and nibbles, and we are actively encouraging our customers to shop in-store with us and to bring their pets with them.

“Although our omnichannel play has helped – we have a lot of products and store information online – what we are deliberately trying to do is drive people into stores and encourage a dog-friendly environment when they get there.”

What are the toughest macroeconomic factors impacting the business?

“First is electricity costs. Our stores are very well-lit and we’ve just bought all of our electricity out to May. We forward-bought at higher rates than we would like to have done, but we thought: ‘Let’s protect ourselves against any downside risk.’ We are looking very closely at buying electricity out for the remainder of the calendar year. 

“Second, business rates. Because we are retail park-centric, we feel underlying rents are going up and we’re a bit nervous about that double whammy. 

“Then the national minimum wage affects roughly 65% of all of our staff. And, finally, like any business that’s owned by private equity, high interest rates do us no favours whatsoever.”

Have you had to increase prices?

“We’ve tried to be as acute as possible. We’ve moved them on branded and we’ve held them on our own brand as much as we can.”

Have you felt the impact of the labour shortage? How do you keep staff happy?

“We’ve been really lucky. Jollyes is the first business I’ve ever worked for where the people who work for us, it’s their hobby first and their income second. We create an environment where we’re very flexible on hours, shops are local so people don’t drive very far to us, and we have a nice environment.

“We have a number of people who have worked for the business for more than 25 years and almost 100% of the people who work with us shop with us. We haven’t had any staff shortages and even when opening new stores we generally fill up all of our positions with about a month to go, which is really really encouraging

“We did the classic cost-of-living payment for our staff in November and that was well received, but what we did in tandem was massively increase the rate of the staff discount on our own-brand products. We offer 60% off every single time staff transact and adhesion rates have gone through the roof.”

You have been CEO for nine months, what has it been like? 

“Really challenging. I’ve got three young children, so it’s really tiring. But with a great team, opening new stores and coming off the back of a wonderful Christmas trading period, it makes it worth it. 

“We’re really well positioned but that doesn’t mean we don’t have to do the retail basics right. My team was really focused on being data-driven. Three-quarters of our customers shop regularly with us, we know how they shop, we know what pets they have, and we know where they live. Put that all together and you get this wonderful momentum in the business.

“We’re a bricks-and-mortar retailer that’s opening shops and providing jobs for people, and that’s hugely fulfilling for me, personally.”

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