Fort Dodge Index (FDI) data for the first six months of 2009 confirmthe downward trend in key veterinary practice metrics, with evidence of much slower growth than the same time last year.
The one mitigating factor continues to be an increase in the prices charged by practices for their services, which is leading to a small increase in average transaction values.
The FDI (www.fortdodgeindex.co.uk) analyses and benchmarks the performance of practices across the UK. Figures for the first half of 2009 confirm the trend, seen for some time, of static or steadily declining performance in key areas for practices. The national picture of turnover growth and its components for the period January-June 2009 shows that:
- Turnover growth (derived from professional fees and drug sales) is 0.7 per cent compared with 2.7 per cent in June 2008;
- Transaction volume growth (derived from active client and patient numbers and their frequency of visits to the practice) is decreasing at -0.7 per cent compared to -0.4 per cent in June 2008;
- Active client growth is at -0.9 per cent compared to -0.4 per cent last year;
- Active patient growth is at -1.5 per cent compared to -0.5 per cent last year;
- Frequency of client visits has decreased to 6.0 times per year compared with 6.1 last year;
- Average transaction value (generated by the prices charged for products and services and the number of products and services sold per transaction) has increased by 2.4 per cent to £40.36 from December last year;
- Annual transaction value has increased by 1.6 per cent to £242.22 from December last year.
Patrick Traill, corporate account manager at Fort Dodge, said: “While some practices are continuing to report busy months and high turnover, it’s clear that many are experiencing a rough ride as the recession in the wider economy affects the spending power of pet owners.
“The key challenge is that profits are being eroded at a time when turnover is also being seriously hit. The only impetus for growth so far this year has been the increase in consulting, surgical and drug fees and this alone will not help practices plan for a secure future.
“The latest FDI data confirms a trend which we’ve been reporting for some time and we urge those who haven’t yet taken action to do so without delay. While capturing new clients will always be fundamental to growth, in these times reducing client losses is equally critical and resource may well be better spent on plans that support client retention.
“Practices should also be considering initiatives to increase client visit frequency and support client bonding. Examples could include preventative health schemes and loyalty programmes. Finally, practices could also explore avenues to increase annual transaction value through the promotion of new products and services.
“Joining the FDI is an effective way for practices to benchmark their performance both against others in their locality and across the UK. Full details on the FDI, the benefits it offers to practices and how to join are available on our newly re-designed website. Full copies of the FDI report can also now be downloaded on a quarterly basis.”
A copy of the latest FDI report is available for free download at www.fortdodgeindex.co.uk. Further information on how to join the scheme is available from Fort Dodge on 01489 781811.
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