Cats and Dogs?

Cats and Dogs?

Greencross Limited (ASX:GXL) is rolling out a chain of co-located retail stores and veterinary clinics. Since a business’s success is dependent on its staff, how is Greencross going to manage people with such different qualifications and needs?

Greencross has recently merged with Petbarn, the retailer with the iconic yellow stores that sells pet food and accessories. Petbarn does not require staff with a high skill set – the only prerequisite is a love of animals. As customers are encouraged to bring their pets into store, they must be welcomed by staff who instinctively want to lavish attention on their loved ones. Customers are more likely to return if they receive that connection, so it’s easier to train staff to upsell dog food than it is to feel affection.

Hiring and retaining vets requires a more concerted approach. Greencross expands their network by purchasing well-established, “small animal” veterinary clinics. These clinics are typically owned by the primary practicing vet, who has dedicated much of their life to building the business.

The combined vet and retail model will be most accretive if the Greencross vets engage with the Petbarn customers, but many vets may be resistant to this change after running the business for so long. At their heart however is a love for animals – and this is the reason they became vets in the first place. So just like their retail staff, Greencross will encourage vets in-store by appealing to this value in their training programs. When Greencross purchases the clinic, they also take on all the administrative and financial responsibilities that are considerable burdens on the previous owners. This allows the vets to do what they do best – care for sick animals.

This model is also accommodating for vets that are graduating from university. The younger generation typically desire more freedom than seasoned professionals, and don’t want to be committed to a single vet clinic for the rest of their lives. If Greencross can provide the best equipment and working conditions, then they should be able to retain their key staff if they wish to move to different locations.