Festive sales taste sweet for Hotel Chocolat

Hotel Chocolats co-founder and chief executive, Angus ThirlwellHotel Chocolats co-founder and chief executive, Angus Thirlwell
Hotel Chocolats co-founder and chief executive, Angus Thirlwell
Hotel Chocolat has reported a jump in sales over Christmas, boosted by a big rise in the number of people signing up for its VIP membership.

The VIP Me membership card offers members discounts, surprise birthday gifts and exclusive previews on new products as well as evening tastings accompanied by a glass of prosecco.

Hotel Chocolat’s sales rose 11 per cent in the 13 weeks to December 29, helped by new store openings. Sales rose 14 per cent in the six months to December 29.

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Hotel Chocolat’s co-founder and chief executive, Angus Thirlwell, said: “This was another strong performance from Hotel Chocolat.

“We’ve made our multichannel model work even better with our VIP Me membership of 1.1 million.

“In Yorkshire, we’ve got hundreds of thousands of people signed up to join our VIP club. If we know you’re vegan, we can talk about our new, creamy Nutmilk.”

Mr Thirlwell said he was particularly pleased with the performance of the group’s physical locations in Yorkshire.

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“We are making shops a destination rather than people popping off the pavement, which unfortunately many retailers have to rely on,” he said.

“One store that really jumps out is our really big flagship site in Trinity Leeds, which continues to be a real chocolate powerhouse.

“All of our Yorkshire stores performed really well, including Meadowhall in Sheffield, York and Harrogate.”

Mr Thirlwell said that rival Thorntons’ decision to close its store in York city centre earlier this month will provide an opportunity for Hotel Chocolat.

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“Thorntons has closed in York after literally hundreds of years, which is sad,” he said.

“We hope to be the new, long term torch bearer for British chocolate. We hope to be the nation’s and Yorkshire’s favourite premium chocolate brand.”

The company is to change the way its supply chain operates in order to become more internationally focussed.

Mr Thirlwell said that sales since December continue to be in line with expectations, but “the cost to deliver this growth was modestly higher due to inefficiencies in the supply chain which are being addressed in 2020”.

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Analyst Georgina Sreeves at GlobalData said: “Keeping on top of trends has been fruitful for Hotel Chocolat, with its recent release of vegan ‘Nutmilk’ perfectly timed for Veganuary, a month in which popular food retailers have been battling to offer the best vegan alternatives.

“VIP Me membership has continued to gain traction, now boasting 1.1 million members, and it now has an excellent base for customer analysis and to further improve in-store experience.

“However, investor confidence has been hit by Hotel Chocolat’s ‘moderate’ cost increases, seeing its share price falling by 4 per cent in early morning, and perhaps the lack of information around the depth of the supply chain inefficiencies, and how they will be tackled has undermined the positive message of its topline growth.”

Analyst Jonathan Pritchard at Peel Hunt added: “Barely any retailers have matched Hotel Chocolat’s like-for-like sales growth in the last six months.

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“However, the second quarter was about 6 per cent slower than the first quarter in growth terms, and learning about the peculiarities of its new markets has come at a cost.

“The shares had probably got a bit frothy anyway, and the downgrades don’t reflect anything but early growing pains, so in our mind today’s probable weakness may offer the entry point that many crave.”

Hotel Chocolat said its home hot chocolate machine, the Velvetiser, continued to grow in popularity with customer demand for new recipes, including dark mint and white raspberry flavours - exceeding initial forecasts.

Last month, Mr Thirlwell revealed he had started asking landlords for rent reductions, feeling his business was being penalised for its success, whilst neighbouring retailers were getting cuts using an insolvency process called a CVA.

He said reaction had been reasonably positive.

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“We definitely had some reaction from landlords, but they didn’t panic,” he said.

“We’re trying to inject a dose of realism. Landlords want sustainable business models and I’m a great believer in win-win arrangements.”