Hotel Chocolat ramps up online business to ensure year of growth

Hotel Chocolat has recorded revenue growth of 3% in the year ending 28 June 2020, with the retailer ramping up its online business in the fourth quarter to adapt to the Covid-19 crisis.

While group sales increased 14% year-on-year in the first six months of the period, there was a 14% drop in the second half of the year. This was due to the closure of its UK physical stores from 22 March to 15 June as a result of Covid-19 lockdown restrictions.

The chocolatier was able to partially compensate for the loss of store revenue by increasing online sales 200% year-on-year in the three months to 28 June. This period included the crucial Easter weekend and Mother’s day when “business was able to migrate a significant proportion of these sales to online”.

The group added that it was able to boost sales of subscriptions and recurring purchases by 47% in the fourth quarter of the year to support this digital growth. In May, it revealed it is fast-tracking its investment and innovation plans for its digital and subscription model.

Hotel Chocolat remains positive about its future outlook, revealing it is creating 200 new jobs this year, primarily across its UK chocolate-making factory and enlarged distribution centre.

It’s factory in Cambridgeshire has returned to operations since May, while 119 of its 125 stores are now open for business.

Angus Thirlwell, co-founder and chief executive officer of Hotel Chocolat commented: “Our physical retail usually accounts for over 70% of sales in the second half, but all locations were closed for the entire Easter period this year and beyond. It is a testament to our lovely customers’ loyalty that they switched in droves to online and we contained the Group impact to only -14% in the half.

“Online, our brand is now set to a significantly faster growth trajectory, delivering gifts, subscriptions and household indulgence. Some of this is attributable to Covid-accelerated change, but new concept launches, and digital enhancements have also supported growth. The Velvetiser in-home drinks system, the VIP loyalty programme, and new subscriptions capability will continue to generate growth in the years ahead.”

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