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Hotel Chocolat heralds full-year sales growth, as customers engage in-store, online and through subscription

Hotel Chocolat has heralded a 21% rise in full-year sales and says that the combination of digital, subscription and in-store sales is helping it to grow customer engagement and lifetime value. 

In a trading update today, the retailer says its full-year revenue will come in at £165m in its latest full year, to June 27. That’s up by 21% compared to the previous year to June 2020, and by 24% compared to pre-pandemic 2019, and the retailer expects that pre-tax profits will beat previous expectations. 

The retailer says trading has stayed strong now that all of its sales channels are open. In the 10 weeks from April 19 to June 27, group sales grew by 34% compared to the same period in 2019 ad by 63% compared to the same period in 2020, when all shops were shut. Product sales in the US grew by 62%, with more than 75% of sales through its US website, while sales at its Japanese joint venture partnership grew by 277% on the previous year. 

Over the last 18 months Hotel Chocolat’s UK customer database has grown by 66% to three million, and it says that digital and subscription sales are now a “substantially larger proportion of the group’s total revenue and have remained so after full store channel reopening.” Customer lifetime value has risen along with visits, conversions and average order values and the retailer says its customer engagement is supported by digital and subscription working together “brand-building” stores. 

Now that its stores are open, the retailer has negotiated down 30% of store rents, either with rent fixed at a lower amount or a reduced percentage of sales – and says that the remaining 70% of leases will come up for renewal or expire in the 24 months. Since its stores reopened on April 12, Hotel Chocolat says that trading has been strong in smaller cities and market towns, making up for lower footfall in commuter and tourist locations. Hotel Chocolat now expects that to continue to improve in the coming months. 

Plans for expansion

In March 2020 the retailer raised £22m a new equity and it has now invested that in digital, in expanding its UK chocolate factory in preparation for adding three more production lines next year, and in more than doubling the size of its distribution centre from 113,000 sq ft to 207,000 sq ft. 

The Hotel Chocolat group will now repay the full £3.1m that it received in the financial year. 

Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, says: “I am fortunate to be able to say that the growth avenues ahead of us have never been better in Hotel Chocolat’s history. The strategies we put in place two years ago are now delivering accelerated growth. Our Velvetiser in- home drinks system, our VIP and digital programmes, and our USA and Japanese joint-venture start-ups have step-changed our growth potential.

“Our goal of becoming the most tech-activated chocolate brand is moving forward in leaps and bounds and is already helping to power our major achievements and future growth. Indeed, this year we expect more than 50% of our sales to come from digital, partners, and subscription-continuity models, reflecting how Hotel Chocolat is growing and evolving. Our brand-building stores will continue to play a pivotal role in our digital-led business, with an unrivalled ability to introduce new customers to our brand. 

“I am particularly excited by what we have achieved so far in the USA and Japan, two of the three largest economies in the world. We have great growth opportunities there for Hotel Chocolat and strong teams in place to drive and support it. 

“We are proud to be making our chocolate in the UK and will be creating over 250 new roles this year as we grow our team, from designers and data gurus to engineers and apprentices.”

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