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Omnichannel model helps Hotel Chocolat to serve customers online during lockdown – and to grow revenues by 60%

Image courtesy of Hotel Chocolat

Hotel Chocolat’s growing band of customers turned online to buy and subscribe to its products in a ‘second peak’ season based around Easter and Mother’s Day this year. Its revenues grew by 60% in the eight weeks to April 25 – even though its stores were closed for five of them during lockdown 3.0.

Today the retailer, ranked Top50 in RXUK Top500 research, says that its revenue for the period was also 19% higher than the same time in pre-pandemic 2019, when all of its shops were open. The fast sales growth, it says, was driven by new customers shopping through its digital channels and signing up to subscribe to products including hot chocolate. This, it says, demonstrated the strength of its omnichannel sales model. 

Since its shops reopened on April 12, sales have been “encouraging” and the retailer expects full-year trading be “significantly ahead of expectations” in the full year to June 27. It is now repaying £3.1m in government furlough support from this financial year, which it says will be reflected in the 2021 results. 

Hotel Chocolat chief executive Angus Thirlwell says: “In the past year, we have added over one million customers to our database, an increase of 47%. Our strong Easter is entirely thanks to them. 

“It feels great to have our physical locations back open again and we have a strong pipeline of exciting new products to launch over the summer, including our Rabot Estate Coffee brand, Strawberries & Cream iced chocolate drinks for our Velvetiser system, and Neapolitan chocolate macarons for al-fresco dining. 

“I’m pleased we are able to look forward to further growth and significant investment this year with strong job creation, particularly in our UK chocolate making and supply teams as we turn on extra capacity for our creamy tasting vegan Nutmilk chocolate, our globally popular chocolate macarons, and our Velvetiser flakes for drinking chocolate. 

“I would like to commend our team on the commitment, dynamism and creativity they have all shown during the pandemic. They have not only adapted the business to the challenges we faced but have strengthened the brand and accelerated our business model and future growth prospects.” 

Today’s trading update spans the third and fourth quarters of the retailer’s financial year. Its figures for the first half of its financial year, to December 27, include its first peak period, the run up to Christmas. Then 51% of its UK sales started online,  but its peak period was “materially disrupted” by Tier 4 restrictions and store closures and sales grew by 11% to £101.9m, and pre-tax profits by 3% to £15.5m. 

Our view: The latest figures suggest that Hotel Chocolat has very successfully engaged with shoppers online – including 47% who are new to its database – through tactics including subscriptions. We’ll be watching its future updates to see whether these shoppers continue to buy once shops are open again, if these were customers who opted to buy from it primarily for its omnichannel service – and if so, whether they will continue to buy online in the future. 

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