Thorntons sold more chocolate online in the first half of its financial year, but sales through the major supermarkets and through its own stores declined, hitting turnover and profits as a result.
The chocolate maker and seller today reported revenues of £128.2m in the six months to January 10, down by 8.2% from £139.7m at the same time last year, while profits of £6.5% were 8.5% down on the £7.2m of last time.
Online sales through the retailer's consumer direct channel of £4.5m were 11.4% up on revenues of £4.1m at the same time last year. Hamper sales were a highlight, with sales up by 49% over the period.
"Despite being a small part of our overall sales mix, during the period under review we have had success in delivering a more profitable balance between sales and marketing investment and we continue to focus on this," said Thorntons in its statement.
But performance in its commercial channel fell short of expectations, with sales of £62.7m down by 11.2% on the £70.6m turned in at the same time last year. Within this, fast-moving consumer goods sales to grocers and third-party retailers were, at £54.7m, 12.4% down on last year's £62.4m.
"Despite an increase in sales in many of our grocery, convenience and high street accounts," said the Thorntons statement, "we experienced an unexpected reduction in previously indicated orders from two of our major grocery accounts where, in particular, prior year selling space to high-volume lines was not repeated. This resulted in a decline in our overall share of the Christmas market (total boxed chocolates plus seasonal specialities - 18 weeks to 27 December) to 7.4% from 8.4% the prior year. The significant majority of this shortfall is attributable to these two grocery accounts."
It put this shortfall down to the need to improve its relationship with the two grocers, rather than a shortfall in customer demand which, it said, was "strong and growing."
International sales provided another sweet spot, with sales of £5.4m, some 19.9% ahead of last year's £4.5m thanks to strong sales in the US.
Jonathan Hart, chief executive of Thorntons, said: "Our retail performance and brand tracker demonstrate that the Thorntons' brand continues to strengthen, providing us with the confidence that we can improve certain commercial relationships, focussing on sustainable growth. We continue to make planned investments in people, systems, and manufacturing capability, needed to succeed in the FMCG market. We have taken the first steps in a programme to improve the effectiveness and efficiency of the core business, restructuring our executive team and business functions in order to create an organisation that will win in FMCG.
"The difficult trading conditions in our UK commercial channel have persisted into the second half. Ahead of our key spring seasons, we continue to be cautious in our expectations for the full year. We maintain strict control of costs and production and remain confident of our strategy. We are well positioned to take advantage of an improvement in consumer spending."