Earlier this week the confectionary retail store Hotel Chocolat announced that it had achieved double-digit growth for both sales and profits over the last financial year. From these results, they remain ‘confident of further growth’ in the UK.
Despite the adverse conditions experienced by most high street stores in the UK, the luxury chocolatier has seen revenue increase by 11%, with pre-tax profits increasing by 13%, approximately at £12.7 million.
This announcement had an obvious positive effect on share prices, which rose by 3% during the day’s trading, climbing from 7.8p to 8.8p per share.
The news is somewhat of a surprise to the vast majority of analysts. On the surface, this increase seems unexpected due to the decline in the value of the pound, combined with the increasing price of commodities heavily used by the chain, namely sugar and cocoa beans. Despite this, the company has opened 15 new stores throughout the UK in the past year.
Following this success, it gives the company greater confidence in their plans to enact a new partnership with Scandinavian firms, as well as their expansion into the United States and Japan, both of which are set to receive their first Hotel Chocolat stores during the winter of 2018.
In the UK, the chain boasts 113 traditional stores and 30 cafes. Digital revenue only accounts for 14% of the firm’s takings, with growing amounts of this revenue being produced from wholesale partnerships; their largest one is currently with Amazon.
Hotel Chocolat prides itself on its brand image, presenting customers with luxury chocolates made from high-quality organic ingredients. Equally, they are experts in retaining brand loyalty via customer loyalty schemes and frequent exclusive offers and promotions, only available to those who have made recent purchases, or signed up for their newsletters.
“The encouraging performance of our UK channels means we remain confident of further growth, with an exciting range of new product innovations for this autumn,”
He also commented: “We are increasingly confident that international expansion presents a growth opportunity, and will be adopting a cautious ‘test, learn, grow’ approach to our new partnership in Scandinavia and our new ventures in the US and Japan, where we intend to open our first stores this winter.”
If Hotel Chocolat continues their current marketing and branding models, there is every reason to believe their success in the UK will be repeated overseas, suggesting that, in some specialist areas, the decline of the high street is not universal.