Hotel Chocolat hailed the bounce back of the high street over the Christmas period and unveiled plans to ramp up store expansion over the next three years.

Hotel Chocolat

Hotel Chocolat reported like-for-like sales growth of 10% in the nine weeks to Christmas Day

The chocolate specialist reported like-for-like sales growth of 10% across its UK and Ireland stores in the nine weeks to Christmas Day.

While not giving an exact figure, Hotel Chocolat reported that online sales were lower due to the return to stores and a reduction in marketing budgets. 

The retailer also gave like-for-like numbers stripping out new stores and refitted stores, which reported UK sales up 7% to £74m and up 25% like-for-like versus pre-Covid first-half numbers. 

Hotel Chocolat founder and chief executive Angus Thirlwell called it a “natural rebalancing” between bricks-and-mortar and online. He said the retailer would be opening a further 50 new stores over the next three years. 

“We think that physical stores, particularly over the next three years, are extremely attractive for us in the UK. So we’re anticipating opening around 50 more stores, up and down the country, in the next three to maybe five years.”

Thirlwell also said online sales had been affected by the Royal Mail strikes and noted that the cost of marketing on digital platforms such as Meta, which owns Facebook and Instagram, had ballooned. 

“I’ve been in meetings where we’ve wondered if we really want to be spending this large amount, which goes into Mark Zuckerberg’s pocket, or whether we’d rather bring a new Hotel Chocolat to a community or make another, longer-term investment in something else. 

“I’ve been in the digital game long enough that I know that there’s a pendulum swing that is going to happen. It comes and goes. And we have the agility to be able to adapt our investments to optimise to what we can see on the horizon.”

Thirlwell said the coming financial year would be one of “getting back to running a tight ship” at Hotel Chocolat, which would include some operational cost-cutting focused on “looking at how the business works as both a retailer and a manufacturer”. 

The retailer is also making changes to its operating model internationally in both Japan and the US.

Two weeks ago, Hotel Chocolat announced a strategic partnership with Tokyo-based Eat Creator Corporation.

Thirlwell said the partnership meant Eat Creator Corporation would be bringing in its own knowledge of supply chain in the region, as well as investment. Hotel Chocolat was forced to write off nearly £30m after its Japanese arm collapsed into administration

“Retailing internationally is really hard and very few people get it right the first time,” he said.

“So we decided to do a big change there and look for a new partner that had expertise in local supply chains and would also put the capital in themselves rather than us.

“We built it to the point that it is and we were looking for somebody to share with us in seeing the opportunity ahead and being prepared to stump up some of their own cash.”

Thirlwell said the plan in the US was the same, but that things still needed to be finalised before any official announcement.

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