Hotel Chocolat is eyeing a wider rollout of its new “format of the future” stores as shoppers return in droves to bricks-and-mortar locations.

Hotel Chocolat Store 2

The stores include cafes selling hot chocolate and ice creams

The upmarket chocolatier, which operates 126 shops in the UK, is aiming to open more larger-format locations after new sites in Norwich and Nottingham performed “very strongly” since their openings earlier this year. 

Hotel Chocolat founder and chief executive Angus Thirlwell described the new concept, which boasts more selling space and a sit-in-cafe selling hot drinks and ice cream, as a “marked evolution” from its existing store estate. 

Thirlwell said the retailer was looking for “more confident” stores that are two to three times the size of its average shops to offer a more immersive brand experience. 

Although he stopped short of putting a target on the number of larger stores he would like to launch, Thirlwell said the “outstanding” trading at Norwich and Nottingham gave Hotel Chocolat “more headroom to develop in the UK market than we thought previously”.

“Our physical spaces are the most cost-effective way for us to recruit and retain customers. All of our stores are profitable, and they’re getting more profitable,” Thirlwell told Retail Week.

“Rents have come down because of market pressures, rates have come down a bit for us as well, and we’re driving higher sales densities than we’ve ever driven before.

“We know the migration to rediscover the joys of physical shopping is more pronounced the more experiential and more luxurious the brand is. It’s a horrible old world that we seem to be in at the moment; escapism is something that everybody would like to have and it’s what we’ve always tried to conjure up.” 

International markets

Thirlwell was speaking after Hotel Chocolat reported a statutory loss of £9.4m in the year to June 26, compared with a profit of £3.7m the prior year. Underlying pre-tax profit rose from £9.6m to £21.7m as sales jumped 37% to £226m. 

The chocolatier swung into the red on a statutory basis after incurring the costs of ending direct-to-consumer operations in the US and the impairment of loans to its Japanese joint venture partner.

Despite the difficulties Hotel Chocolat has faced in those markets, Thirlwell insisted the business was not ready to turn its back on growth opportunities outside the UK.

“Nobody gets it right first time,” Thirlwell said. “It’s very much a case of taking the learnings as you go, one step back to take two steps forward later. It’s a continual process of that until the model just kicks in. 

“The brand really travelled – people love the taste of chocolate in Tokyo [and] New York. We can really achieve cut-through. What we still need to continue to work on is the intelligence of the operating model behind that so the supply chain and getting the margins to the level that we’ve developed in the successful UK model.”

Thirlwell added that Hotel Chocolat was now fielding inquiries from ”well-resourced partners” to progress the brand in those markets.