Hotel Chocolat to raise chocolate box prices as cost pressures mount
The luxury chocolate retailer saw annual underlying profits jump to £10.1 million, up from £2.4 million the previous year.
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Hotel Chocolat has added to mounting consumer misery in the run-up to Christmas as the group revealed it is hiking prices across its chocolate ranges.
Co-founder and chief executive, Angus Thirlwell, told the PA news agency that the luxury chocolate retailer is increasing prices in response to higher costs, increased lorry driver wage hikes and further investment in its cocoa farming communities.
He said the move would see prices increased across a number of products in its chocolate ranges from alcohol to chocolate collections – many of which have not seen price rises for five years.
He said: “We’re moving to increase prices now to protect quality and make this important investment into sustainable cocoa farming.”
We'll have really good availability of Hotel Chocolat products for Christmas and there won't be any empty shelves
He added: “There’s quite a bit of inflation around in the supply chain – some of it is temporary and will unwind, while some isn’t.”
It comes as the group joins businesses across the UK in battling cost pressures, with inflation rising for everything from raw ingredients to gas and electricity.
Mr Thirlwell also said the group moved to give its team of lorry drivers “chunky” double-digit percentage pay rises to secure staff amid the HGV driver shortage.
This, together with the group’s UK-based distribution and chocolate factory in Huntingdon means it has been able to avoid the supply and stock issues that have blighted many other retailers and UK firms since the start of the summer.
Mr Thirlwell said: “It means we’ll have really good availability of Hotel Chocolat products for Christmas and there won’t be any empty shelves.”
But it has added to Hotel Chocolat’s costs, coming on top of its pledge to invest another £2 million this year into its cocoa farming communities, paying them a higher price in return for a commitment for sustainable farming.
The price comments came as it notched up a better-than-expected annual profit haul thanks to a shift towards online sales offsetting lengthy lockdown store closures.
The group reported underlying pre-tax profits jumping to £10.1 million in the year to June 27, up from £2.4 million the previous year.
On a statutory basis, the group swung to a £7.8 million pre-tax profit from losses of £7.5 million the year before.
Revenues rose 21% to £164.6 million, with more than 70% of sales made online, as well as through partners and subscriptions, helping it overcome six months of store closures due to Covid restrictions.
The digital push has seen online sales overtake store sales for the first time in the group’s history, ratcheting up from just 15% of total business in 2019.
The firm said sales growth also ramped up further from April as high streets were allowed to reopen.
The group confirmed it repaid £3.1 million of furlough cash on September 24, as previously announced, thanks to the robust performance throughout the crisis.
Hotel Chocolat said it remains “committed” to the high street but said a strategy led by online sales will offer the best growth outlook.
“We can achieve faster overall growth and higher customer lifetime value by continuing with our digital-first strategy, with both channels playing a crucial and complementary role,” the group said.
It added its expanded global reach would further bolster its performance.
Analysts at Liberum praised a “transformational” year for the retailer.
They said: “From a UK-centric brand five years ago to one with global ambitions, the last year has seen the group raise fresh capital to set these foundations in place.”