UK: Thorntons defies tough conditions as chocolate sales soar

Thornton chocolates are selling well in spite of tough economic conditions

Thornton chocolates are selling well in spite of tough economic conditions - Credit: PA

Strong sales of chocolate boxes at supermarkets helped retailer Thorntons defy tough conditions on the high street to ring up forecast-beating figures.

The group said chocolate sales through supermarkets increased 11.8% during the 10 weeks to June 29, while international sales more than doubled to £900,000, helping its commercial arm lift sales 21.1% during its fourth quarter.

And the retailer reported more progress with its high street stores’ recovery, where underlying sales edged up 0.5%, amid signs consumers are still prepared to treat themselves with indulgent goods.

But total sales in its owned stores fell 3.8% to £13.9 million after 34 closures during the year. It plans to shrink further to a “sustainable” retail estate of 180-200 stores, from its current 296 outlets.

Analysts at house broker Investec Securities hiked profit forecasts for the year to the end of June by 16% to £5.2 million from earlier expectations of £4.5 million on Thorntons’ turnaround success and growing market share.

Chief executive Jonathan Hart said: “Despite being our smallest sales quarter we have continued to demonstrate the positive impact of our strategy and the strength of our brand.

“The trading environment continues to be challenging. The actions we have taken are delivering positive results reflected by the progressive recovery in our profitability over the past 18 months.”

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Total sales during the quarter increased 5.6% to £26.8 million.

Total sales increased to £221.1 million during the year from £218.3 million a year earlier. Thorntons said its commercial arm is on track to become its largest division this year.

Neil Saunders, managing director of research firm Conlumino, said Thorntons “deserves credit” for modernising its business.

He said: “Part of the underlying issue for the company is the fact that it uncomfortably straddles the two stools of wholesaling and retailing.

“In recent years a push of product through the former channel has undermined the necessity for so many high street stores and has weakened the ability to charge a full price for product.

“This coincided with the rise of premium chocolate rivals, notably Hotel Chocolat, which are now better positioned to serve the high street consumer seeking indulgent, luxury product.”

He said Thorntons’ growth with supermarkets means it has found a more efficient and effective way of distributing its products and brands.