Thorntons said today that sales have fallen nearly 3% in the last 10 weeks – and it’s partly blaming the hot weather. With Britain basking in a rather sunnier summer than usual, our chocoholism has been put on the back burner – good news for our waistlines, perhaps (unless we’re just gorging on Mr Whippy instead), but bad news if, like Thorntons, you’re an upmarket chocolate maker. However, Britvic’s recent success in shifting more soft drinks suggests that a hot summer should actually be a real boon to most retail-dependent businesses…
To be fair, it wasn’t just the sun what done for Thorntons lately. The chocolatier has also suffered from the collapse of the Birthdays chain, which used to operate 94 of its franchises – CEO Mike Davies is currently battling to tie up a similar deal with the likes of Clinton Cards to make up the shortfall. Indeed, the financial climate has been as damaging as the meteorological one: with the economy in a funk, businesses have been much less interested in sending chocolatey gifts to their clients, driving sales down 31% at Thorntons Direct. And it’s also true that Thorntons’ results tend to be quite heavily dependent on Easter and Christmas at the best of times. So it clearly didn’t need any extra heat.
It’s a very different story over at Britivic, however. With the success of the Wimbledon tennis championship and the Twenty20 cricket tournament boosting sales of Robinsons and Pepsi respectively, the drinks-maker saw sales rise 6% to nearly £250m in the 12 weeks to July 5. As a result, and despite ongoing problems in Ireland, Britvic is likely to be one of the few companies to actually beat its City profit forecasts this year (which were previously just over £100m). Although the downside is that this might make the rumoured takeover bid from Diageo even more likely to materialise…
Clearly those businesses whose sales are directly linked to the hot weather – e.g. electric fan, ice-cream and outdoor furniture makers – are going to benefit from a summer heatwave. But it’s quite likely that other retailers will too: if the weather is good, people are more likely to be out and about and feeling cheerful, which should make them more likely to spend money. So while Thorntons might be praying for a cold snap, the rest of the high street – not to mention the Government – certainly won’t be.
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Sunshine puts fizz in Britvic sales - but melts Thorntons' hopes
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