Thorntons today announced a profit warning, causing shares in the chocolatier to drop 12%. The group has blamed the poor performance on bad weather during the holiday period, while adding that cash-strapped punters are preferring to buy their Easter eggs and boxes of chocolates at supermarkets, rather than making a special trip to their shops.
You'd be forgiven for thinking that was always going to happen, and that it may just have exposed a gaping flaw in the Thorntons business model. But we also have to extend some seasonal sympathy: it must be a nightmare for any store to have to keep up with the supermarkets once they shift into price-war mode. Especially as it works: the supermarket sector experienced sweet success over Easter, as people rushed to take advantage of the floods of seasonal offers and stock up for the holidays.
While sales in Thorntons' branded stores fell 4.6% like-for-like for the 14 weeks to April 17, its sales in supermarkets were stronger were up 33.9%, to £20.8m. Which must make the pill a more bitter one to swallow: your products are clearly still in demand, it's just that punters are getting them from places that give you less of a profit. A bit like Lady Gaga moaning about making only $167 from 1m plays on Spotify.
The other problem that Thorntons fails to mention is that, just like Lady Gaga, it's chocolate may not be to everyone's taste. In fact since the emergence of 'super-luxury' chocolate brands, it's now stuck in the middle of the market - the worst place to be when times get tough. While those at the high end will snag anyone still prepared to throw their cash on sweets, anyone who's cash strapped will head to those supermarkets.
Thorntons said it expects pre-tax profit for the year to be around £7.5m, well short of the £8.9m expected by the City. Elsewhere its online sales grew 32.4% to £2.5m, with personalised products proving particularly popular. The company will be hoping that, along with its new Praline Melts and expanded ice cream range, will help with its resurrection.
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