Hotel Chocolat has said the post-Brexit vote surge in the price of cocoa will not mean customers have to pay more for its upmarket chocolate products.
The chocolatier said it had seen no change in trading since the referendum result and insisted that its business would weather a likely economic slowdown.
In Hotel Chocolat’s first trading update since floating on the stock market, it said revenue in the year to 26 June rose by 12% to £92.6m – slightly better than expected.
Hotel Chocolat shares floated in May at 148p each. They jumped to 210p soon after as investors sought to buy into the trend for consumers pay more for food products they perceive to be of higher quality. The shares fell heavily after Britain voted to leave the EU; however, at 178p, they are still above their offer price.
The fall in the value of the pound since the referendum result was announced has helped push up the sterling price of cocoa, which reached a near-40 year high last week. If sustained, this could increase the cost of chocolate, of which the average UK person consumes 7.4kg (16.3lb) a year.
Despite using more cocoa than most chocolate producers, Angus Thirlwell, the chief executive of Hotel Chocolat, said it would not feel the effect because the retailer buys cocoa a year ahead and is insured against rising prices.
“We buy a wide variety of ingredients including hazelnuts, almonds, cherries, alcohol and sugar, and when one is up, another is down and broadly it balances out. There are also so many other things we can do, so we don’t give our loyal consumers a nasty surprise,” he said.
Hotel Chocolat could, he added, expand its factory more quickly to gain economies of scale, or make further improvements to deliveries to increase efficiency, before raising prices.
As retail industry figures showed that consumer spending slowed significantly in the run-up to the referendum, Thirlwell said he had seen no slowdown. Hotel Chocolat customers are relatively well off, its products are not a big purchase for them and they are loyal to the brand, which expanded during the financial crisis, he added.
“Since the end of June, we’ve had another couple of weeks and trading has been in line with our expectations. The fact we’ve been through a few more challenging trading environments historically and have managed to continue to grow in those environments means we can approach that not with confidence, but with resilience,” Thirlwell said.
