Thorntons sees drop in sales

 

Chocolatier Thorntons today said it had suffered at the hands of tough competition in the run-up to Christmas as cost-conscious consumers hunted for the best deals.

The group, which has 574 wholly owned and franchise stores in the UK, said like-for-like sales fell by a worse-than-expected 4.2% in the 14 weeks to January 7.

Thorntons, which in June announced plans to close up to 180 stores over three years, said consumers were "purchasing selectively" in the period as high levels of promotional activity across the market hit its sales and profit margins.

The Derbyshire-based group, which last month issued a profits warning following disappointing trade, has been hit by the consumer spending squeeze and has struggled to keep up with competition posed by supermarkets.

The company, which employs 3,000 staff and owns 7.7% of the UK chocolate market, said it expected "continued weakness" in consumer sentiment throughout 2012.

Thorntons saw its shares plunge 27% following today's update.

Matthew McEachran, retail sector analyst at Singer Capital, said: "The main negatives remain the tough retail environment and the structural problems which the company is only slowly addressing with only nine of the own stores closed since October, leaving 344, and seven of the franchise stores, leaving 230."

PA

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