Thursday 10 May 2012

Discounted Thorntons chocolate

It is such a shame that Thorntons chocolate shops are still struggling, reporting a 2.7% drop in third quarter sales this week. And now the news that the UK chocolate manufacturer and retailer intends to turn a good number of its more troubled stores into factory outlets, selling off end of lines, shorted dated stock and over stocks at a typical discount of 50% (The Grocer 5 May 2012). 

When the UK confectionery market is generally demonstrating a positive course, it is sad to see such an established British chocolate icon struggle to take itself forward at the moment. Stock has a cost and as such it might be a wise move to develop a factory shop style outlet in order to facilitate its clearance, but I cannot help thinking that this will do little to help Thornton’s image. 

Long known as a specialist and most delicious British chocolate brand, will the existence of chocolate factory outlets diminish this image and develop Thorntons into yet another discount brand? I do hope not. On the other side of the coin, many quality clothing brands manage to balance full priced stores with factory outlet stores, poised to sell off their excess and less popular stock. 

From a financial point of view, it has to be good business sense to develop a route to market for sub standard and excess stock, freeing up the asset to become additional cash flow. From a brand perspective, it will be very interesting to see where Thorntons is to go next.

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