Thorntons fate of store closures poses further high street challenges
One of the biggest breaking news items of this week was undoubtedly the decision to close all of Thorntons stores in the UK amid ongoing pandemic trading challenges, affecting a total of 600 jobs in the much-cherished business.
With the company having more than 100 years of history as part of Britain’s traditional high streets, its shock departure adds to the mounting casualty list of key retailers over the past year – signalling major changes ahead for how firms elect to trade in future.
As many companies face tough times having been forced to shut amid successive lockdowns, even some level of support from the government coming in the form of furloughing schemes, may well not be enough to ensure their future viability.
So it seems with Thorntons in its physical form, which began life in Sheffield in 1911 as a humble enterprise, only to grow into of the UK’s key confectionery assets over the coming decades. Just six years ago, the company was bought by Ferrero for a reported sum of £112 million. It has stated its intention to keep the traditional British brand going online.
However, it had invested notably in revamping its network of 61 stores across the country, but even this strategy has been seemingly impacted by the most unwelcome pandemic, that has left a major impact on many sectors of industry, withe the country now collectively facing more than £2 trillion in debt in tackling the fallout of the once in a century situation.
As we have reported over the past year, stores have increasingly looked to recover their revenues through online trading, and it’s fair to say that there are some segments that appear to have done well – with noted growth with snacks in particular.
But it seems the highly competitive premium chocolate segment has posed its own unique challenges – while consumers appear to be eating more high-end confectionery, they’re also increasingly spoilt for choice with options.
This in turn posed a particular challenge to Thorntons, which had noted trading challenges in the build-up to the pandemic that only appear to have unfortunately deepened as stores have been forced to roll up their shutters during the past twelve months.
While the company has confirmed its stores will close, it said it remains committed to trading online – which itself is no surprise, with a number of confectionery businesses taking the chance to significantly upgrade their websites and online offerings during 2020.
This is far from a situation unique to the UK in terms of consumer habits. As Confectionery Production noted last week, the US National Confectioners Association revealed that last year saw online confectionery sales increase by 75% to record $3 billion in sales, with web stores no longer seen as a ‘nice luxury’ but are an essential part of companies trading tools.
So, it will interest to see how the remainder of 2021 pans out in terms of how physical retailing attempts to recover around the world, one thing is for sure, companies will have to work exceptionally hard to tempt people out once again to restore previous patterns of commerce in which high streets were the driving force of many economies.
- Neill Barston, Confectionery Production editor.
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