Lindt & Sprüngli has insisted it will maintain its “premium” prices in the UK despite sales coming under pressure in the country in the first half of the year.
The company’s performance in the UK was one disappointment in an otherwise solid set of half-year results.
The upmarket Swiss chocolate maker saw its sales grow by more than 6% on an organic basis in the first six months of 2011, once the impact of foreign exchange was removed for the results.
Lindt said it enjoyed “solid growth” in Switzerland and made “particularly good progress” in Germany, France, Italy and North America. However, Lindt admitted it had “failed to meet expectations” in the UK, a market that accounts for 5% of sales.
The company said its UK sales had suffered in what it described as a “difficult economic climate”.
Economic conditions across Europe remain challenging but a spokesperson for Lindt said UK consumers were more negative about the prospects for the economy than in some of Lindt’s main markets on the continent. “Uncertainty seems much higher in the UK than in Germany,” the spokesperson said, who also insisted the company’s first-half performance in the UK suffered from a comparison with a “very, very strong” first half of 2010.
However, Lindt does not plan to increase its number of promotions in the UK to drive sales. Instead, the spokesperson indicated, the company plans to look to innovation and marketing to boost sales.
“We do some promotions but they are not aggressive,” the spokesperson said. “We will stick to our pricing policy. We have a premium image, we are a premium chocolate and have premium ingredients. We have a little premium in our prices and we want to stay there.”
The spokesperson would not comment directly on Lindt’s innovation and marketing strategy for a specific market like the UK but said the company would look to new products and advertising across the company to drive sales.
“We definitely will continue to have a high pace of innovation and we will continue to maintain or even increase our high advertising spending,” the spokesperson said.
Lindt said that the “majority” of its subsidiaries had managed to outpace the growth of the global chocolate market during the first half of the year. The company opened a new subsidiary in South Africa in May, two months after it announced a revamp to its management structure to drive international expansion.
The spokesperson said a key part of Lindt’s overseas strategy would be to open more Lindt Chocolat Cafés. The company already has outlets in Australia and Japan and plans to open its first in China by the end of the year, the spokesperson revealed.