Trading Places – Cocoa Amore24 August 2021
Pete Gardner is the founder and Director of Leicester-based Cocoa Amore, having taught himself chocolate making in 2009. A serial entrepreneur, Pete works closely with the region’s BIDs (Business Improvement Districts) and was a founding member of Loughborough BID. He recently took part in the Business Gateway’s Peer Network for Food and Drink. Here he shares his thoughts on surviving lockdowns, innovation, online selling and challenges of being a retailer in 2021.
As the UK and Leicestershire specifically come out of lockdown and continue to work through the impact of Brexit, how has your business Cocoa Amore faired during two very difficult years?
It’s not been easy, and I know many High Street businesses have struggled. My normal business model is Christmas, Valentine’s, Mother’s Day and Easter. For the last two years that’s not how it’s been: I was locked down two weeks before Easter last year and I was released from lockdown two weeks AFTER Easter this year. That meant that I missed my second biggest season both years.
I’ve usually got cash reserves from Easter to keep me going through the summer which is traditionally the worse time for chocolate sales but, of course, I didn’t have those. Fortunately, I had my best Christmas ever last year, bringing in much-needed revenue which helped us keep going.
I also had some luck because, when lockdown came, I had already set up an online chocolate business. I’d been thinking about this for a couple of years before COVID, and I finally separated my online business away from my Leicester business back in August 2019. I built a webstore and hired an online sales and marketing manager to deal with all the logistics of selling online because it’s a very different approach. I separated my online business so that I could become a flat rate VAT payer and pay 4% of my turnover instead of losing 20% off the retail value which I’d done previously.
This turned out to be a lucky move because four or five months later we were in the first lockdown and I was ready for it. My online store had a very good Easter and sold out.
How are your town centre stores performing?
In my physical stores, you’re buying an experience that you can’t find online. You have to come through the door for the knowledge, the level of service, the smell, the taste. You can make your own chocolates in the store. It’s very easy to sell chocolate as part of that experience, you can’t do that by buying a box of chocolates online.
Because of this experiential approach, the business model for my physical stores is reliant on having the staff. I had to stop furlough two months ago when we came back. I’m currently running on reduced hours still. If I have a door open, I have to have someone in the shop – which costs money – so I’m only doing Thursday, Friday, Saturday because the footfall in town hasn’t recovered yet with lots of people still working from home and the over 50s are still staying away, it seems.
There are still opportunities to reduce costs now that were never there before. Landlords are really willing to negotiate on rents whereas they didn’t use to be. I’d definitely recommend doing this if you’re a city centre business.
Have you made any other changes or innovations to reduce your costs?
Yes, I’ve had to. During lockdown, we all suffered from the global shortage of corrugated cardboard which meant we couldn’t package our goods to send them out. I was forced to look for an alternative supplier and spoke to Steve at Gartree Press who’d been helping with other aspects of our print for years. Gartree Press were able to help me redesign our chocolate bar sleeves and gift boxes and reduce our costs by half. And they also use any excess card to print gift tags and business cards for me so there’s no waste.
How did the Business Gateway support you during this?
The Business Gateway has done a lot for me to be honest. Altaf (Ahmed, Business Adviser) signposted me to a lot of grant funding and I was successful with an innovation grant that I didn’t even know about recently, with £5,000 to source the new packaging I just talked about. We got a council grant to design and prototype it and make the knife forms so now my printer cuts them out and prints them for me so I never run out of packaging now. This is something I’d recommend other businesses look at to maintain their packaging supply and reduce their costs.
What’s your longer-term view for the rest of the year?
I am worried that in October when furlough ends, unemployment may go up and that will mean less disposable income and fewer shoppers on the High Street again. But I’m expecting another best Christmas ever this year because I’m opening my third shop this week in Grantham, so I’ll have three shops trading at Christmas. Hopefully, they’ll do very well. It’s just a bit of a struggle at the moment to make sure I’ve got the cash reserves to buy the stock to go on the shelves for Christmas, to make a profit. But I’m also planning for another sell-out Christmas from my online shop so fingers crossed.
If you’d like to join a Peer Network, like Pete did, just click here.