1. Chocolate value sales have increased by 9.3% in the past year
2. Unit sales of premium chocolate have grown by 8% in independents
3. Gifting sales in symbol & independent represent just 14.7% of category value sales vs 49.3% in supermarkets
4. Sharing bags are growing by 6.5%, now accounting for £430m in sales in convenience
5. HFSS restrictions have impacted single bars, but the segment still grew by 5.2%
6. PMP sales are increasing but promotions aren’t the only answer to driving sales
7. Innovation accounts for a fifth of confectionery growth
1. Chocolate value sales have increased by 9.3% in the past year
Chocolate is synonymous with convenience retail and, following close to double-digit growth in the past year, it is a market now worth £5.6bn.
“Chocolate confectionery gives millions of us a lift in our daily routine, and up to 99% of UK households buy it regularly. As shoppers’ finances are still under pressure, categories like chocolate offer comfort and an affordable treat,” says Jess Woolfrey, marketing manager – cake & chocolate for Pladis.
The category has been further buoyed by a shift in customers socialising more at home in recent years. “Shoppers are increasingly looking to enjoy evenings at home as a more cost-effective way to spend time with family and loved ones,” says Susan Nash, trade communications manager at Mondelez. “Consumers are also going back to brands. In the gifting and sharing segment, brands are outstripping the own-label competition with 11.2% total category growth year to date.”
While the category shows growth, this isn’t due to shoppers buying more products. “Growth over the past 12 months has exclusively been driven by price, with volume and unit sales both down on last year,” says Alex Lawrence, senior strategic insight director at Circana.
Retailers are finding the sweet spot by offering great value on core brands, while supporting their range with premium and on-trend products. Nishi Patel, who runs Londis Bexley Park in Dartford, Kent, says: “Chocolate is getting expensive. Right now, some single bars are the same price as tablets, which is sad to see. But we’re selling tonnes of Dubai chocolate for £10 a bar.”
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2. Unit sales of premium chocolate have grown by 8% in independents
Record-high cocoa prices are seeing consumer prices soar, even among everyday favourites. “We’re offering more price-marked packs (PMPs) as a way of showing customers value and demonstrating that the pricing isn’t controlled by us, as retailers,” says Patel.
But rising prices is presenting the opportunity for retailers to differentiate. Mike Navarro, managing director of Gnaw Chocolate, says: “Convenience is looking to differentiate itself more than ever from the multiples and so are receptive to artisanal offerings like ours that help differentiate their fixtures from the norm.”
In the 12 weeks to 25 January 2025, chocolate sales in independents took a dip. But while mainstream chocolate dropped by -9.9%, premium chocolate fell by just -4.1%, indicating that when shoppers were indulging, they were more likely to go for premium brands.
Ludia Stubbins, group marketing director for Divine Chocolate says: “There’s a clear opportunity for a premium chocolate brand, like Divine, to help independents thrive and grow basket size with a treat product. There’s been a rise in nostalgic and traditional flavour profiles across chilled desserts, beverages and sweets, with consumers increasingly searching for ‘edible escapism’. Divine identified a gap in the block chocolate market for a range of bars that bring these flavours to life in an indulgent, fun and premium way with their range of Dessert Bars, launched last year.”
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3. Gifting sales in symbol & independent represent just 14.7% of category value sales vs 49.3% in supermarkets
While bars and tablets make up the heartland of chocolate sales for independent stores, retailers are missing out on the opportunities presented by the gifting market.
“Major multiple supermarkets and convenience outlets are the clear winners over the past 52 weeks, growing value sales by 11.6% and 8.9% respectively. Growth in both these channels accelerated dramatically over Christmas with the gifting format performance, whereas sales in symbols & independents, which were up just 3.1% in the last 12 months vs last year, only increased to 5.4% up on last year in the past four weeks,” says Circana’s Alex Lawrence.
The outlook looks positive for the gifting market, indicating that stores should consider ramping up these products around key occasions, particularly Easter.
Andy Mutton, managing director of Storck, says: “Gifting formats are performing well across multiple occasions and are forecast to continue growing as consumers increasingly seek indulgent and meaningful gift options, particularly during key events such as Christmas and Easter. Although gifting is less prominent in the convenience channel compared to singles or sharing formats, it still accounted for £244m in sales, growing by +6%.
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4. Sharing bags are growing by 6.5%, now accounting for £430m in sales in convenience
“Sharing bags continue to dominate the category,” says Storck’s Andy Mutton. “As consumers spend more time at home and seek affordable treats to share with family and friends, this segment remains a crucial focus for retailers.
“Retailers must balance their offerings across formats. Sharing bags are essential for meeting consumer demand for at-home socialising, while gifting formats present growth opportunities as consumers increasingly seek convenient, impulse-driven options.”
Sharing bags is certainly one area where big brands are delivering for convenience stores. “Cadbury is a big seller for us, especially the sharing bags. We do a lot of work with Mondelez, which our rep helps us with,” says Sarj Patel, of Pasture Lane Stores in Sutton Bonington, Loughborough. “We focus on PMPs, otherwise we get a lot of customers commenting on the price and worry we’re overcharging them. We still make a relatively healthy margin and focus on volume sales.”
While core range flavours are key, it’s also important to make space for new, on-trend flavours.
“Our recent limited-edition launch, Flipz Cinnamon Bun, has added an additional sales opportunity for retailers by tapping into the ongoing popularity of cinnamon flavours, says Pladis’ Jess Woolfrey. “UK consumption of cinnamon products continues to grow, thanks in part to the growing popularity of bakeries that specialise in cinnamon buns and, with 14% CAGR forecasted for cinnamon products between now and 2027, it was the perfect time for us to expand the Flipz range with this on-trend flavour.”
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5. HFSS restrictions have impacted single bars, but the segment still grew by 5.2%
Restrictions on where high fat, salt and sugar confectionery products can be placed in store has forced retailers and suppliers to rethink category merchandising, with single bars bearing the biggest brunt.
“The impact of HFSS restrictions has been particularly pronounced in this category, as the loss of discretionary space and multi-buy promotions has posed challenges. However, retailers can drive confectionery sales with non-HFSS products by offering popular classics in sugar-free,” says Storck’s Andy Mutton.
“Chocolate singles have shown resilience in the convenience channel, generating £473m in sales with growth of +5.2%. While HFSS restrictions have impacted chocolate singles more than other formats due to reduced discretionary shelf space, their continued strong performance in convenience highlights the ongoing consumer demand for these popular products.”
HFSS measures are hitting mainstream brands the hardest. “With even tighter legislation around marketing watersheds, mass market chocolate manufacturers will find it more challenging to reach their younger target market and some degree of those chocolate snacks sales may see some cooling,” says Gnaw’s Mike Navarro.
Shoppers looking for healthier choices is a long-term trend, but this need, combined with the push from HFSS legislation is driving alternative areas of the market.
“There is evidence to suggest that shoppers are switching into dark chocolate as they recognise it is less processed, and contains less sugar, and therefore, believe it to be better for them,” says Divine’s Ludia Stubbins. “In the 12 weeks to 28 December 2024 in independents and convenience stores, dark chocolate saw the strongest growth vs previous period, with revenue up 12.2% compared with only 3% value growth for milk chocolate.”
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6. PMP sales are increasing but promotions aren’t the only answer to driving sales
“Don’t get me started on promotions,” says Gnaw’s Mike Navarro. “Traditionally in any category, if sales are down, promotional weight or frequency increases to drive the revenue line as this is a quick and easy tactic to recover revenue within the fiscal year. This short-term horizon is more prevalent within major companies, due to shareholder pressure for top and bottom line delivery of fiscal budget. But it’s quite a blunt instrument and doesn’t build consumer connections, long term equity or brand health.
“Shoppers buy chocolate as a treat. If the product is priced fairly, then promotions should play a smaller role in driving sales and energy can be spent making consumer connections fun and exciting.”
Retailers should therefore ensure that their promotions go beyond deep-dive cuts on price and instead are targeted around growing basket spend.
“While convenience shopping is increasingly being driven by on-the-go, with the mission growing 1.3 percentage points year on year, other missions provide important opportunities for retailers with the likes of big night in remaining a key opportunity,” says Mondelez’s Susan Nash. “We’re seeing a continued focus on value, with PMPs sales increasing in convenience at a total level. PMPs help deliver a value message in store, tapping into consumers’ need for ‘affordable’ treats, so they’re an important part of a convenience retailer’s range.”
By using PMPs within on-the-go and big-night-in displays, retailers can communicate value while driving overall spend.
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7. Innovation accounts for a fifth of confectionery growth
Away from price, the best retailers are always on the hunt for new products that add excitement to the category. “I tend to shop around wholesalers and even supermarkets to find new products and get the best deals,” says Sarj Patel.
“We’re focusing on looking at more niche chocolate products, which we find on TikTok,” agrees Nishi.
“Innovation accounts for 22% of confectionery growth. It is most prevalent in bars (26%) and boxed (25%). Others include block (22%), bitesize (21%), fruity confectionery (21%) and gum (6%),” says Jo Atchinson, Mars Wrigley category strategy leader – bars and bitesize. “Confectionery is an emotional purchase; it is fun, and it is a treat but it is also an impulsive category with a need for visibility. There’s an opportunity for retailers to bring it to life in store and create a visibility that will excite customers and tap into their sense of enjoyment.”
There’s a wealth of opportunities for retailers in the chocolate market. From heritage bestsellers to the currently viral Dubai chocolate, the market plays a key role of boosting basket spend. Retailers that ensure their ranges are exciting and relevant will continue to drive profits in the category for years to come.
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