Hershey's online candy store shutting down this month

Hershey Co. has clicked off the virtual-shopping era. "Hershey's Gifts will be closing its catalog and Web business effective July 31, 2009," after a 25-percent-off closeout sale, the Hershey's Web site told longtime mail-order chocolate-giver Buzz Griffin of Haddon Township and others who went online to price gifts yesterday. Why is Hershey going dark? "The present business model is not sustainable," company spokesman Kirk Saville told me. It costs too much, compared with old-fashioned ways of selling sweets. Hershey "will continue to evaluate all options in e-commerce, including strategic partnership and licensing agreements," Saville added. But for now, you'll have to buy Hershey's in the candy aisle, or "direct" at the company's stores in Hershey, New York, and Chicago. I asked professional shopper and retail stock analyst Holly Guthrie at Boenning & Scattergood Inc. in West Conshohocken if there's a lot of this pullback happening in the online-retail world. There is, she told me. Two reasons: “One, state-taxing issues," she said. Cash-strapped California, North Carolina, and other states are belatedly pressing to collect taxes on Internet sales, and Guthrie's collected news reports saying Amazon.com Inc. and Overstock.com Inc. have warned they will stop shipping there before they'll pay to help governments collect. "Two, many retailers have had to offer free shipping during peak selling periods, which really hurts margins," she added.