Majestic Wine posts rosé results

Majestic Wine's profits have jumped 27%. It's refreshing to see a wine retailer toasting high-street success...

by Dave Waller
Last Updated: 04 Jan 2013
Indeed, it’s bottoms-up time at Majestic, which made pre-tax profits of £20.3m in the year to March, and beat market expectations with total sales jumping 10% to £257.3m.

Flushed with this success, it’s now planning to double its number of stores to 330, after opening 12 in the past year (compared to six the year before). Which is all a damn sight better than the recent form of other purveyors of high-street plonk: Oddbins went into administration earlier this year, while Threshers fell victim to the 2009 recession. Both chains died a death at the hands of weak consumer spending and the rise of supermarkets peddling budget booze.

So what’s behind these Majestic figures? As well as mopping up the spillage from its punch-drunk rivals – the ‘last man standing’ effect, you might call it – the retailer reckons the key to its recent success was the decision to cut the minimum order size from 12 bottles to six in 2009. While proving more attractive to what chief exec Steve Lewis describes as the ‘classic Majestic customer - the BMW or Mercedes driver’ it’s also hooking in younger punters too. All told, customer numbers increased by 8% to 511,000 in the year.

Business was also helped by strong growth in its commercial sales division. Sales to restaurants, hotels and gastropubs were up 17% on the previous year, representing 24% of total UK sales. Majestic also sold more wine to party organisers, bolstering the core wine product with free delivery, ice and beer. And it’s doing well on the web: online sales were up 9.6% on the previous year and now represent 10.2% of all sales.

And while it may seem counter-intuitive, sales of fine wine - that’s bottles over £20 - grew 24%, making up 6% of all Majestic sales. Further proof, following the recent headline-grabbing success of luxury brands, that when the nation tightens its purse-strings, it pays to serve the top end. 

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