British bubbles help Majestic toast profit rise

Sales of English sparkling wine at Majestic Wine 'significantly increased' over the last year, although the wine warehouse retailer saw a dip in sales overall.

by Elizabeth Anderson
Last Updated: 18 Nov 2013
After a turbulent year, pre-tax profits at wine warehouse retailer Majestic Wine edged up £0.5m to £23.7m over the year to the beginning of April – despite a slide in total sales overall, which slipped 2.1% to £274.4m.

Majestic Wine, which has 193 stores across the UK, said consumers are showing more resilience to paying more for an expensive bottle. Sales of fine wine, priced at more than £20 a bottle, increased by 9.4% on last year, and there was a 'significant' increase of English sparkling wine sales, the company said in its a annual trading update.

Majestic Wine has had a mixed year. The washout summer last year and the distraction of the Olympics weighed on sales at the UK's largest wine retailer, as the wet weather put a dampener on outdoor events and parties. The company had expected a boost in sales over the Olympics, but the Games failed to deliver. 'The Olympics was a triumph for the UK, but a huge distraction for everyone else,' CEO Steve Lewis said in October when the company reported its half-year financial results.

However Majestic Wine benefited from a boost in customers, which rose by 56,000 to 624,000 during the year, while the average spend on a bottle of wine rose from £7.34 to £7.56.

Online sales also rose significantly, jumping by 14.7% in the last year and its internet business now accounts for 11.1% of total sales. But the firm isn't shutting up shop just yet. Majestic Wine said it will continue to focus on opening new stores - it opened 16 new stores last year and expects to open a similar number this year.

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