Majestic performance as customers flock to buy at wine retailer

The wine retailer, which has 165 stores across the UK, said it wants to expand to at least 330 stores at a rate of 12 a year, after it saw like-for-like sales growth of 5.3 per cent in the year to the end of March.

Majestic recorded profits of £20.3m in the year to March 28, up 26 per cent from £16m the previous year, with total sales up 10.3 per cent, at £257.3m.

The group, which cut the minimum order size from 12 bottles to six in 2009, saw strong growth in sales of Argentinian and New Zealand wines, as well as Italian sparkling wine Prosecco. Sales of fine wines, classed as £20 per bottle and above, were up 23.7 per cent.

“It was becoming increasingly apparent that the reduction in our minimum price requirement has widened our customer demographic,” said chief executive Steve Lewis.

“We still have the classic Majestic customer – the BMW or Mercedes driver – but we’re also seeing a much younger customer because six bottles makes it much more accessible.”

Mr Lewis said Majestic was also selling more wine to party organisers, as the company is able to offer free delivery, ice and beers as well as the core wine product.

Majestic, which has six stores in Yorkshire, doubled its store opening rate to 12 during the year, adding sites across the South.

The company said while average spend per customer was down 2.5 per cent, to £126, the number of customers increased by 8.2 per cent, to 511,000 in the year.

Chairman Phil Wrigley said that while market conditions remain challenging, it has continued to see strong trade – reporting 4.4 per cent like-for-like sales growth in the 10 weeks to June 6.

Wine retailer Oddbins plunged into administration in April after its rescue plan was turned down by creditors. First Quench Retailing, owner of Threshers and Wine Rack, went into administration in 2009.

David Jeary, analyst at broker Investec, said Majestic’s forecast-beating results were down to the “positive reaction” of customers to the reduction in the minimum purchase quantity.