Majestic eyes store growth as profits leap
FINE wine drinkers helped Majestic Wine toast an eight per cent increase in its customer base in the past year that raised its profits by more than a quarter, it said yesterday.
The failure of rival chains such as Oddbins, which went into administration in April, also boosted Majestic’s total sales by 10.3 per cent to £257.3m in the year to March.
Pre-tax profits at the wine warehouse chain rose 26.6 per cent to £20.3m, beating market expectations.
Majestic opened 12 new shops over the year to take its total to 165 and chief executive Steve Lewis said it was “confident” it could double that figure to a total estate of 330.
Crucial to the sales growth was its decision to halve the 12-bottle minimum purchase for its customers.
“This change proved to be extremely popular with existing customers and has also made Majestic more accessible to new customers,” Lewis said in a statement.
The move raised its customer base to 511,000 people while transaction numbers jumped 12.5 per cent to 2m. Despite the lower six-bottle limit, average spend per transaction fell only 2.5 per cent to £126.
Majestic also saw a boom in wines priced £20 or more per bottle. Sales rose 23.7 per cent and they accounted for six per cent of all store sales. The average price of a bottle also rose to £6.94 from £6.56 in 2010.