Majestic Wine profits flat in 'difficult year' as investment planned

By Gemma McKenna

Published: 16 June, 2014

Majestic Wine has reported a small dip in like-for-like sales, down 0.1%, but fine wine sales have rocketed by a fifth while Provence rosé is up 84%.

At the end of March the group, which runs 206 stores throughout the UK, issued a profit warning, saying profits would remain at similar level to 2013 thanks to "challenging conditions" since the start of 2014.

Full year results show profits up by just £100,000 to £23.8 million, while the high street retailer reports total sales up 1.4% to £278.2 million, with market share up 0.1% to 4.2%.

Majestic customers are paying £129 on average per transaction, £1 more than the previous year, while the average bottle price is up 38p on 2013 to £7.94. It has also grown its customer base by 2.9% to 643,000.

Fine wine sales - categorised as wine over £20 - rocketed by 19.7% to £18.7 million.

Some other highlights from this year's report were a significant increase in sales of Provence rose which grew 84% - Majestic now holds 47% of market share - while Malbec from Argentina, Chile and France grew by 50%.

Majestic Wine chief executive Steve Lewis has reported a small dip in like-for-like sales, down 0.1%, but fine wine sales have rocketed by a fifth while Provence rosé is up 84%.

Online sales increased by 5.8% to £27.7 million, accounting for 11.4% of its UK sales.

Sales to commercial managed accounts grew 20.6% to £37.3 million and the group opened 13 new stores in 2013.

Throughout the year, the group moved its head office in May, and moved to a larger and more modern distribution centre in June. It also launched the third generation of its new website in July 2013, which it said would offer customers greater choice.

Steve Lewis, chief executive, said: "Majestic made good operational progress in the last year and despite the difficult trading environment delivered a solid performance. 2015 will be a year of increased investment for Majestic to ensure that we have the right infrastructure to maximise on our long term opportunities for future growth."

Given the increased investment required in the short term, the company advised back in in March that flatter profit growth would continue into the 2015 financial year.

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