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Majestic Retail has "biggest ever Christmas" during bumper trading period

Published:  10 January, 2017

Sales of sparkling and gin helped to put a skip back into Majestic's step over the Christmas period with total group sales up 15.3% compared to the previous year.

For the 10 weeks to January 2, the group is reporting its "biggest ever Christmas" in its retail channel, with like for like sales up 7.5%, (+6.2% without adjustment.) 

Sparkling wine helped to deliver this much-needed boost, with Majestic's sparkling sales up 12% compared to a 3% increase in Champagne.

Prosecco outsold French fizz at Naked Wines, where the company sold three bottles of Prosecco for every bottle of Champagne.

The growing spirits category now accounts door 5% of Majestic's total sales and gin in particular soared over Christmas.

Total sales were up 55%, with Warner Edwards Rhubarb Gin seeing a huge increase 1000% while Sipsmith Sloe Gin nearly doubled in sales. 

According to Majestic, all areas of the business saw YOY growth with the exception of Majestic's commercial arm - although chief executive Rowan Gormley said the channel continues to trade in line with expectations.

"Delivering strong like for likes in a tough market is a tribute to the hard work that our people put in - right across the business. It is also particularly pleasing that both Naked Wines and Majestic Commercial traded in line with expectations and Lay & Wheeler has maintained its strong growth."

The boost comes after a difficult year for Majestic.

Shares of Britain's largest specialist wine retailer plummeted in September following an announcement that the company expected to fall below expectations in 2017.

There was some recovery in November, with underlying sales growing by 10% for the first half of the fiscal year - although profits were way down.

At the time, the company said it was at a "tipping point" in its journey to return to reliable growth.

In Majestic's Christmas trading statement released today, Gormley re-iterated that the group is still on track to hit its £500m sales objective by 2019, as part of a three-year transformational plan.

He added: "We said that we would be better prepared for Christmas than ever - and the numbers show that we did what we said we would do.

"At this stage we are not predicting a change to long term margin expectations, but we need to retain flexibility to compete in a competitive market."

Majestic takes around 30% of its total annual sales during the Christmas trading period. 

The group's gross margin percentage was around 1 percentage point lower during the 2016 Christmas period, versus the same period in the prior year, due to a combination of accelerated acquisition of new customers and the need to remain competitive in a heavily discounted UK market still coming to terms with recent currency movements, the company said.