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Majestic results for wine retailer

Majestic Wine Warehouses has released year-end results today that show strong growth in volume and value sales, an increase in average bottle prices and a pledge to open more stores.

Speaking to the drinks business, chief executive Steve Lewis said that Majestic had enjoyed “a hugely successful year” and that the ability to buy six-bottle cases had made the company “much more accessible” resulting in a noticeably wider demographic now using the outlets.

The results show a 3.6% rise in volume sales – up from 3.4% at a time when Nielsen figures show a 3% decrease in volume overall in the UK market and only a 1.6% rise in value.

Average bottle prices have gone up to £6.94, above the national average of £4.60. The growth has been driven particularly by New World wine sales – New Zealand has seen a 20% increase and Argentine Malbec has also performed strongly.

Lewis said that Majestic now holds 11% of New Zealand’s market share in the UK and the same for Argentine Malbec.

Lewis also reported a 23.7% rise in fine wine sales – those priced £20 and above – not just of Bordeaux and Burgundy but also Spanish and Italian. Majestic’s sales to the on-trade have also increased by 17%.

There are also plans to open a further 12 new stores this year, following 12 that were opened in 2010. Lewis said that research shows that the company could comfortably grow the chain from 250 stores to 330 over the next few years.

“We have 10 years of growth potential ahead of us,” he said.

It is interesting to note therefore that the company has taken a 15-year lease on a former Ford dealership site in Evesham.

Ben Briant, senior surveyor of Colliers International’s automotive and roadside team in Birmingham, said: "Majestic Wine is continuing its growth and looking for good roadside property.

“The former dealership is an ideal building, given its prominent location, and I’m sure they will trade very well on the site."

Rupert Millar and Lucy Shaw, 13.06.2011

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