Craft beer and spirits fuel Majestic growth
Rather than fine wine, craft beers and spirits are driving growth at Majestic, with sales of small batch beers and spirits up 164% on last year at the UK retailer.
“Craft beers bridge the gap between wine and beer. People want something specialist so we are moving away from sales of mass-produced beers,” said Majestic’s CEO Steve Lewis.
The retailer’s top seller is Curious Brew made by English wine producer Chapel Down in Kent, while topping spirits sales was Sipsmith gin, which recently relocated its distillery to Chiswick in west London.
On the wine front, Languedoc white Picpoul de Pinet proved the star performer, with sales up 127% on a year ago. Argentinian Malbec also flexed its muscles, with sales up by 41%, while Provençal rosé sales were up 32%.
The average price of a bottle of wine at Majestic has risen to £8.03 up from £7.71 a year ago, leading the average customer spend to rise to £130.
“We can deliver a level of customer service that the supermarkets can’t match – whatever the supermarket,” Lewis said.
Sales at the retailer rose by 2.8% to £133.8 million in the six months to the end of September, while pre-tax profits fell 10.5% to £8.5m due to the cost involved in moving to a new warehouse in Hemel Hempstead.
Majestic came under fire last month after it emerged that it had asked certain suppliers to contribute a 4p per bottle payment towards funding the new warehouse.
The tactic has been branded “incompetent”, “morally repugnant” and “tantamount to blackmail”.
Online sales were on the rise at the retailer, with click and collect sales up 60% on a year ago to £1.7m and web sales now accounting for 11% of the business.
Fine wine has fared less well, with Majestic’s fine wine arm Lay & Wheeler suffering a 78% decline in pre-tax profits to £127,000, with a lack of interest in Bordeaux 2013 blamed on a dip in sales from £1.6m last year to £548,000.
Majestic now has a 4.3% share of the UK wine market.