Majestic feels the heat over Christmas

Majestic Wine’s margins took a hit over Christmas as the retailer embarked on an aggressive promotional push to keep pace with supermarket rivals.

Although the group reported that like-for-like sales across its 211 UK stores rose 1.1% between 28 October and 5 January, its share price plummeted by over 13% as analysts downgraded their 2015 profit forecasts.

In a statement, Majestic described the Christmas period as “particularly challenging” as it confirmed: “the company invested 50 basis points of gross margin ensuring pricing remained competitive in this more promotional environment.”

Majestic CEO Steve Lewis said that the business was “now focused on delivering our final quarter’s trading,” adding: “We anticipate this competitive pricing environment will continue throughout much of 2015.”

This latest performance follows Majestic’s 10.5% dip in pre-tax profits for the first six months of its 2014/15 year, which the retailer attributed largely to the cost of moving to its new warehouse.