Majestic could scrap six-bottle minimum
UK retailer Majestic Wine is considering scrapping the minimum purchase rule in its stores in a bid to improve its performance after revealing plummeting profits.
The company’s CEO Rowan Gormley hinted that Majestic’s warehouse-style layout and six-bottle minimum purchase rule discouraged customers.
Taking over in April, Gormley faced his first annual report yesterday – a particularly difficult one as the company announced a 22.5% drop in pre-tax profits.
The company attributed the figures to a number of “exceptional, one-off costs” related to its purchase of online retailer Naked Wines last month, as well as a “challenging backdrop of a fiercely competitive environment”.
Speaking to press yesterday, Gormley said that minimum purchasing rules and confusion caused by store layout was driving away new customers.
“What customers are saying is they find the warehouse format, the six-bottle minimum and the discount pricing structure difficult and intimidating. The six-bottle minimum comes up again and again so it’s something we will have to test,” The Guardian reports Gormley saying.
Furthermore, Majestic’s warehouse format has led some potential customers to “walk into the store walk out again” because they think it is a wholesale shop, he said.
Gormley also revealed serious issues over the company’s computer system. He said it is 10 years out of date and is in need of replacement, especially considering the company’s online push after its Naked Wines acquisition.
Gormley said it would take three years to revive Majestic; two for its computer system and another to introduce changes across its branches.