‘Encouraging’ Christmas trading at Majestic

Specialist wine retailer Majestic reported “encouraging” results over the Christmas trading period, with total sales up 42.6%, driven by a strong performance by Naked Wines.

MajesticThe retail business, which makes up the lion’s share of the group’s total sales, reported “heartening” sales, with like-for-like sales up 7.3% – compared to a 1.7% in the previous year.

Around 30% of the company’s total sales come from the ten-week Christmas period, the company said.

Majestic Commercial, which caters for the B2B trade and is set to be a key area of focus, also rose 10.2% over the Christmas period.  However fine wine merchant Lay & Wheeler saw sales fall 3.5%.

CEO Rowan Gormley said it was an encouraging set of results overall and the teams had embraced the changes introduced in November – but added that there was still much to do.

“Majestic Commercial and Naked Wines continued to grow strongly, and I am particularly heartened to see the Majestic Retail business grow as the impact of our better pricing, better service and better looking stores starts to take effect,” he said.

“We are only three months into our three year plan and although this performance is pleasing it is too early to call it a trend.

“We remain focused on our values of looking after our brilliant teams and suppliers and thank them for their support during the initial steps of transforming Majestic into a truly fantastic business.”

Andrew Stevens, senior analyst at Verdict Retail said the positive results showed that Majestic Retail had bounced back thanks to a more “entrepreneurial spirit and investment in the business, which was boosting growth through simplified pricing and improving the customer experience both in store and online.

“With Majestic’s investment focus shifting away from capital expenditure towards operating expenditure, from store openings to investment, the retailer will be more flexible in its decision making,” he said. “This is a positive start for the retailer, which it will have to build on over the next three years with significant investment, though this will result in a more profitable and sustainable business.”

In November, Majestic unveiled a new three-year strategy, targeting sales of £500m afte pre-tax profits dropped 50% in the first six months of the year.

This followed the scrapping of its six bottle minimum , the introduction of a Naked Wines click and collect service in store, and the launch of the retailer’s first own-label range.

Gormley told the drinks business there was an opportunity for Majestic to occupy a “sweet spot” in the market as the multiple retailers faced seismic changes and cited the changes as proof that it was a simple “back to basics” move that was required.

However he blasted the increased commoditization of wine at retail, claiming it was becoming “more like baked beans”.

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