Majestic to ‘consider pricing’ in New Year

Majestic has refused to rule out price increases in the New Year in the wake of falling sterling and currency fluctuation.

Majestic Retail md John Colley

Speaking to db following the publication of its half year results this morning, Majestic Retail md John Colley echoed CEO Rowan Gormley’s comments in the Autumn that the company had been well-hedged against the year’s economic uncertainties, but added that it was likely to review the situation after the Christmas trading period.

Majestic’s online business Naked Wines already put up the price of some of its wines by 5% following Gormley’s announcement in September due to the falling value of the pound and Colley was unable to rule out price rises in the future.

“When you’ve got currency at the position it is at and another potential duty rise, which is also a little concerning, we have to look at all of those things in the round. But at the moment we’re in a good position. The hedge will certainly get us through the period we’re in at the moment, but we will have to take stock in the the New Year as we’re looking forward at our future buys,” he told db.

“We have no idea what will happen to currency after Christmas and we will take stock of the situation then and see what we need to do.”

“We can’t say whether they will or they won’t, our real focus is keeping our prices where they are, trading through the peak in what will be undoubtedly a competitive market, and then in the New Year, looking at the situation.”

Speaking about the reaction to the Naked Wines price increase, chief financial officer James Crawford said the move had been well-received and consumers had not been surprised given the economic situation in the UK. He confirmed there had been no blow-back on social media or “incremental attrition” from its Naked Angels following the September announcement, adding that it was important to note that a large proportion of the price rise had come on the back of an increase in the duty six months earlier that had not been passed onto its customers at the time.

Building on positive results

The specialist wine retailer this morning reported solid sales growth in the first half of the year, arguing that it was on the ‘tipping point’ of transforming its £4.4 million loss back into profit.

Speaking to db, Colley said the positive results had been on the back of the growth of its consumer-based, with key KPIs such as availability, new customers, customer and staff retention and five star ratings showing “positive movement upwards”, although there was more to do in driving these harder.

“From a retail point-of-view it has been a strong first half with like-for-likes up 5.7% so I’m pretty happy with that,” he said. “Christmas is a key time for the industry and we’re better planned and in a better position than we were before, so I’m hopeful we can continue to grow.”

He pointed in particular to the boom in Majestic’s crafts spirits range, which had grown 144% at retail during the first half as well as the ongoing success of its Definition wine range, which has continued to see growth having surpassed the £7 million mark this year. The range is set to expand from just wine, with the imminent introduction of a Definition gin before Christmas.

The retailer is also rolling out a new exclusive own label fine wine range under the Lay & Wheeler branding as part of its concentration on fine wines and parcels, which go on shelf before Christmas and is in the testing phase of a new Majestic Wine Concierge subscription package. This will be fulfilled using the new national fulfillment centre in Greenford, which opened at the end of October and is set to fulfill around 40% of the retailer‘s online orders.

Colley added that the team is set to start pushing its new online capabilities to its customers, promoting the new online named and next day delivery service online.

“Until now, you only found named delivery option when you got to the check out, but from today we will be pushing it,” he said.