2020 is the ‘toughest Christmas to predict’, Majestic boss warnsBy Arabella Mileham
Retailers and suppliers in the industry may be facing one of the most difficult Christmases they have ever seen, a boss of specialist drinks retailer Majestic has said.
Speaking to the drinks business last week, Majestic’s chief commercial office Rob Cooke said the retailer has forecast a series of scenarios for how the Christmas period was likely to play out as part of its festive planning.
“Trying to gauge with any degree of certainly how customers will act over the next few months is very difficult and certainly it’s the most difficult Christmas to predict since I’ve been in retail,” Cooke said.
“There are lots of different scenarios and we’ve got lots of playbooks and scenarios for those activities, but the key for me is being agile and playing the cards you get dealt. As a business we’ve done that pretty well over the last few months, which is why we’ve survived and thrived.”
He added that there was an “equally big challenge” of how to brand for 2021, as the current outlook remained uncertain,
“How much is this the new base, how much is temporary, how much is the new normal, and what will the situation we’ll find ourselves with post-Brexit? I think there’s still a lot of fairly open, broad questions the industry will have to face and wrestle with for a while yet.”
Strong online sales but footfall returns
Cooke said the specialist drinks retailer was still seeing strong online sales following its record-busting online sales during the Covid-19 pandemic, although it had calmed from the“wild demand” of the early stages of lockdown. Following the reopening of stores at the end May, Cooke said he had been encouraged by the return of shoppers to the retailer’s bricks and mortar stores.
“We’re seeing a positive return to standard store selling and very encouragingly a lot of the new customers we picked up online during lockdown have started to go and see what the store experience is like as well,” Cooke told db.
Majestic reported online sales of booze spiking at around 300% during April, May and June and although growth had “softened” since the, with stores reopening, ecommerce was still showing substantial three figure growth.
“Since we managed to reopen stores, in the last four or five weeks, we’ve seen a shift back to brick and mortar retailing and for us that’s really important.” he explained. “I wouldn’t say online has ‘dropped off’ materially, but as the other channels have opened, it has softened, although we’re still in very positive growth.”
From a topline perspective, the number of bottles the retailer sold and the cash value of those sales was positive, offsetting the substantial drop off in commercial and largely zero sales in the French business – however as Cooke pointed out, a recent trading statement showed that not all the extra sales “dropped neatly through the P&L and turned into profit”.
“Clearly when you move to a delivered model rather than a walk in, customer model,that comes with costs.”
However since the off-trade has reopened, Cooke said there were “encouraging” green shoots in the regional off-trade, particularly from larger country pubs with outside space.
“To be honest it’s coming back quicker than I thought it would but it is very regionally varied, and as is reported in most place there is a very substantial drag in London compared to the rest of the country, especially in central London.”
This, he said, was inevitable, while office-workers in the city remained working at home.
“It it’s difficult to see how they will pick up substantially until working patterns return to normal,” he said.
Last month the retailer unveiled its plans to win back customers and refresh its range and website.