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Majestic ‘very confident’ of its growth plan
Majestic’s COO Rob Cooke says he remains “very confident” in the specialist retailer’s growth plans, despite the tough trading environment of the UK retail market.
Speaking to the drinks business at Majestic’s recent tasting, chief operating offer Rob Cooke said that while it was difficult to predict what would happen due to the volatility of the world, he remained very confident in the route the retailer was travelling in.
Last month saw the retailer open its 205th store in Newark-on-Trent, following the opening of seven new stores since the start of the 2022 financial year – including Chippenham today. Further stores in Crouch End and Monmouth are set to open before Christmas.
“We’re confident in the store opening programme, we’re confident in our on-trade business and I’m probably more confident than ever that, in a time when customers are really looking to maximise the value they get from the spend, our ability to have those quality conversations in the ‘try before you buy’ tasting counter is going to be more important than ever,” he told db.
“It’s tough, but we’re pretty confident that we’re in pretty good shape.”
Cost-of-living
He noted that the reaction to the cost-of-living crisis had played out “as expected”, with some changes to consumer behaviour, notably smaller baskets but higher frequency as consumers manage their spending.
“We’re not seeing too much trade down, but what we are seeing is just a slightly smaller basket – so the number of bottles per transaction – and more transactions as people are trying to manage their cash,” he explained.
People are also more willing to move outside traditional regions to manage their spend, with the in-store tasting counters helping give customer the confidence to do so.
“We’re definitely seeing more experimentation, and some faster growth and higher customer adoption in some of the lesser regions as people search out value, which I think for us plays into our proposition, [our] breadth of our range, our expertise in store and tasting counters,” he said.
The duty rise, however, has yet to fully hit the market, Cooke argued – and the effects were unlikely to be seen for quite some time.
“There’s clearly been an uptick in average selling price of still wine post the duty change, [but] people [retailers] change price at different times and different promotional plans and inevitably a bit of duty pulls forward on the buying cycles,” he explained. “Customers tend to react in quite an extreme way to significant price changes to start with, but that normalises over a period of time, so I’m not sure we’re going to get a handle on the exact implications until the middle of next year.”
In terms of expectations for Christmas, Majestic is confident that customers will still celebrate special occasions, but be savvy with their money and look around for deals.
“I’m not sure they will necessarily spend less but I think we might say a little bit less of the mainstream varietals and the mainstream regions as people start to branch out looking for value for the bulk and volume purchases,” he said.
The retailer has added around 68 new lines for autumn and Christmas, including expanding the ‘Chosen by Majestic’ own-label range, which launched in the summer and now numbers 18 products, and boosting its fine wine selection.
On-trade and Uber Eats
Meanwhile, Majestic’s on-trade arm has been doing “phenomenally well”, Cooke noted. Following the easing of pandemic restrictions, the retailer made a conscious effort to target more prestigious on-trade accounts.
“I don’t think we are necessarily seeing people cut back too much on the on-trade, I think it’s a similar situation to retail so when people are out, they are making the most of that experience,. They’re just going out a little bit less often, so frequency is probably down a little a bit in the on-trade and average spend and quality of consumption as far as we are concerned from our customers is very consistent.”
Ecommerce has been boosted by Majestic’s new partnership with Uber Eats, which rolled out in August with an initial eight Majestic stores (Birmingham, Brighton, Cambridge, Clapham, Esher, Notting Hill, St John’s Wood and Westbury-on-Trym) but has since been rolled out to a total of 177 stores. The tie-in sees the retailer permanently feature at the top of the alcohol section of the Uber Eats app.
The move was designed to build on the online growth it has seen experienced since the Covid-19 pandemic, and capitalise on the growing shift from its customers towards seeking local delivery solutions, it said at the time.
“Our on-demand business obviously peaked through COVID, and like a lot of people in our sector I think the market has been more stable,” Cooke explained. “But we all now the headline alcohol partner for Uber Eats wherever we’ve got a store in their catchment [area], so that just gives us an awful lot more visibility through the platform.”
The mix of products going sold via Uber-Eats has also been “significantly” more premium than expected, he added, especially in London. “We’ve had weeks for example, where our best-selling product in cash terms on Uber Eats has been Dom Perignon, which we wouldn’t have predicted in the past.”
“We’re very comfortable with where that’s going, [we’ve] lots of things in the pipeline to try and continue to enhance that,” he said.