Majestic Wine’s sales fizzed over Christmas as customers embraced the trend for craft beer and artisan gin at Britain’s biggest wine merchant.
Retail sales for the 10 weeks to 4 January at shops open a year or more were up more than 7% and total sales across the business rose 12%, Majestic said in a trading update.
Sales of Curious Brew lager, Punk IPA and other niche beers increased by more than half while sales of craft gins such as Bathtub and Sipsmith London Dry jumped 144%.
Majestic’s retail business, which accounts for three-quarters of profit, also more than doubled sales of Provence rosé as warmer weather changed tastes in wine.
The figures mark a rapid improvement for Majestic, whose sales fell during the crucial Christmas period a year ago. The chain responded by buying fast-growing online merchant Naked Wines and installing NW’s founder, Rowan Gormley, as chief executive.
Gormley, who took over in April, has scrapped Majestic’s complex price offers and broken with its warehouse roots by allowing customers to buy a single bottle of wine rather than a minimum of six. He is also revamping stores and overhauling computer systems to give staff more information on customer tastes.
Like last year, Majestic was up against fierce competition from supermarkets using wine offers to lure Christmas shoppers. Gormley said it was too early to say the improved performance was a trend but that Majestic had made a good start. It makes almost a third of its sales over the Christmas period.
Gormley said: “This is an encouraging result. I am particularly heartened to see the Majestic retail business grow as the impact of our better pricing, better service and better-looking stores start to take effect. However, there is still much to do.
“I take my hat off to the 1,000-plus people we have, from Aberdeen to Sydney, who worked flat out during the festive season and deserve a large glass of wine.”
Costs rose and margins narrowed slightly over the Christmas period as a result of his changes, Gormley said. He has indicated his plans will take three years for full effect.
The company’s shares rose as much as 10% and were up 8.6% to 355p in early afternoon trading.
Sales at Naked Wines, which asks its members to crowdfund small winemakers, rose 29% and Majestic’s sales to businesses such as restaurants and bars increased 10%. Naked sold 27,000 bottles of its first artisan gin in a week when it went on sale at the end of November.
Alistair Davies, an analyst at the stockbroker Investec, wrote in a note: “A pleasing retail trading performance is likely to build confidence that Majestic can deliver a sustainable recovery. Attractive growth opportunities are available to the group through commercial and Naked Wines, which represent the longer-term investment story.”
