City support for Majestic remains strong, says boss

26 June, 2013

Steve Lewis

Support for Majestic’s model among City investors remains as strong as ever despite it posting a moderate profit rise dampened by it’s decision to stop supplying wholesale businesses, according to its chief executive. 

Pre-tax profits for the year to April 1 reached £23.7 million, up £500,000, on total sales down 2.1% to £274.4 million due to a planned exit from trading with wholesalers, said Steve Lewis.  The move was driven by low returns and a desire to step up its more lucrative business arm which offers direct sales to restaurants and hotels. 

He said: “The results have been well-received by the City. We are a rare thing because we are a retail growth story with a long-term roll out plan that will last at least eight years. We currently have 193 stores with a total target of 330. We wanted to get out of wholesale, which we have now done because it was a large volume, low value business. But sales to managed accounts such a restaurants, hotels and gastro pubs are up 14% to £31 million. This is a big growth opportunity for us.”

The retailer delivered on its target to open 16 stores in the last year with Havant the next town to see a Majestic opening. 

In-store sales increased 1% with the average price of a bottle reaching £7.56 from £7.34, while the average basket spend remained at £128 per visit. Online saw a 15% surge, now accounting for 11% of Majestic’s total sales. Fine wines, which it defines as still wine above £20, also grew 10%. 

Lewis said the retailer remained focused on managing margin and cost and would not be drawn into deep discounting. 

He added: “We aren’t prepared to throw away margin and get into a race to the bottom. We are not going to give wine away. We control costs very well and are a quality operator. Trading will be the same as it was last year and consumers are increasingly savvy. But they understand quality.”




Bookmark this


Site Search

COMMENT

Lifting the spirits

I were to sum up alcohol sales over Christmas 2017 in one word, it would be “gin”. At Nielsen, we define the Christmas period as the 12 weeks to December 30 and in that time gin sales were £199.4 million, which means they increased by £55.4 million compared with Christmas 2016. There’s no sign the bubble is about to burst either. Growth at Christmas 2016 was £22.4 million, so gin has increased its value growth nearly two-and-a-half times in a year. The spirit added more value to
total a

Click for more »
Upcoming events

Polls

Is blended Scotch overshadowed by single malt in retailers?

  • Yes
  • No
  • Don't know

Facebook

Twitter