Online retailer Virgin Wines has signalled an increase in active customers and a stronger customer acquisition rate than expected, despite an overall decrease in group revenue.
As part of its full-year results to July 1, 2022, Virgin said overall group revenue declined to £69.2 million compared to £73.6 million in FY21. However, revenue remained 63% above 2019 levels, with profit before tax (£5.1 million) also seeing a rise compared to 2021 (£1.7 million).
As the retailer seeks to maintain customer loyalty, the results showed that 105k new customers were acquired in FY22, 5% ahead of expectations. Its active customer base grew to 186k, compared to 182k in FY21, with its Wine Bank membership up 8% and total revenue from Wine Bank customers up 21%. It reported a 53% conversion rate of new customers onto subscription schemes.
Elsewhere, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined by £0.8 m from FY21 to FY22, but remained 136% higher compared to FY19.
Jay Wright, Virgin Wines chief executive, said the retailer remains “confident” despite the reported drop in revenue, adding: “Our business model and disciplined approach to new customer acquisitions has enabled us to retain much of the substantial growth achieved during the Covid-19 lockdowns, with almost one million cases sold in FY22.”
Wright also suggested that the cost-of-living crisis will benefit the off-trade: “We believe that our wines represent an affordable treat compared to the cost of alternative options such as going to pubs and restaurants, and therefore we may see more people opting to socialise and drink wine at home in the coming months.”