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A combination of the “year of gin” and soaring sparkling wine sales have helped Majestic Wine celebrate its best Christmas to date. For a business that draws nearly a third of annual sales in the Christmas period, a strong festive season is critical. The boost is welcome news for the retailer, which issued a profit warning in September following a failed US marketing campaign and poor business customer performance.
Majestic’s gin sales rose 55% on last year, with upmarket brands such as Warner Edwards rhubarb gin and Sipsmith sloe gin performing particularly well. 2016 saw national gin sales break the £1bn mark for the first time. Sparkling wine sales rose 12%; prosecco sales increased three times faster than champagne.
Majestic, which acquired online retailer Naked Wines in 2015, reported sales at established Majestic Wine stores being up 7.5% in the 10 weeks to 2 January. With a sales increase of nearly 30% at Naked and 62.3% at fine wine specialist Lay & Wheeler, the overall group’s sales rose 12.4%.
This year’s performance can partly be attributed to a 1% cut in gross profit margins against last year, as the company moved to compete more effectively with the UK’s heavily discounted market. Aldi and Lidl have both made heavy gains in alcohol retail recently. Value-for-money drinks offers, voucher marketing and free standard delivery for just six bottles has proven successful for Majestic. The retailer’s three-year transformation plan has also helped it stay on track to generate £500m in annual sales by 2019.
Part of Majestic’s transformation programme is a complete re-focus on customer service and shopper loyalty. Earlier this month, Majestic appointed a new chief customer officer as Joshua Lincoln moved across from Naked Wines. Improved availability, enhancing the range, putting more staff on the shop floor and rolling out next-day home delivery will play a part in this refreshed customer strategy.
Looking at 2017, Majestic predicts Portuguese wines will be ‘the next British favourite’, after sales rose 160% over Christmas, overtaking Rioja as the retailer’s best-selling red wine.
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