Majestic Wine's profits increased nearly 15% last year - but sales during the much-anticipated Diamond Jubilee were disappointing, the retailer said.
Diamond Jubilee: ‘sale or returns came back’
Majestic’s profit before tax for the year ending on 2 April 2012 was up 14.5% to £23.2m, compared to £20.3m in 2011, while sales increased 8.9% to £280.3m compared to £257.3m last year.
Results for the current trading period, the ten weeks from 3 April to 11 June 2012, showed like-for-like sales up a disappointing 0.6% compared with the same period last year.
‘The ten days before the Jubilee were very busy,’ Majestic’s chief executive Steve Lewis told Decanter.com, ‘but the moment it finished on the Sunday it went quiet.’
He said the bad weather over the Jubilee weekend put a dampener on celebrations, evidenced by the fact that ‘a lot of sale or returns came back’.
He also said the period was unfairly compared with the the Royal Wedding weekend last year, when fine weather gave an additional boost to sales.
Lewis said he was reluctant to blame the weather but persistant rain and grey skies since March meant ‘sales have been quiet’.
Using rosé sales as a barometer was instructive, he said. ‘Rosé hasn’t started yet, but the moment we have a fine weekend, it will explode.’
In other areas Majestic is bullish. It opened a record 16 stores in the UK last year, bringing the total number of UK stores to 181. ‘We are confident of being able to expand Majestic to 330 locations,’ the company said.
Profits for Majestic’s fine wine arm, Lay & Wheeler, and its three French stores at Calais, Coquelles and Cherbourg, also showed an increase.
Lay & Wheeler profits went up to £1.9m from £0.7m in 2011, and Majestic in France profits showed an increase, from £1.0m to £1.4m.
The average spend per transaction is now £128, up £2 on last year; the average bottle of still wine purchased at Majestic is now £7.34 compared with £6.94 last year.
Majestic’s business-to-business operation also increased, with sales to business customers now represesting 24% of the entire operation
Online sales increased 7.8% on last year and now represent 10% of UK retail sales.
Written by Adam Lechmere