Majestic Wine has reported a sales rise in the key Christmas period, but sales grew at a slower pace than last year in another sign of intense competition from own-label brands at supermarkets and discounters, including Aldi and Lidl, as well as pressure on household budgets.
Majestic Wine said today (9 January) that sales rose by 3.2% in the 10 weeks to 1 January versus the same period of last year.
Gross profit margin remained flat versus the previous year.
The wine retailer’s share price initially dipped on the London stock exchange, suggesting some investors were underwhelmed by the figures. Majestic reported its ‘biggest ever’ Christmas sales in 2016.
But, Majestic’s CEO, Rowan Gormley, said that the team had ‘performed brilliantly’ during the period in order to maintain profit margins and grow sales in a tough environment.
He added that Majestic, which records 30% of its annual sales during the Christmas season, remained on-track to meet full-year expectations.
Retail sales figures for the Christmas period have only just begun to filter out in the UK.
Premium wines sold under supermarket own-label brands appeared to have done well.
It was a record Christmas at the tills for the grocery market, according to Kantar Worldpanel data covering the 12 weeks to 1 January.
It said, ‘Thanks to continued investment in premium own label brands across the major retailers in 2016, such products finished the year with record 12 week sales of almost one billion pounds.
‘Top tier lines including own label fresh and smoked fish, cooked meats such as ham, and wine performed particularly well.’
Discount stores Aldi and Lidl continued to put pressure on traditional retailers in both food and wine.
Aldi said last week that it sold 6.8 million bottles of wine in December 2017, helping the group to its biggest Christmas sales so far in the UK. It plans to expand from its current 762 stores to 1000 stores in the UK by 2022.