24% profits rise cheers wine chain

Wine warehouse chain Majestic today hailed the changing tastes of UK wine drinkers as it unveiled a 24% hike in annual profits.

The group said people were continuing to “trade up” to more expensive wines as they held more dinner parties and discovered a wider variety of wines while travelling abroad.

A 50% increase in sales of bottles of still wine costing £20 (€30) or more also reflected Majestic’s strategy to target more affluent customers.

Chief executive Tim How said: “We operate in an expanding market where consumers continue to show a strong interest in a greater choice of better quality wines.”

Wines from Bordeaux, Italy, South Africa, New Zealand, Chile and Argentina sold particularly well, while there was also strong growth in sales of Champagne.

Mr How added that the impending UK smoking ban was likely to help sales if more people entertain at home instead of going out.

Majestic, which has 122 outlets, posted profits of £13.2m (€19.8m) for the year to March 28, in line with analysts’ expectations.

Like-for-like sales, which strip out the impact of store openings and closures, were 8.3% higher during the period. Recent sales were “encouraging”, growing 7% on a like-for-like basis in the first 10 weeks of the new financial year.

Total sales, including the impact of seven new stores at locations such as Inverness and London’s Covent Garden, rose by 9.6% to £162.5m (€243.2m).