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Majestic Wine profits rise as competition wanes

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Majestic Wine saw UK like-for-like retail sales grow by 7.6 per cent in the 26 weeks to September 27th as it benefited from a lack of competition on the high street.

The warehouse wine chain also saw profits rise by 20 per cent to £7.3 million, total sales rise to £117.6 million and active customer numbers jump 14 per cent to 496,000.

Online sales have increased too and now represent 9.1 per cent of overall trading in the UK.

Sales at Majestic have risen as companies such as Threshers have disappeared from the marketplace.

Indeed, KPMG said last week that in the year since Threshers’ owner First Quench Retailing (FQR) went into administration, fewer than one-third of its 1,400 stores have reopened as off-licences.

FQR, which had to release 6,300 jobs when it went bust, also owned Wine Rack, Victoria Wine, Bottoms Up and Haddows.

Steve Lewis, CEO of Majestic, told Radio 4’s Today programme that the business’s success in recent weeks was down to a combination of a reduction in competition and the move to cut the minimum order from 12 bottles to six last September.

In a separate statement, he said: “I am delighted that Majestic has achieved profit growth of 20 per cent in the half year and I am very encouraged that we have been able to attract so many new customers.”

Investec Securities retail analysts David Jeary and Katharine Wynne added: “Majestic’s move to the six-bottle minimum appears to have added another gear to what was already a well-honed and finely-tuned customer orientated business.

“It has also upped its game in the online space, which should underpin its core offer and broaden its customer base.”

Published on Monday 15 November by Editorial Assistant

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