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Wine merchant Majestic toasts 'good progress'
11:21am Monday 17th June 2013 in Business News
Wine merchant Majestic posted a small rise in profits today after a year in which it said sales of English sparkling wine showed a significant increase.
The retailer, which has plans to grow its 193-strong store estate to around 330 locations in the UK, posted pre-tax profits of £23.7 million for the year to April 1, an increase of £500,000 on a year earlier.
Sales of still wines from the Rhone, Argentina, Italy and Spain showed good growth, while Majestic also reported a big jump in sales of sparkling wine from English vineyards.
Total sales were down 2.1% to £274.4 million in the year, reflecting a cut in its exposure to the wholesale drinks market and last summer's unseasonable weather, which caused the cancellation of a large number of outdoor events.
The number of customers who made purchases in the year still rose by 56,000 on a year earlier to 624,000, while the average spend per transaction remained level at £128. The average bottle price on still wine rose to £7.56.
Chief executive Steve Lewis said: "Majestic is in excellent shape and has made good progress with the four key elements of our future growth strategy - new stores, business customers, ecommerce and fine wine."
New stores were opened during the year in Northallerton, Esher, Queensferry Road in Edinburgh, Witney, Basingstoke, Falmouth, Stroud, Ludlow, Uttoxeter, Alton, Sudbury, King's Lynn, Lymington, Dorking, Crawley and Gerrards Cross.
Page 2: 10:57 English sparkling wines received a surge in popularity as a result of national pride surrounding celebrations such as the Royal Wedding, the Diamond Jubilee and the Olympics.
One of Majestic's leading English tipples, Chapel Down from Kent, was served up to guests at the Royal Wedding in 2011. Since then home-grown wines such as the retailer's best English seller Nyetimber Classic Cuvee, which costs just under £30, have been coming to the fore.
Mr Lewis said the success was not just down to national pride, however, as English sparkling wines can now rival its international competitors on taste too.
But despite this rapid success, Majestic expects England's share of the global wine market will remain relatively small and niche, with Sauvignon Blanc from New Zealand currently generating most, or 11%, of its total sales.
Mr Lewis also shrugged off suggestions that bad weather could put another dampener on outdoor parties this year.
After many events across the UK were cancelled due to last year's poor weather, he said there was a "pent up need for barbecues", which should boost Majestic's sales this summer.
"We only need a bit of sun," he said.
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