Comment - Majestic Wine lightens First Quench gloom
As administrators plough through offers for collapsed First Quench Retailing, a sales rise from Majestic Wine today (16 November) proves that there is life yet in independent and specialist wine retail.
Majestic today reported like-for-like sales up 5% and pre-tax profits up 9% for the six months to 28 September - not bad considering the country has spent the last year in recession.
Its results come in stark contrast to the performance of First Quench Retailing, owner of Threshers off-licences and which, following its collapse last month, faces seeing a healthy proportion of its stores converted into Greggs bakery outlets.
First Quench is not the only off-licence group to have had it tough. Rival Oddbins has also struggled and the sector has been somewhat under siege from the big supermarket chains, which are hoovering up an ever greater share of UK wine sales in the off-trade.
But, Majestic shows there is a pulse in the independent wine retail setup. What it also shows, perhaps, is that this setup needs to evolve if it is to cope with growing competition in the marketplace.
Majestic's business model is different from the standard off-licence setup. Majestic operates out of warehouse outlets that sell wine by the case, rather than acting as a local convenience store for consumers' wine needs.
While the group has cut its minimum purchase from 12 bottles to six this year, this model has helped the group to survive. It requires a longer term commitment from consumers and so far this has paid off.
Majestic has also worked hard to push online sales - which grew 24% in the last six months to constitute nearly a tenth of the group's UK retail sales.
The message is that independent and specialist retailers can survive, but they must evolve.
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