COMMENT: Majestic Wine brings festive cheer
Wine warehouse company Majestic had a very successful Christmas season as more and more consumers adopted its approach of bulk buying quality wine. Its solid performance was attributable to both higher spending from existing customers and a growing customer base, leaving the company in a strong position for future growth.
The festive season has been a particularly good one for the warehouse chain, which saw a 7.4% rise in like for like sales on the past year. The company, which imposes a 12-bottle minimum on all customers, said that French, New Zealand and Chilean wines were the strongest sellers.
Majestic Wines has set itself up to be clearly distinct from high street retailers such as Oddbins or Threshers. One major point of difference is that they are not 'high street' retailers at all: the company selects locations on main roads, preferably close to out-of-town supermarkets. Access and parking for cars are a must, as Majestic encourages bulk buying and tries to create a low frequency, high value customer base.
Majestic is targeting a very different kind of wine consumer than those who pop in to Threshers for a "£4.99 bottle of red". Customers are encouraged to learn about and appreciate wines - the product, rather than the brand or the marketing, is the hero. As a result, customer service is vital for the success of the stores and the company invests a lot of time in training its staff to professional standards. These staff can then become ambassadors for fine wine - the company now has a fine wine center in London offering wines with a value up to £700.
However, the company is not just focusing on upgrading the spending of its existing affluent customers. Expanding the customer base to include more mainstream consumers is a stated goal and its customer base is certainly growing. Figures for this year show that the number of customers who bought at least a case in the past 12 months has increased by 10% to 320,000 customers.
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