Majestics business model paying dividends

Majestic's business model paying dividends

Majestic Wine has proved that life exists in the UK's wine retail sector beyond the walls of the big supermarkets.

Last year's demise of First Quench Retailing, the owner of well-known wine stores Thresher's, gave a jolt to the independent wine trade. If a name like that is not safe, then who is?

Many wine retailers have had their ups and downs over the past decade, including Thresher's and rival Oddbins, but the loss of First Quench was taken as an ominous sign for some in the trade.

Majestic today proved this all wrong by reporting strong rises in both sales and profits for the last fiscal year. Sure, the group has taken part in price promotions and has been forced to reduce its minimum purchase amount from 12 bottles to six. But, crucially, the money is still coming in.

The group's structure is something that should be studied closely by anyone in the independent wine sector.

The firm sells wine by the case, rather than acting as a local convenience store for consumers' wine needs - an area of the market that multiple grocers have largely sewn up.

Majestic has also shown itself flexible to consumer purchasing habits.

As well as lowering the minimum purchase amount, the firm has aggressively pushed online wine sales. So successful has this been that one in ten bottles sold by the group was done via the internet in the year to the end of March.

Online wine sales rose by nearly a fifth for the year.

Majestic has offered hope to an independent wine trade that has a vital role to play in engaging and serving UK consumers with interesting, quality products.