Majestic Wine has continued to reap benefits from relaxing its minimum order rule, with profits up strongly in the first half of the UK retailer’s fiscal year.
Majestic’s net profits increased by 18% to GBP5.1m (US$8.2m) for the six months to 28 September, the retailer said yesterday (15 November). Sales rose by 10% on the same period of the previous year, to GBP117.6m, boosted by the group’s decision in September 2009 to reduce its minimum order rule from 12 bottles to six.
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“We have seen a substantial increase in the number of customers on our database who have shopped in the past year, up 14% to 496,000,” said Majestic’s chairman, Phil Wrigley. “The change to a six bottle minimum purchase has been extremely popular with existing customers and has also made Majestic more accessible to new customers,” he said.
Wrigley said that the number of transations rose by by 19% during the half-year. He added that the firm is pleased that average spend per transaction has only fallen by 7%, to GBP122, since the minimum purchase change.
Classic French wines from Bordeaux, Burgundy, the Loire Valley and Rhone returned to growth during the half-year, with Champagne and sparkling wine sales also up. Sales of wine worth more than GBP20 per bottle rose by 20%, while online sales also rose by 8% in value.
Majestic’s fine wine subsidiary, Lay & Wheeler, returned to profits for the six-month period, earning GBP77,000 versus losses of GBP145,000 a year earlier. Its Wine and Beer World stores in Calais, northern France, reported a three-fold rise in profits, to GBP574,000.
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