Demand for champagne lifted first-half profits at Majestic Wine, Britain's biggest wine warehouse chain, as customers rushed to benefit from cheaper bubbly.
Tim How, the chief executive, said champagne sales in the six months to 1 October rose by 35 per cent helped by a series of promotions. "The champagne houses have all been keen to cut prices because they wanted more volume," he said. A string of recent profit warnings from champagne houses, such as LVMH, have illustrated a need to drive demand, which fell after the millennium celebrations and has suffered further since 11 September. Mr How said deep discounting had allowed Majestic to slash the cost of its house champagne brand by one-third to £9.99.
The company, which yesterday reported a 40 per cent increase in first-half profits to £1.6m on sales up 20 per cent to £44.4m, said sales of Spanish Rioja and French wines from the Loire and Beaujolais regions were particularly strong.
Majestic is in the process of rebranding four wine warehouses near Calais after buying a small French chain last month for £7.25m. The company hopes brand familiarity will attract British visitors looking to buy cheaper wines. Its shares gained 8 per cent to 357.5p yesterday.