Champagne sales give Majestic a Christmas fizz

A national thirst for fine wines and vintage champagne helped Majestic Wine to shake off the shock threat posed by Threshers' 40 per cent off voucher in the run-up to Christmas.

The wine warehouse retailer, which sells bottles by the caseload, yesterday posted a 4.4 per cent jump in underlying sales during its nine weeks of festive trading to 1 January. That continued the trend set during the first half of its year.

Tim How, the chief executive, said the chain's push into fine wines, specifically Bordeaux and Burgundy, had lifted sales and average prices. "Most of the growth was driven by selling more expensive wines and more champagne. We're driving for a greater share of that market," he said.

Sales of Bordeaux grew 10 per cent faster than the rest of the business, while sales of champagne shot up 17 per cent, helped by a number of half-price promotions. That was twice the 8 per cent total sales growth reported by the business during the period. Bottles of Duval-Leroy vintage 2002 were on offer at £14.99. Gran Reserva Riojas also sold well, Mr How added.

Although Majestic's underlying sales were in line with expectations, Mr How admitted that Threshers' sudden promotion, which spread like wildfire on the internet, "must have" affected its performance. The lure of 40 per cent off their purchases was inevitably a test too far of their loyalty for some shoppers.

Mr How said the group's gross margins were in line with expectations because its own promotions were priced into its forecasts.

"That is encouraging, particularly in light of the Threshers' discounting campaign," analysts at Dresdner Kleinwort said.

Elsewhere, a picture began to emerge of just how strong a Christmas it had been for internet retailers. The AIM-listed EBTM, which sells music-inspired clothing, celebrated its first Christmas as a quoted company by announcing it had beaten its own sales target by more than £350,000, representing a 275 per cent year-on-year jump.

IMRG, the internet retail body, has revealed that online shops took £7.5bn in the 10 weeks to 24 December - 50 per cent more than the previous year. Electrical sales were up 95 per cent.

John Lewis provided further evidence of bumper post-Christmas sales. The department store group said it took £77m from 27 December to 2 January, up 8.2 per cent on last year.

It took £18.3m on the first day of its clearance sale, 10 per cent more than last year, setting another record. Buyers mopped up bargains across departments, Gareth Thomas, the retail operations' director, said.