Majestic Wine is stepping up the pace of its UK expansion as its profits continue to soar, the wine warehouse group revealed yesterday.
The company will open up to 10 stores in its coming financial year, almost doubling its recent expansion rate of six new outlets a year. The 129-strong group has asked property agents to find sites in 111 towns throughout the UK, from Bangor to Aberdeen.
The spell of warm weather this month and this year's late Easter helped to lift underlying sales growth to 8.6 per cent in the past 11 weeks. Although football fans are more likely to reach for a beer than fumble for a corkscrew, Tim How, the chief executive, said there was scope for Majestic to benefit "particularly if England happen to do well" during the World Cup.
Booming champagne and sparkling wine sales, along with a move to fine wines costing more than £20 a bottle, helped to lift profits before tax, exceptional gain and amortisation by 10 per cent to £14.5m.
The trend to finer wines, which are growing more quickly than any other area of the business, helped to raise the price of an average bottle of wine to £5.59 from £5.51 last year. Fine wines, which will be available in 25 outlets by the end of this year up from 15 last year contribute £4.5m in annual sales, about 3 per cent of Majestic's UK retail turnover excluding value-added tax.
Demand for Spanish wines picked up during the year after a lull in favour of various New World countries, Mr How said. And the revival of rosé is continuing apace, with sales of pink hued wines increasing by 40 per cent last year. The company's internet site also fared well, with the number of orders placed online rising 38 per cent on the previous year.
The one corked spot in Majestic's preliminary figures remained its three French coastal outlets, which are suffering from the death of the cross-Channel day trip. A 7 per cent like-for-like sales decline during the year knocked profits slightly.
But Mr How reiterated his commitment to the three sites, which are branded Wine and Beer World. "They are a very integral part of our business," he said.Reuse content