Make mine a half: Majestic cuts minimum purchase of wine

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The Independent Online

Majestic Wine, the chain of warehouse outlets, hopes to raise the spirits among its customers by halving their minimum purchase to six bottles per visit.

The move, which was introduced yesterday, follows a successful year-long trial in its Newcastle and Darlington stores, where "customer feetback has been very positive".

The move is designed to bring in more customers, who might have been turned away by the previous 12-bottle limit.

The group said: "Reducing the minimum purchase makes Majestic even more accessible to both current and new customers."

Majestic's six-bottle strategy is aimed at lifting profits in towns and cities, where people are more likely to walk to its stores instead of drive.The 12-bottle minimum will still apply to online orders.

Shares in the company fell 5.7 per cent to 205.5p, although analysts broadly welcomed the move.

Natalia Marisova, an analyst at Investec, said the new minimum would widen the group's appeal at "no detriment" to customers looking to buy 12 bottles or more. "With 49 per cent of Majestic's 400,000-plus active customers visiting only once a year, we believe there is significant scope for increasing the frequency of customer purchases," she said. David Stoddart, at Altium, said the decision would appeal to customers living in smaller properties, although the average profitability of orders could fall.

The change of tack comes three months after Majestic's annual profits more than halved, due to lower sales of champagne to recession-hit firms and a weak pound that has made European wines more expensive to buy.

While like-for-like sales rose 2 per cent in the 10 weeks to the beginning of June, the group's prospects hinge on this year's festive period.

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