Majestic toasts millennium boom

MAJESTIC WINE, the AIM listed wine warehouse chain, is expecting this year's millennium celebrations to provide a significant boost to sales, particularly Champagne, and has taken steps to already attain the necessary stock.

Tim How, chief executive, said Majestic has secured huge amounts of 1990 vintage Champagne - the year wine writers are proclaiming as the one to buy for the millennium. He said Majestic is stocking around 25 per cent more Champagne than it would usually have at prices ranging from pounds 10 to pounds 100. "We are timing our champagne promotion to start in the late summer and will bring that on for a broader range in November. The millennium is certainly going to add some growth to the business."

He was speaking as Majestic reported an 8 per cent increase in pre-tax profit before exceptional items to pounds 3.5m. Like-for-like sales, stripping out new store openings, increased by 2.3 per cent.

John Apthorp, the chairman, said that in the nine weeks to 31 May, like-for-like sales were up by 2.7 per cent on the same period last year.

"In comparison to the previous year it has been a tougher year," he said. Retailing confidence has been worse, he added, with the global economic crisis of last autumn worrying many of its predominantly wealthier client base. "We are a discretionary purchase. Our clients spend an average of pounds 97 a time with us, so we obviously suffer when consumer confidence falls." Poor weather also hampered sales last July and August.

Majestic currently trades from 82 stores with four more openings planned by the autumn. The company sees potential for 150 Majestic stores in the UK expand at the rate of about 10 a year, depending on the availability of sites.

Big-selling wines over the year continued to be from Australia and Chile, while red and white Burgundy, Rhone and Spanish wines had been successful after strong promotions.