Majestic Wine has grown market share for the first time in 10 years after reducing its minimum order requirement and one of its key competitors exiting the market.
The wine specialist, which this week reported that pre-tax profit increased 20% to £7.3m in the 26 weeks to September 27, grew its share of the total wine market in the year to September 30 from 3.2% in 2009 to 3.5% this year. Majestic’s volumes were up 8.2%, compared with figures from Nielsen, which showed volume for the total wine market declined 0.3%.
Chief executive Steve Lewis said the reduction in its minimum order requirement from 12 to six bottles a year ago had boosted transactions, while it also benefited from Threshers-owner First Quench went into administration in October 2009.
Lewis said: “With the supermarkets being such ferocious competitors you have to swim hard just to keep hold of your market share, so we’re very encouraged to have grown share.”
He pointed out that Wine Rack, which was the First Quench fascia which competed most with Majestic, previously had sales of Champagne and wine of about £80m, so “some of that must have switched to us”.
Lewis said the minimum order change has resulted in the number of new and active customers - those who have shopped once in the past year - increasing 14% to 496,000. The number of transactions was also up 18.7% to 869,000. Average spend per transaction declined 7.2% to £122 due to the switch.
Majestic reported total sales up 10.2% to £117.6m, and like-for-likes in the UK were up 7.6%. Sales of fine wine priced at £20 and above surged 20.2%. Its French business is now also in positive like-for-likes, up 22.9%, against soft comparables after “having a torrid time for the last five years”. Majestic changed its marketing message in February to guarantee every bottle of wine in France would be £2 cheaper than the UK, and competitors Tesco, Sainsbury’s and Oddbins closed their Calais shops.
For the six weeks to November 8, like-for-like sales in its UK stores were up 7.4%. Majestic will have 161 shops by the end of the year and has a target of 250.