Drinks specialist Majestic Wine is to focus on increasing its average basket size from its existing customer base after shelving its TV advertising campaign.
The wine specialist is to use social media to entice existing customers to spend more after the touch paper to gain new customers through TV failed to ignite.
Majestic aired the third iteration of its Come & Explore adverts last Christmas. Chief executive Steve Lewis told Retail Week that while the impact of the ads had been “positive” they had “not been compelling enough”.
He added: “We might do them again but the reason we’ve backed off was we had a good year of getting new customers through social media. We will now focus on targeting that loyal customer base through social media.”
Lewis said Majestic would still aim to acquire new shoppers via social media channels.
The number of customers who made purchases last year rose by 56,000 to 624,000. The retailer’s average basket value was static at £128, and Lewis said he hopes build on that this year.
The retailer intends to drive home its advantage over the supermarkets through social media. “We are trying to do things the supermarkets just cannot do and take advantage of our unique niche with store managers tweeting about everything from tastings to events,” he said.
Majestic Wine yesterday reported a £500,000 increase in pre-tax profits to £23.7m in the year to April 1. Total sales fell 2.1% to £274.4m, dragged down by a “managed reduction” in its wholesale arm.
UK stores delivered a like-for-like advance of 1%.
Online sales rose 14.7% to account for 11.1% of UK retail sales.
Sixteen shops opened over the year and the 193-store retailer ultimately desires a 330-store estate. Lewis said that the retailer’s existing stores could potentially double their turnover.
Panmure Gordon analyst Philip Dorgan said: “We believe that Majestic has significant market share opportunity as it builds on its position as the UK’s preeminent specialist wine retailer.”
The retailer’s commercial arm grew sales 13.6% in the last year after a number of contract wins including Lord’s cricket ground in London.