Q&A: Majestic Wine chief executive Steve Lewis on its investment plans

Why did the past year prove challenging for Majestic Wine?

It was primarily due to the price inflation of wine over the past couple of years, although this has levelled out now. The sector remains highly competitive with pressure from supermarkets but clearly we’re very different to them. If you look at our model, we offer a high level of customer service and provide activities like wine tasting.

Why were profits flat?

We’ve invested a lot over the past year. Last July we launched a new site and platform. It offers us better prospects and is fit for purpose for the next five years. We’ve also invested in relocating our head office and we’re opening a new distribution centre.

What other areas is Majestic investing in?

We enhanced the customer proposition by launching click-and-collect last summer. As a result, we’ve seen click-and-collect sales increase by 38%, although this is off a small base. The plan is to improve our social media channels. We appointed a new marketing agency called Indicia in March to develop a real-time multichannel strategy. We need to be more segmented when it comes to our marketing and talk to customers in a more personal way.

Majestic has an estate of 206 stores and plans to grow this to 330. When do you expect to reach this?

We opened 13 stores last year and we plan to open between 12 and 16 this year. We’ve got a good seven to eight years of growth ahead. The stores will be across the country – for example, we’ve just opened in a shop in a derelict shed in Hexham in the north and a store at Leighton Buzzard in the south.

How are you feeling about the year ahead?

We’re taking the time to invest and that’s why we are guiding that profits will be flatter in the year ahead. I’m feeling very optimistic about the long-term future of Majestic. We’re putting the infrastructure in place to support a growing company. That’s what the year ahead is all about.