Knowing your product is an essential part of any retailer’s armoury. And Steve Lewis – who takes over as chief executive of Majestic Wine in August – certainly embodies that maxim.
Lewis has worked for Majestic since he joined the company as a graduate trainee in 1985. At that time the company had just opened its 12th store, in Clapham, south London. No one had tasted wines from places such as Argentina, Chile or New Zealand before – in those days, Bulgarian Cabernet Sauvignon was one of the top sellers. Now, Majestic has 145 warehouses and Lewis has worked his way up through roles in both stores and head office to chief operating officer. The top job is just seven weeks away.
While outgoing chief executive Tim How is synonymous with the Majestic business, Lewis has been a key player in the company’s emergence as a case study of how a specialist retailer can take on the supermarkets. But as he gears up to take the reins at the AGM on August 8, how does he feel about filling such big shoes? “I have huge admiration for Tim and he has been absolutely central to how this business has been built,” says Lewis. “What he’s done is built an extremely strong team around him.”
Lewis’s ascent to the top job is hardly a surprise. His promotion to chief operating officer in January 2006 was part of a conscious focus by the board, headed by chairman Simon Burke, on succession planning.
Because Lewis and several other members of the senior team have grown up with the business, the incoming chief says that major changes to strategy are unlikely. “Tim and I speak daily, we sit next to each other and, down the years, he has always challenged me. I may do aspects of the job in a different way, but the values will be the same,” he says.
How leaves a business that is in good shape, but is finding times more challenging. This week, it revealed a 3.4 per cent rise in profits to£16.7 million for the year to March 31, on the back of sales up 3.1 per cent and a 2.4 per cent like-for-like jump. Consumers are feeling more cautious and the supermarkets are aggressively chasing Majestic’s customers. The need to be competitive on price while retaining Majestic’s distinctive edge on customer service has never been more important.
“There has been a slowing in growth,” he says. “People are more cautious and we have to respond.” The company’s answer is to focus on its established core values of customer service and product knowledge, while also highlighting its value ranges as part of an increased focus on marketing. “We have had to promote more aggressively and market more aggressively,” Lewis says.
At the same time as promoting value ranges, the company is also rolling out distinct fine wine areas into a third of its stores, selling bottles at£20 or more. This is an area where Lewis feels that Majestic’s staff – most of whom are graduates and study for qualifications in wine – give it an unassailable head start over the competition and sales rose by 2.5 per cent last year.
“It’s all about recruiting and retaining good people who have enthusiasm, motivation and commitment,” he says. “Good customer service isn’t the norm in UK retailing, but everyone here understands that, in the end, it’s all about the customer.”
The more challenging economic climate has not deterred Majestic from continuing to invest in new stores. This year it will open 10 and resite three, but Lewis would like to open more and says that the availability of suitable property is the only constraint.
Lewis sees the Majestic web site as another key plank in riding out the downturn. Launched last October, the site accounts for 7.9 per cent of UK sales. Web orders are fulfilled from stores and Lewis believes that the combination of the web site and personal service and delivery from a local store offers real convenience for customers. “We’ve found that people are delighted to talk to a real person,” he says.
To date, Majestic has only dipped its toe in the international water, with its Wine and Beer World stores in northern France catering for the booze cruise trade.
Beyond that, he is open minded. “I think international expansion might figure,” he says, adding the caveat that having only 3 per cent of the UK still- wine market means there is plenty to go for at home.
Ireland has also been considered but property costs proved a deterrent, while non-wine-producing countries in Europe and beyond are a possibility. “Selling new world wines to the French would be a very difficult proposition,” he laughs.
Times may be tougher, but Lewis still has plenty to smile about and you get the feeling he is moving into his dream job. “I’m still forced to try the whole range,” he says. “Or at least that’s what I tell my wife.”
Raise a glass
Education: studied modern history at UCL
Favourite wine: New Zealand Pinot Noir
2006: promoted to chief operating officer
1998: joined board
1991: promoted to retail director, responsible for entire retail function and corporate sales
1987: became regional manager
December 1985: joined Majestic as graduate trainee. Rapidly progressed to store manager