One small change made a huge difference to Majestic Wine's sales and shares are going nuts
The company said on Thursday that sales jumped by 42.6% between October 27 and January 4. Most of that came from the acquisition of online rival Naked Wines in the year, but if you strip that out sales were still up by 12.2%.
In Majestic Retail - its network of stores that flog bottles to everyday shoppers - sales jumped by 7.3%. That's a huge improvement on the same quarter last year, when sales fell by 1.7%. Majestic Retail is by far the biggest part of the business, generating £231 million of the company's £364 million in revenue so far this year.
So what's behind the turnaround? A pretty simple change. Back in October Majestic announced that it was changing the way it sold wine. This involved pricing its stock more competitively and, crucially, shifting from a six bottle minimum to letting people buy individual bottles.
That's helped transform Majestic from being somewhere you visit once or twice a year to stock up for a party or Christmas, to a regular shop you can pop by on the way home from work to grab a bottle.
Majestic Wine CEO Rowan Gormley says in today's statement:
This is an encouraging result. Majestic Commercial and Naked Wines continued to grow strongly, and I am particularly heartened to see the Majestic Retail business grow as the impact of our better pricing, better service and better-looking stores starts to take effect. However there is still much to do. We are only three months into our three-year plan and although this performance is pleasing it is too early to call it a trend.
Majestic Wine sales are up over 8% this morning - a very Merry Christmas!
