WINE retailer Majestic yesterday said it remained “cautiously optimistic” after its Christmas promotion got off to a good start, despite registering the first dip in sales since 2009.
Sales at UK stores open for more than a year fell by 1.1 per cent in the six weeks to 7 November, after two weeks of “disappointing” performance in mid-October.
Majestic shares dropped on news that sales had slowed, shedding 3.85 per cent to close at 400p, valuing the firm at £246m.
Steve Lewis, chief executive, told City A.M.: “October is not a high turnover period, and trading has improved since then. We’ve seen a good response to our Christmas promotions and we are cautiously optimistic.
“What we’ve seen time and time again this year, is that when people do want to spend money they will do so – whether it’s Easter, June, the warm weather in September or Christmas.”
Majestic reported first-half pre-tax profit of £8.8m, a jump of 20 per cent on a year earlier, on total sales that grew 8.7 per cent to £127.8m. UK like-for-like sales in the first half were up 2.7 per cent excluding VAT.
However, the average selling price was up by 6.9 per cent in its first half, suggesting that volumes dropped by 4.2 per cent.
Analysts at Oriel said the boost Majestic received after it halved the minimum purchase from 12 bottles to six in September 2009 was “passing”, adding the firm would struggle to grow earnings as quickly from now on.
Lewis said sales of its “fine wine” collection – bottles priced at £20 or higher – had grown by 20 per cent over the period.
He added the firm would continue to expand, adding 13 stores to its UK portfolio before the end of its financial year.