Majestic to increase investment in customer acquisition
Majestic has announced plans to invest an additional £9 million to £12 million in acquiring new customers but said earnings would be reduced as a result.
The retailer currently spends £12 million each year on new customer acquisition but said it plans to increase this sum in its 2019 financial year as new information had shown that the investment opportunity was materially bigger than previously thought.
Majestic said the investment will reduce its adjusted EBIT in the year by between £2 million to £3 million but will increase “annual generation of future value” from £48 million to £80 million plus a year.
Rowan Gormley, Majestic chief executive, explained: “We are in the fortunate position of having the option to accelerate growth by investing in new customer acquisition.
“We are starting from a good place with the core business on track to meet our 2019 sales target of £500 million and the market’s expectation for profits and dividend in FY18. In the last three years, we have doubled sales at Naked Wines and delivered profitability in all three markets – after increasing investment in new customer acquisition.
“We believe we can double the level of investment again while maintaining the returns, driving sustained growth in shareholder value.”
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