No champagne for Majestic but still worth a glass or two
Total sales slightly up but like-for-likes lose their sparkle
For the financial year to March 31 2014, total sales for Majestic increased +1.4% to £278.2m , with LFL sales declining -0.1%. Group Profit before tax increased marginally to £23.8m (2013: £23.7m)
Average transaction per customer was more or less level at £129 but the number of active customers increased by 2.9%.
Commenting on the results Steve Lewis, Chief Executive, said, "Majestic made good operational progress in the last year and despite the difficult trading environment delivered a solid performance. 2015 will be a year of increased investment for Majestic to ensure that we have the right infrastructure to maximise on our long term opportunities for future growth."
Neil Saunders, Managing Director of Conlumino, comments: "Majestic’s forward strategy of growing its store estate (it is currently targeting 300 stores across the UK, up from the 206 it operates today) and its renewed focus on business customers should certainly help drive total sales growth over the next few years. Getting more from existing stores is also important and here Majestic’s strategy of educating and enthusing customers through wine tastings is a sensible way of underlining its specialist credentials and generating loyalty.
"The real opportunity, however, lies in multichannel. Here it was disappointing that Majestic only managed to attain 5.8% growth in online sales across the year. In our view, this should be a great deal higher and at its current rate suggests that Majestic has lost share of the online market. The plans to invest in technology and logistics should help ease this number up over the next few years, but given the competition in the online market Majestic will need to be nimble to take advantage".
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