Majestic Wine has reported its strongest ever Christmas trading period, with group sales rising 12.4% in the 10 weeks to 2 January. The outperformance was driven by surging demand for gin and sparkling wine, alongside robust growth at its online and fine wine operations.
Established Majestic stores saw sales climb 7.5%, while the Naked Wines website recorded growth of nearly 30% and fine wine specialist Lay & Wheeler jumped 62.3%. Gin sales soared 55% year-on-year, with premium expressions such as Warner Edwards rhubarb gin and Sipsmith sloe gin proving particularly popular. Sparkling wine sales increased 12%, with prosecco growing three times faster than champagne.
The results comfortably beat analyst expectations of 6% growth, which had been tempered by a profit warning in September following a failed marketing campaign in the US and weak business customer sales. Shares rose more than 6% to 345.5p on the news.
Chief executive Rowan Gormley said the retailer's transformation plan was working and that the company remained on track to reach £500m in annual sales by 2019. The Christmas performance marked an acceleration from the 5.7% growth reported for the six months to 26 September.
However, the success came at the cost of a 1% reduction in gross profit margins, which Majestic said was necessary to remain competitive in a heavily discounted UK market. Analysts offered a mixed response, with Canaccord Genuity's David Jeary calling the statement a 'curate's egg' and questioning the group's inability to extract a pricing premium despite superior customer service.
Sarah Johns of Verdict Retail defended the strategy, arguing that competing with discounters such as Aldi and Lidl was the right move. She noted that value-for-money offers, voucher marketing and free standard delivery for six bottles had resonated with savvy consumers, and that the marginal fall in margins was a worthwhile trade-off given that Christmas accounts for nearly a third of annual sales.
