Majestic set to expand into fine wine market

TIM How, the boss of wine warehouse chain Majestic, says he wants to tap into the growing demand for an expensive tipple by adding a chain of fine wine outlets in the next year.

Majestic saw the number of people willing to spend more than 20 a bottle rise by 30% in 2005 and How believes it is a market that is increasingly gathering momentum.

Plans are now under way to roll out 25 'store-within-a-store' fine wine shops across the warehouse chain.

How said: "Fine wine has shown very encouraging growth over the last year. This is part of a move within the market that has seen average price points nudging up as people become more interested in wine.

"We now have a plan, which we are executing, to roll out the concept of fine wine [anything over 20 a bottle] within 25 of our stores next year."

Earlier this year research by market analysts AC Nielsen showed wine consumption, which had risen every quarter since the early 1980s, had ground to a halt just below the 92 million case mark and is now in shallow decline. In the first 16 weeks of 2005, Britain drank 313 million bottles of wine, against 308 million bottles in the same period this year - a 1.5% dip.

How refused to comment on the research, saying it was "too early to draw a conclusion", but the Majestic initiative is clearly designed to safeguard against any stagnation in sales.

Majestic is also looking to ramp up the expansion of its chain. Presently it has 129 stores and is opening on average six a year. How wants to build the chain up to 200 stores, opening 10 a year.

"There are still lots of catchments where we feel we could open a store. In Scotland we need a store in Aberdeen and we are hoping to achieve that in this financial year. Equally, we would like to double our presence in Edinburgh to four."

Majestic unveiled its preliminary results last month, with sales rising 6% from 162.5m last year to 172.2m, and pre-tax profits up 9.8% to 14.2m.

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