Majestic Wine learns lessons from Scottish ban on bulk discount deals

By PETER RANSCOMBE
Published on 18/06/2012 18:17

MAJESTIC Wine chief executive Steve Lewis has revealed the Scottish Government’s ban on “two for one” special offers on alcohol has taught his firm lessons it may use across the UK.

The SNP administration stopped shops from offering multiple-buy discounts on wine on 1 October in an attempt to help people cut their drinking.

Lewis said: “Customers in England have to buy two bottles for £15, whereas in Scotland they can buy a single bottle at £7.50.

“So what we’re finding is that customers in Scotland are now buying a much wider variety of wine than in the rest of the country. That’s giving us thoughts about how we’re operating in the rest of the country.”

Lewis vowed to carry on with his ambitious expansion plans despite a slowdown in sales growth over recent weeks and said he was looking at sites north of the Border.

The firm plans to open 16 stores during its current financial year, with its Queensferry Road branch in Edinburgh recently coming on stream. Lewis aims to grow the chain to 330 outlets from the 181 at present.

Like-for-like sales grew 2.6 per cent in the year to 2 April, but have slowed to just 0.6 per cent over the past ten weeks due to tough comparisons with last year’s royal wedding.

Sales in the run-up to the Diamond Jubilee were “strong” but were followed by customers returning undrunk bottles after many events were rained off.

Majestic posted a 14.5 per cent rise in pre-tax profits to £23.2 million on the back of an 8.9 per cent rise in total sales to £280.3m. The record profits allowed the chain to increase its total dividend by 20 per cent to 15.6p, making it one of the rare Aim-quoted firms to return cash to shareholders.

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