The summer trading season ushered in a period of hardship for many retailers. The unseasonably wet weather, combined with the excitement of the summer of sport centred around London, meant that consumers were largely distracted and thus unwilling to brave the high street to make large or expensive purchases. Instead, many chose to simply buy in the essentials and sit out the excitement sheltered from the elements in the comfort of their own homes.
This, of course, meant that many retail chains and independent stores saw a significant hit on their half yearly revenues, and given that summer is usually a boom trading time that dip could be difficult for many to recover from over the following six months.
Fortunately, many retailers have managed to pull up sales before the Christmas rush, meaning that their overall revenues will look much healthier before the festive season hits. Majestic Wine is just one company that suffered during the summer but have still posted a successful half year report, with a 4 per cent profit rise for the six months ending on October 1st, taking the overall figure to £9.2 million.
The chain currently operates 189 branches within the UK, whilst also catering for private events booked in advance. However, due to the wet weather over the summer – its most popular season for outdoor events – many clients chose to cancel their bookings with the company, meaning that revenues took a significant hit.
Despite this setback in-store sales still managed to climb by 4.7 per cent to £108.7 million, showing that consumers are still interested in visiting specialists rather than supermarkets for certain products. Furthermore, the number of customers recorded on the chain’s database who have made a purchase in the past year also rose by 11 per cent, with the average transaction made per customer rising by £1 to £126.
Majestic Wine claims that the successful half yearly takings show that theirs is a particularly resilient business, especially given the factors counting against them this year.
In a statement, the company continued; “During the summer sales were adversely affected by unseasonable weather that resulted in the cancellation of a large number of outdoor events.”
The company has now also revealed that, in the six weeks since the beginning of October, like for like sales have grown again by 1.2 per cent, indicating that the Christmas season will be a successful one for Majestic Wine. And, with the end of the recession loosening the purse strings of Britain’s consumers a little, the average bottle price of purchases made by customers of the chain has risen to £7.46, compared to the same time last year when it totalled £7.13.
Of course, these figures do not necessarily mean that the future for Majestic Wine will be plain sailing, as fears of a triple dip recession sparked by poor results in the retail industry for October may encourage consumers to rein in their spending once again. In that case, luxury items will be the first to be cut back upon – meaning that a company which specialises solely in wine will have a turbulent few months ahead.
Phil Wrigley, chairman of Majestic Wine, is well aware of this fact and, while he is optimistic about the future, he remains cautious in the face of a tough retail environment.
He says; “We recognise that the environment in which we operate is likely to remain challenging.
“We are most encouraged by the number of new customers attracted to Majestic and we are well prepared for the very important Christmas trading period.”
Do you think that, should Britain fall back into recession, Majestic Wine will be posting a very different set of figures this time next year, or do you believe that the company is strong enough to attract consumers even in the midst of a spending freeze? How could companies such as Majestic Wine encourage yet more consumers to spend in their stores and on their website, given that the recession has made society at large very unwilling to splash out on luxuries? Tell us your thoughts and ideas about this story in the comments section below.
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