Weak pound has seen Majestic supply unusual wines but has not helped profits
Majestic has announced a loss of £1.5 million but it is hoped to be the tipping point, according to CEO Rowan Gormley.
The falling pound saw Majestic raise prices by 4-6% earlier in the year. However to manage the rising price of wine, Majestic has been looking at non classic countries for its cheaper wines. Hungarian Gruner Veltliner and Romanian Pinot Grigio are popular entry level wines selling from £5.99 according to Richard Weaver, merchandising director.
But this move by Majestic has not been enough to help with profitability which has fallen every year since 2014 when pre-tax profits stood at £23.8 million. In 2015 profits started falling when Majestic acquired Naked Wines. The business plan now expects to see 70% of future profits coming from Naked Wines. In 2018 a profit of £16.7m is forecast from a turnover of around £490 million. This is a much lower profit than the £23.8 million in 2014 from a turnover of £278 million.