Majestic Wine has reported a jump in pre-tax profit to £3.1 million over the 26 weeks ending October 2 2017, up from a loss of £4.4 million. Sales increased 5.7% to £213.3 million and Naked Wines has become profitable in all three of its geographical markets, two and a half years after the acquisition.
CEO, Rowan Gormley, said Majestic Wine’s plan is on track and it is “time to put our foot on the gas”.
“Two years in and profits are growing,” he said. “Our foundation is solid and we are ready to accelerate growth. We have the opportunities to invest in new customers and a team excited to focus on what they do best.”
He said the business is coming to the end of the “heavy lifting” part of its transformation plan, which included the launch of a new website, store refits, improved stock availability and an improved customer data proposition, which all came in on time and on budget.
Over the next year, the retailer will also implement new ePos and accounting systems.
Team and customer retention
Majestic said its transformation plan is making real traction on a “fundamental level”. While sales have been growing, the retailer has historically struggled to improve its team retention and customer retention numbers. But in recent months it has seen improvements to team retention thanks to empowering store managers to be entrepreneurs by giving them more freedom to make decisions about their stores.
Meanwhile, customer retention has fallen over the last few months, but Majestic believes its customer engagement efforts around data will soon pay off.
Speaking to Essential Retail, CFO, James Crawford, said customer retention improvements must start with team retention.
“The biggest indicator of good customer service is a well-established team who knows its customer base, with the same people in the store over an extended period of time, so if Mrs Jones visits a store, she can be shown wine based on what she likes to drink.”
Crawford said in-store teams now have access to data about previous purchases from both in-store and online which is available to colleagues on the till systems and laptops. This will be further integrated into the new ePos systems which are currently being designed and will launch next year as one of the final projects of Majestic’s digital transformation.