by Charles Metcalfe
First out was Tesco, with wine growth in line with the 12.5% increase in total company sales, according to Dan Jago, head of the wine department. Then came Majestic, a wine warehouse company, whose minimum purchase is 12 mixed bottles. Profits were up 17% in the first six months of 2006, with like-for-like sales up 9.3% overall, 6.2% in the UK. What is making them the most profitable UK specialist wine retailer is that their customers average bottle spend (õ.66) is higher than that of any of their large competitors; and their sales of wines over ò0 ( 29.50) were up 33% on last year. Although, as Tim How, Managing Director was careful to observe, at just over 3%, they re still a small proportion of sales - and it s more to do with selling lots of champagne . But, he continued, it proves there isn t a glass ceiling to what the Majestic brand can achieve. We now have 20 stores selling 50 wines at over ó0 ( 44.40) a bottle. But our success is more to do with selling New Zealand Sauvignon and Rioja Reserva.
Next was Sainsbury s, the UK s third largest supermarket, with retail sales up 8.3% and profits 28%. Jane Hughes, the Sainsbury s wine category manager, was delighted. We always over-perform relative to the total Sainsbury s picture, she said. Sainsbury s has 16% of supermarket sales, but Sainsbury s wine has 20%. Hughes cited wine availability in stores as never better - which has to mean there were problems before and listed initiatives such as blackboards in store by the fish, meat and ready to cook counters suggesting wine pairings as factors driving wine sales.
The number two in the UK market, the Walmart UK subsidiary Asda, was out next. Actually, it was a rehash of the UK results from the last declared results from Walmart, year end 31 January 2006, so mostly relating to Asda s 2005 performance. Because of this, and differences between Asda s and Walmart s year-ends, it s difficult to be precise over figures. Sales are up either 3.1% (according to the Walmart website) or 4.2% (the UK statement). But Asda profits are down nearly 10% in total. Wine, though, as Linsey Wright, general manager of the Asda wine department says, is a small but important part of the overall Asda business, between 3 and 5% of total sales. However we have aspirations to drive our wine business even further in 2007. We have seen double digit growth in ros鬠organic, extra special and sparkling wines this year, she added. Asda has also brought Philippa Carr MW into a more central role of product development, which should raise the game for the own-label wines.
