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Morning Briefing for pub, restaurant and food wervice operators

Thu 7th Jan 2016 - Majestic Wine reports 42.6% sales uplift
Majestic Wine reports 42.6% sales uplift: Majestic Wine, the UK’s largest wine specialist and owner of Naked Wines, has reported total sales grew 42.6% for the 10 weeks of Christmas Trading from 27 October 2015 to 4 January 2016 – the company delivers circa 30% of total sales during the period. Sales were boosted by the acquisition of Naked Wines. On a pro forma basis over the period, group sales were up 12.2%. Majestic Retail like-for-like sales grew 7.3% in the period (versus decline of 1.7% in comparator period), supported by the previously indicated strategic investments to reinvigorate sales growth with a new and simplified pricing policy and improved customer experience in store and on-line. As expected these investments resulted in higher costs and a slightly lower percentage gross margin during the period. Chief executive Rowan Gormley said: “This is an encouraging result. Majestic Commercial and Naked Wines continued to grow strongly, and I am particularly heartened to see the Majestic Retail business grow as the impact of our better pricing, better service and better looking stores starts to take effect. However there is still much to do. We are only three months into our three year plan and although this performance is pleasing it is too early to call it a trend. I take my hat off to the 1000+ people we have, from Aberdeen to Sydney, who worked flat out during the festive season and deserve a large glass of wine. The teams have embraced our changes and worked exceptionally hard to deliver a better experience for our customers. We remain focused on our values of looking after our brilliant teams and suppliers and thank them for their support during the initial steps of transforming Majestic into a truly fantastic business.”

Marks & Spencer food sales up 0.4% LfL, general merchandise down 5.8% LfL, chief executive to step down: Marks and Spencer has reported its food business had its best ever Christmas, significantly outperforming the market, with record sales over the festive period, up 17% in the key Christmas week. Food sales were up 3.7% and 0.4% in like-for-like terms in the 13 weeks to 26 December. General merchandise sales were down 5% and down 5.8% in like-for-like terms due to “unseasonal conditions and availability”. Sales through M&S.com rose by 20.9%, driven by strong customer traffic. The company stated: “We have now delivered 25 consecutive quarters of like-for-like sales growth. Our differentiated products, market leading innovation and unrivalled quality made us the destination of choice for customers at this special time of year. We launched over 800 new products, including 400 unique seasonal lines. In general merchandise, we faced challenging trading conditions and fell short on availability. Unseasonal weather impacted sales across the clothing sector and resulted in unprecedented levels of promotional activity in the market, starting from Black Friday and intensifying through December. Against this backdrop we held back from the heavy discounting seen across the market especially in the run up to Christmas. While this had an adverse impact on sales we protected gross margin, which we now expect to come in at the top end of the guided range. However, we acknowledge there is more to do to address the disappointing GM sales, and the new team are focused on the three key priorities of availability, ranging and design. M&S.com delivered a strong performance with continued improvement in traffic and customer experience. Our distribution centre in Castle Donington performed well dispatching record volumes while delivering a high level of customer service. We successfully launched our new loyalty members club, Sparks, with over 3.3m customers joining since the launch 11 weeks ago.” Chief executive Marc Bolland, who is stepping down as chief executive on 2 April to be replaced by Steve Rowe, executive director of general merchandise, said: “M&S had an excellent Christmas in food, delivering record Christmas sales and strongly outperforming the market. General merchandise sales were disappointing. We continued to prioritise gross margin and held back from the heavy discounting seen across the market in the run up to Christmas. As a result we now expect GM gross margin to be at the top end of the guided range. I’d like to thank all our colleagues for their hard work and great service over the Christmas period.”

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