Majestic may drop six-bottle minimum purchase

Majestic Wine is considering scrapping the policy that requires customers to buy at least six bottles of wine at a time.

Majestic was founded in 1980, selling wine by the case to retailers from a warehouse in Wood Green, north London. It dropped the minimum purchase from 12 bottles to six in 2009, but never quite shook off its cash-and-carry image.

And new chief executive Rowan Gormley, the founder of Naked Wines, which Majestic took over in April, says changes are on the way. The minimum order and warehouse format of the stores, he says, have been putting customers off.

"What customers are saying is they find the warehouse format, the six-bottle minimum and the discount pricing structure difficult and intimidating," he tells the Guardian.

"The six-bottle minimum comes up again and again so it's something we will have to test."

Gormley says he plans to experiment with different formats over the next six months. Six stores will scrap the six-bottle minimum until the end of August; if successful, the policy could be expanded to all 212 UK outlets.

As for the warehouse format, with customers stacking their trolleys with cases, Gormley says: "The reason a number of new customers who walk into the store walk out again is that they thought it was a wholesale store."

The company instead will look at creating smaller stores, sited in city centres, and plans to open between 20 and 30 this year. It's competing more and more with supermarkets, particularly the discount retailers such as Aldi and Lidl, but says it aims to offer a more personal experience. This, Gormley admits, will mean doing more to attract and retain knowledgeable staff.

Gormley's comments come as Majestic reports pre-tax profit excluding for the year ended 30 March of £18.4 million, down 22.5% on last year. Average spend per visit was unchanged at £129.

Profits are likely to fall again this year as the company invests in change.

"Whilst my review of the business is ongoing it is obvious that we need to make investments to reinvigorate Majestic Wine," says Gormley.

"These investments will initially suppress profit in the short term but I am confident we can rebuild momentum in this excellent business."

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