Tim How of Majestic on wine retailing

This show was published 28 September 2007

Overview

Tim How is CEO at Majestic Wine Warehouses winner of the 2007 Decanter award for Best High Street Retailer. Tim describes Majestic's positioning in the UK and how they compete so successfully.

Majestic has 135 stores in the UK and 3 in northern France - the range in France slightly more limited and the focus is on everyday wines. A third of sales in France are pre-ordered before customers make the trip over.

The range in UK stores is much broader. Some central London stores in more affluent areas sell wines at higher price points - Majestic learnt that they are capable of selling more expensive wines and have introduced a fine wine range (£30 and above)into more affluent catchment areas. They have recently opened in Chester, for example, and will have a range of fine wines.

Majestic has 400,000 customers who have shopped at least once in the last 12 months. They have a broad customer base - customers must buy a minimum of 12 bottles so they are selling to people who have an interest in wine. Their customer proposition is to offer a great range and provide great customer service. The range starts at £2.99 with £5.70 the average bottle price compared with the market at just over £4. The average spend is £123 with an average purchase of 18 bottles. Shoppers can also buy beer and spirits.

Nearly all staff are graduates. The number one reason why customers shop at Majestic is enthusiastic staff with knowledge. Majestic is frequently the first place graduates go to if they want to get into the industry. The key is to ensure staff enjoy their time at Majestic - they get to attend tastings and go on overseas trips.

Controlling costs is a major factor to their success. They keep a close eye on costs and run a tight head office and operations. Pricing is in line with supermarkets although promotions tend be over long periods rather than short bursts. Promotions focus on different wine regions or countries e.g. the current promotion is 20% off Italy when you buy 2.

The plan is to focus on the UK where there is still a huge opportunity to gain share - the aim is for 5% of the UK market. Majestic is not looking for any further expansion overseas.

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