WINE warehouse chain Majestic Wine today reported a 9% rise in half-year profits and said increasing private sales helped offset the continuing decline in business demand.
Majestic posted pre-tax profits of £6.1 million in the six months to September 28, up from £5.6 million in the same period last year.
The firm said sales were accelerating, with same-store revenue growth increasing from 5.4% in the first half to 6% in the five weeks to November 2.
The report comes after Majestic’s last annual profits more than halved, due to lower sales of champagne to recession-hit firms and as a weak pound made European wines more expensive to buy.
Majestic said sales to private customers in the first half showed "strong growth", up 8.9%, while the economic conditions continued to hit business demand, with sales down 6.9%.
Sales of fine wines priced at £20 or more increased by 14.4% on last year, while the average price of a bottle of still wine rose from £6.19 last year to £6.41.
But Majestic said the decline in sales to business customers meant the average spend per transaction fell slightly to £133.
The retailer reduced the minimum in store purchase to six bottles of wine in September and said the results of the change were "encouraging", with an increase in the number of transactions and more new customers registering on the firm’s database.
"Whilst we are pleased with the trading performance so far this year we remain cautious about the economic climate," the firm said.
"We are well positioned for the very important Christmas trading period."
Sales of sparkling wine grew well in the period, with still wine from South Africa, New Zealand and Spain also proving popular.
Majestic, which currently has 153 stores in the UK, said it could grow to occupy at least 250 locations.
During the period, the company opened stores in Southend-on-Sea, Shrewsbury, Edinburgh and Market Harborough.
Outlets in Abingdon and Sale have also been launched since September.
Majestic chief executive Steve Lewis said the firm had dealt with the strong euro and higher price of old world wine, by focusing on produce from countries like New Zealand.
He predicted tough competition from supermarkets on price in the run up to Christmas, but said Majestic would be able to stand apart with tastings in all its stores and strong customer service.
There is also a growing trend of customers enjoying their wine at home.
The firm’s results come as rival off licence brands struggle under pressure from supermarket competition.
Threshers’ owner First Quench, which trades as The Local, Haddows, Bottoms Up and Victoria Wine, fell into administration last month.
Administrators have announced the closure of 373 loss-making stores, but said interest from potential buyers in the remaining outlets was "overwhelming".
Mr Lewis said the uncertainty over the chain was likely to help Majestic.
"I think that we are very different from the high street," he added.