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How competitive was Majestic Wine single bottle pricing?

wine

Prior to Majestic Wine price reductions on 500 products, announced on 5 February, Brand View conducted a pricing analysis of a sample of its wine and spirits range, versus six online retailers.

Following a trial in six stores, Majestic Wine removed its six-bottle minimum purchase in October 2015. Now shoppers are able to purchase just one bottle either online or in-store.

It also announced that if shoppers ordered any mix of six wines or spirits that they would receive a discount of between 10 and 33 percent.

CEO of Majestic Wine, Roman Gormley, said “Our customers were telling us that they wanted simpler, clearer pricing, and an end to the six-bottle minimum. This new structure is part of our wider plan to reposition Majestic Wine to become the go-to destination for the best quality wines at the best prices.”

Single bottle purchasing will put Majestic Wine in a better position to challenge the major supermarkets, not only on wine, but also spirits and beer.

Wine – Shelf price

Brand View has reviewed the shelf price of a sample selection of ten wines in Majestic Wine and compared the pricing to that of Asda, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.

Majestic Wine was the sole most expensive retailer for eight of the ten products. Along with Morrisons it had the highest price for the Bollinger Special Cuvee Champagne at £45. The only product which was not the most expensive in Majestic Wine was the Villa Maria Reserve Sauvignon Blanc – it was 51 pence cheaper at £14.49, than Morrisons.

majestic wines vs grocery retailer prices
Brand View Price and Promotions 19 January 2016

 

Wine – Promoted price

Majestic Wine offered a discount on the majority of its wines if the shoppers ordered a case of six, in its ‘Mix Six price’ deal.

Comparing this price to the promoted price (price including promotions) to that of the other supermarkets showed that Majestic Wine was cheaper than many of the retailers with this deal. None of the sample wines were available on a multi-buy promotion in any of the six supermarkets, only Majestics had a multi-buy discount.

It was the sole cheapest for six of the ten wine products and the second lowest priced on the remaining four wines. Of these four wines Asda had the cheapest price on three and Ocado and Tesco were cheapest on the remaining product.

majestic wine vs grocery retailer shelf pricing
Brand View Price and Promotions 19 January 2016* (*Waitrose offer 5 percent discount on the basket total when a shopper orders a case of 12 or more bottles of wine. This is not included in this analysis.)

 

While shoppers can now buy single bottles from Majestic Wine there is still a significant cost benefit to buying a case of six. Those looking to purchase less than six bottles would likely find a lower price at one of the major supermarkets.

Spirits – Shelf price

We’ve reviewed the pricing of a sample of ten spirits sold by Majestic Wine and the six other retailers. Majestic Wine was comparatively more competitively priced on a single bottle of spirit than for the sample of wines. It was the sole cheapest for Ciroc Vodka 700ml and joint cheapest with Ocado for Aberlour 10 Year Old Malt Whisky 700ml.

However, it was the most expensive retailer on five of the products. The greatest difference in pricing, of the sample spirits, between Majestic Wine and the other supermarkets was on Famous Grouse Whisky 700ml. Majestic Wine sold the product for £17.99, almost 50 percent more than Asda’s price of £12.

majestic spirit pricing versus grocery retailers
Brand View Price and Promotions 19 January 2016

 

Spirits – Promoted price

Majestic Wine also offered a ‘Mix Six price’ on the majority of its spirits lines. The ‘Mix Six price’ of all ten sample spirits was 10 percent less than its single bottle price. Majestic Wine was the most expensive retailer for just the Famous Grouse Whisky 700ml.

In addition to being the cheapest retailer for the Aberlour 10 Year Old Malt Whisky 700ml and Ciroc Vodka 700ml before the deal, it was also the cheapest retailer for Belvedere Vodka 700ml and Sipsmith London Dry Gin 700ml on the ‘Mix Six price’.

majestic spirits promoted pricing versus grocery retailers
Brand View Price and Promotions 19 January 2016

 

Missing product images

Product images are an important component in shopper decision making. If a shopper can’t see the product it is unlikely that they will purchase it. This is particularly relevant for premium products, as shoppers are highly unlikely to part with a large sum of money, without seeing a product and will likely visit another retailer’s website to purchase the product.

Majestic Wine had a significant number of missing product images that would likely dissuade customers from purchasing these products. Its listing of the Dalmore 18 Year Old Malt Whisky did not have a product image and a shopper may have been hesitant to part with £105 without an authentic, credible product image.

dalmore whisky product listing majestic wines
Majestic Wine website 19 January 2016

 

Listings of Chapel Down wines and beers from Duvel and Leffe were also missing product images.

Conclusion

The removal of its minimum six-bottle purchase was likely intended to encourage shoppers that would traditionally purchase alcohol in supermarkets to shop at Majestic Wine instead. However, looking at a sample of its wine and spirit pricing, prior to the recent price cuts announcement, it might have struggled to entice shoppers based on single bottle pricing alone.

Although its ‘Mix Six price’ deal offered lower pricing on some wines and spirits than many supermarkets, the requirement to purchase in bulk may put off some prospective shoppers.

To improve shoppers’ perception of the retailer in relation to its competition, Majestic Wine could also look to address its missing product images issue, which would build shopper trust and faith that the retailer can provide a comparable service to its rivals.

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