Majestic loses its fizz in slump

Champagne sales have gone flat at Majestic Wine as businesses cut back on entertaining and consumers tighten their belts.

Chief executive Steve Lewis said: "Our customers haven't had a lot to celebrate in the last few months."

In the half-year to the end of September, champagne sales dropped 6.4%, partly in reaction to higher prices. Profit tumbled 25% to £5.6 million, despite a 3.4% rise in overall sales to £94 million.

Majestic expects trading conditions to be challenging. "The last few weeks have been especially tough," Lewis said. Like-for-like sales in the UK in the last five weeks are down 4.7%.

City analysts say competition from supermarkets remains the biggest issue for Majestic.

Evolution Securities said: "The main threat from supermarkets is predatory pricing and significant range extension."

The average cost of a bottle of wine sold at Majestic is up from £5.85 to £6.19. The interim dividend is held at 2.8p.