Virgin Wines smashes Christmas target

Online retailer Virgin Wines has reported its biggest-ever Christmas, driven by increased membership, Prosecco and a stronger B2B business.

Sales at the specialist wine company rose 15.4% in the nine weeks to 30 December, with total sales of £12.6m. Profits rose 35%, up £1.3m, compared to the same period last week, it said.

Prosecco was again a big driver this year, shifting around 133k bottles over the festive period but Champagne sales also grew year on year, with Grower Champagnes on their own increasing 7%, and sales of premium Australian wine (costing more than £15 a bottle) up 5%.

One other large driver was the boost to Virgin’s membership, up 25,000 in the nine week period, with around 16,000 customers also joining its Winebank loyalty scheme in the same period, taking its total Winebank customer base to around 75,000.

Virgin also saw strong corporate sales, up 101% year-on-year, to around £1.3m, following investment to build its B2B business in the last year. Its Sendagift service, which was relaunched in 2014, also saw a sales boost, up 137% compared to the prior year to £850k, representing a 30% sales growth on expected figures.

In July it rolled out free next day delivery as standard across its WineBank loyalty scheme in order to boost the customer base. The scheme was launched ten years ago to allow customers to save money into an online account, with Virgin adding 25% ‘wine interest’, and it has already doubled the number of customer in the last year.

CEO Jay Wright said there was a temptation for businesses to “chase revenue” over the Christmas period but argued that it was important to maintain a sustainable model.

“We continued to focus on our plan for solid and sustainable business growth, which meant strong profit alongside strong revenue,” he said. “To deliver this we focused on the needs of the customer, giving them exceptional service with great quality product at value for money prices, and it clearly paid off.”

“We are looking forward to continuing this success into 2017 and beyond.”

In October, Wright warned the UK drinks trade against denting consumer confidence by running down market in the wake of the volatile exchange rate and Brexit, saying the industry needed to “Get a grip’. It followed his promise that Virgin would hold prices in the run-up to Christmas in spite of cost pressure on the back of Sterling’s volatility, amid warnings from the WSTA that the price of wine from countries outside the EU could increase by around 29p a bottle due to the falling pound.