Majestic Wine PLC (MJW)

Host: Did you know that one of Britain's most successful wine merchants
won't actually allow you to buy a bottle of wine? That's right.
We're here today to show you what happens when you try to buy one.
Let's see if we can go and buy a bottle of Merlot. You know, the
kind that you get in any offey for about five or six quid. Come on.

I'm looking to buy a bottle of Merlot. I'm having a dinner party
and I was wondering if you could recommend something.

Man: Yes. What price range are you looking at?

Host: About five or six pounds, I think.
The Majestic staff are know for their friendliness and great
service.

Man: That is Centuritan Merlot from Chile. It's normally six-twenty
four. We're down to five pounds. It's all 20 percent off at the
moment.

Host: Excellent.

Man: Generally, South American wines, particularly Chilean wines tend to
be quite robust, plus spicy. And I think for a party that will do
really well.

Host: That's great. Thank you. I'll have a bottle of that, please.

Man: Is it just one bottle you're after?

Host: Yes, absolutely. There's just four of us having dinner.

Man: We actually sell them in 12 bottles. That's our minimum purchase,
unfortunately.

Host: What? Are you serious?

Man: Yes, I am serious.

Host: OK. Well I guess someone is going to drink it.

Host: What happened to giving the customer what he wants? Yes, Majestic
bizarre selling point is it won't sell you less than 12 bottles at
a time.
Back in 1981 when Majestic opened its first store in Wood green the
only way it would stay open all day without falling foul of
licensing laws was to insist its customer's bought in bulk. Perhaps
some wine had passed our parliamentarian's lips the day they made
that law.

Anyway, times have changed and so has Majestic.

Let's take a look at dividends, and profits and sales, and profit
margins, and UK stores. Like Christmas, they'll have 141. And
they're serving more and more customers. Whoops, that's better.

And the average price for a bottle of wine is rising too. Get the
picture? Yes, lots of graphics. New guy doing the visual effects.

But this is how much a typical customer spends every time he makes
a purchase at Majestic.

So what is the secret of their success? Beats me. I've never heard
of a sweet shop refusing to sell single bars of chocolate. Or a
garden center that insists that customers must buy dozens of trees.
Maybe publicans should serve pints, 12 at a time. Come to think of
it, I think I've been in some pa.......

Anyhow, whatever the reason, 12 bottles is Majestic niche and by
serving big spenders it says it can pay them the attention they
deserve, and perhaps save them some money.

Investors love a niche almost as much as they love a chart that
goes from the bottom left to the top right.

But another reason for Majestic success has less to do with
Majestic and more to do with us.

In 1986 the average Britain drank this much wine. But by 1996, the
year Majestic floated on the A-market things were looking up.

And in 2004 we were knocking back wine like a drunk french man
after a world cup victory. Happy days.

As a nation, we downed 1.67 billion bottles of wine in 2005,
without, apparently, suffering a hangover.

Experts project the binge will continue at least until 2010 when
our tally of 1.83 billion bottles floats us up to top position in
the pecking order of European wine markets.

And here is one more chart for you. It's another share price chart.
Now that's what I call Majestic.