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Naked wines’ sales fizz as alcohol home deliveries soar
11 June 2021, 09:14
The wine seller revealed a 68% jump in sales, although heavy spending on winning new customers extended losses.
With pubs shut for much of the year, online drink orders from Naked Wines have soared, the company has announced.
Bosses at the home delivery business said sales in the 12 months to March 29 jumped 68% to £340.2 million.
But despite the boost in sales, losses widened as the company focused on expansion to tap into the growing market. Pre-tax losses hit £10.7 million compared to £5.4 million a year earlier.
The company suggested this approach was paying off with profits from repeat customers contributing £84.9 million, with increased profit margins up 30%.
Independent retail analyst Nick Bubb said: “It is a surprise that losses actually increased slightly, given new customer acquisition costs, but investors will be reassured to hear that sales are still increasing”.
To improve its offer, Naked Wines said it teamed up with 235 winemakers across 19 countries and also provided financial support to 36 of them through a five million dollar (£3.5 million) Covid relief fund.
Looking forward, bosses said they will be focusing their attentions on the US where the market is said to be worth 20 billion dollars (£14.1 billion).
Sales in the States hit £161.7 million, up 78%, driven by an increase in awareness and demand and boosts in order frequency from repeat customers.
In the UK, sales hit £133.1 million, up 66% for similar reasons, the company said.
Since the end of March sales have continued to grow – up 8% in April and May compared with a year earlier, despite tough comparisons as shops shut and households stayed indoors as the first lockdowns were imposed.
Compared with April and May in 2019, before the pandemic, sales are up 96% on a like-for-like basis.
Sales next year are expected to be between £355 million and £375 million, with £40 million to £50 million invested in winning new customers.
A similar amount is expected to be invested in strategic initiatives and bosses admitted they expect to see a slight fall in repeat customer profit margins.
Chief executive Nick Devlin said: “It is clear to us that the pandemic has served to underscore the value of our business model in connecting winemakers and consumers directly and proven the opportunity before us.”