Majestic Wine has reported a dramatic near-halving of its annual profit, directly attributing the slump to tax policies introduced by Chancellor Rachel Reeves and the post-election economic climate.
Financial Results Under Pressure
The Watford-based wine retailer filed accounts showing its pre-tax profit was cut from £14.3m to £7.7m for the year ending 31 March 2025. This sharp decline occurred despite a marginal increase in revenue, which edged up from £385.4m to £386.2m over the same period.
In a statement signed off by the board, the company said the "economic environment became more challenging" during the financial year, particularly after the July 2024 general election and the subsequent Budget in October 2024.
Pointing the Finger at Government Policy
The retailer outlined a series of government-led factors it believes damaged consumer confidence and squeezed disposable income. These included uncertainty over the new government's tax policy, elevated mortgage rates, and increases to the National Minimum Wage.
A significant point of contention was the "new and highly complex" alcohol duty regime. Majestic Wine stated that implementing the changes required additional IT investment and came on top of what it called the largest duty increase in 50 years, implemented in August 2023.
"This all contributed to a more fragile consumer confidence, impacted by cost-of-living concerns," the board's statement explained.
Additional Challenges Beyond Westminster
While government policy was highlighted as a primary cause, the company also noted other issues affecting its performance. The timing of Easter falling outside its financial year impacted sales.
Furthermore, "unseasonal cold and wet weather" during the Spring and Summer of 2024 was blamed for negatively affecting sales of bulk party wine and rosé.
Majestic Wine is owned by Fortress Investment Group, a US-based entity whose UK portfolio also includes Punch Pubs and Poundstretcher. The filing with Companies House provides a stark insight into how national fiscal policy and consumer sentiment are impacting major retail chains.
