Virgin Wines sees sales fall in latest trading update
Virgin Wines has reported a drop in revenue for the six months ending December 31, 2022.
The online retailer said yesterday that total revenue for the period was £33.7m, down from £40.5 million in the same period a year prior.
The company blamed several factors, including the cost of living crisis, bad weather, postal strikes and its implementation of a new warehousing system. Virgin also said September sales were significantly affected by the pause on all marketing activities following the death of the Queen – with an estimated impact on sales of around £1.7 million.
Elsewhere the company said it continues to attract new customers, while the same number of existing WineBank customers purchased in H123 as in H122 (83,500).
Jay Wright, chief executive officer at Virgin Wines said: “We are disappointed with our profitability performance over what has been a difficult trading period, which has been exacerbated by one-off exceptional circumstances. However, our underlying business model remains resilient as the consumer proposition continues to resonate strongly.
"We are pleased to have attracted a significantly increased number of new customers onto our WineBank scheme, our strategic partnership with Saga has started promisingly and our other commercial partnerships continue to perform well. Whilst being mindful of the pressures on the business, especially with regards to the high inflationary landscape, we remain confident in our future prospects, driven by the ongoing strength of the brand, our unique offering and loyal customer base.’’
Analysts at Davy Research described the results as clear reflection of the “severe economic, political and commercial challenges facing the UK”.
“We retain belief in VINO’s model over the long term but expect current pressures to continue in the near term,” the team at Davy continued.