London, June 16 - Britain's Majestic Wine Plc belied the high street gloom with like-for-like sales up 4.4 percent in the past six weeks but said it would raise prices by at least 10 percent this year to recoup higher duties and currency costs.
"Over the course of the year we will see prices rising by around 10 percent unless we see the pound strengthening again, which would allow us to reduce our prices ... but I'm not forecasting that," Tim How, the company's outgoing chief executive told reporters on a conference call on Monday.
Britain's largest wine warehouse chain said on Monday the average price per bottle of wine had increased to 5.98 pounds from 5.75 pounds last year, and Howpredicted that "six- or seven-pound bottles of wine will be going up by nearer a pound".
Majestic delivered an in-line annual pretax profit of 16.7 million pounds, 3.4 percent higher than last year, on sales up 3.1 percent at 197 million, driven by growing demand for fine wine priced at 20 pounds and above.
Customers now spend on average 133 pounds per transaction, up from 123 pounds last year, with French wines from the Bordeaux, Loire and Beaujolais regions proving popular, along with wines from Italy, Argentina and New Zealand, the company said.
Majestic's French business saw profits fall 0.3 million to 1.5 million pounds due to the weakness of the pound against the euro, while like-for-like UK sales edged up just 0.8 percent in the 10 weeks to June 9, largely down to inflation-busting increases in duty rates.
However, sales have picked up since April and How said the group was "well positioned for future growth" in what is a highly competitive market.
"Given the momentum in trading and the positive outlook, despite challenging conditions, we leave our forecast unchanged at this early stage in the year," said Shore Capital analyst Clive Black in a note.
Shares in the company were up 1 percent to 201.75 pence by 1025 GMT, valuing the group at around 125.2 million pounds.
Majestic, which now runs 144 stores, opened 10 new outlets last year and hopes to match that figure in the coming year.
"We expect to open nine or 10 new stores this year and continue our re-site programme. It will probably take us five years to get to the 200 store mark," said How.