Omicron dents Virgin Wines’ Christmas performance
Staff absences, freight disruption and inflationary pressures caused by the Omicron variant as well as macroeconomic headwinds took the shine off Christmas for Virgin Wines.
The online retailer said in a trading statement for the six months to the end of December that the effect of labour shortages meant the business had to ‘cut off’ for Christmas delivery two days earlier than planned, negatively impacting sales by approximately £800,000.
Elsewhere, Virgin Wines reported total H1 2022 sales of £40.5m, “in line with the previous year’s performance” and up 55% versus H1 2020. The company’s WineBank membership was up 11% on H1 2021 and rose 41% compared to the same period in 2020.
“As expected, the trading environment has evolved considerably over recent months, and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control,” said CEO Jay Wright.
He said customers acquired during lockdown “continue to perform strongly”.
“We were delighted to ship more than seven million bottles of wine during the period and to deliver sizeable growth in our customer base with strong levels of customer conversion and retention,” he added. “Despite current headwinds we look forward to the future with optimism. We have a range of leading consumer propositions with more and more people experiencing the benefits of buying delicious, great value wine online through our subscription models. We also have strong growth in our commercial channel and a clear strategy for continued long term, profitable growth.”
The company said full-year revenue and profit is expected to be "slightly below" forecasts.