Pandemic costs Virgin Wines £800,000 in revenue loss

Labour shortages brought about by the pandemic cost UK online wine retail company Virgin Wines £800,000 of direct to consumer sales in the Christmas season. The firm had to change its cut-off time for delivery by Christmas thanks to staff illness and self-isolation.

“The effect of the labour shortages was that the business had to ‘cut off’ for Christmas delivery two days earlier than planned to ensure all customers received their orders, negatively affecting sales by approximately £800k,” the company said in its trading update this week. However, it said the group had “largely been able to mitigate these pressures through highly efficient marketing, disciplined customer acquisition and strict control of costs”.

For the first half of the financial year ending 31 December, Virgin Wines’ revenues were £40.5 million, up 55% on H1, 2020-21. Amongst the figures, subscription accounted for 79% of direct to consumer sales in that period, up from 69% in the previous year. Thanks to uncertain trading and a number of headwinds impacting costs, the company has warned that revenue and profits will be below market estimates.

Jay Wright, chief executive officer at Virgin Wines, said: “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.”

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