Tesco weighs bid for struggling Majestic Wine Group
Tesco is considering whether to submit a bid for Majestic Wine Group, the UK’s largest wine retailer, after its private equity owner put the company up for sale this year. The supermarket chain is among several potential buyers vying for the business, though neither Tesco nor Majestic has acknowledged their involvement, according to industry sources.
The sale process began when Fortress Investment Group, the U.S.-based private equity firm that bought Majestic in 2019 for £95 million, initiated the listing. The decision followed Fortress’s earlier separation of Majestic from Naked Wines, the online wine subscription service acquired in 2015 for £70 million. Naked Wines remains publicly traded, with a current market valuation of £41 million.
Majestic operates more than 210 stores across the UK, selling wine and beer directly to consumers while also running a wholesale division that supplies bars and restaurants. The company also owns Vagabond, a chain of wine bars. Since Fortress took control, Majestic’s annual sales increased by one-third, reaching £386.2 million in the fiscal year ending March 2025. However, profits dropped sharply to £7.8 million, as higher costs from government taxes and policy shifts, including increased national minimum wage rates, cut into earnings.
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A successful bid would allow Tesco to expand into the wine and spirits sector, reinforcing its leadership in UK grocery retail. Tesco holds about 28 per cent of the UK grocery market.
Tesco’s acquisition strategy has evolved in recent years. After an accounting scandal in 2014 led to the sale of non-core assets like Dobbies, its garden center chain, and Harris + Hoole coffee shops, the retailer shifted focus. In 2023, it acquired Paperchase, the stationery brand, from administration. Additionally, Tesco invested £20 million in Bramble Partners, a fund specializing in supply chain innovation, signaling a broader commitment to strategic investments.
