Majestic Wine, Britain’s biggest wine warehouse group, said today that a 6.4 per cent fall in sales of champagne, led by a cutback in corporate spending, has hit profits.

Pre-tax profit for the six months to September 30 was down by 25 per cent to £5.6 million.

“Customers have not had much to celebrate over the past six months and business customers have not been doing as much entertaining,” Steve Lewis, Majestic’s chief executive, said this morning.

“When times are tough people don’t want to be seen drinking champagne as much.”

Majestic was saved from the downturn last year by a surge in sales of premium wines. Following on from last year’s increase in top-end wines, sales of bottles of more than £20 increased by 10.7 per cent. The chain plans to open a dedicated fine wines section in 53 of its stores.

But Britain’s increasingly sophisticated palate was not enough to save Majestic from a 2.1 per cent decline in overall like-for-like sales. Total sales, including new stores, rose by 3.7 per cent to £94.1 million.

Spending plummeted even further in the five weeks to November 3, as consumer confidence took a hit from the intensifying financial crisis.

The average price of a bottle of wine increased from £5.85 to £6.19, while average spend increased to £135 from £128.

Majestic's shares fell 11.5p, or nearly 8 per cent, to 136.50p this morning.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax