Majestic Wine's pre-tax profits are unlikely to recover this year as companies continue to slash their expenses, according to CEO Steve Lewis.

Highly profitable sales to businesses had plummeted with no signs of picking up, said Lewis. Pre-tax profits were down 56% to £7.4m.

"From the middle of September we saw a real collapse in sales to large corporates, which accounted for 25% of our turnover," he said. "Every finance director in the country has put a red line through entertaining ."

Wine and Beer World, Majestic's French business in Calais and Cherbourg was also hit, but sales to consumers of good value mid-range wines from New Zealand, South Africa and Argentina were holding up.

Overall sales increased by 2.4% to £202m with like-for-like sales positive since Christmas, he added.

Analysis, p14