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Combination of digital and stores continues to propel UK growth at Domino’s Pizza

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Domino’s Pizza Group today reported rising UK sales as its business continued to move online at an “extraordinary” rate. 

The fast food delivery business said that the “speed of migration to digital ordering over the last five years has been extraordinary”. In 2018, it said, online orders represented 79% of orders by value, and 89% of delivery orders by volume. During the year it started to upgrade its commerce platform and app. 

Promotions remained important to customers in their decision to buy: 88.2% of orders were on some kind of promotion, discounting menu prices by an average of 38.6%. The retailer is now encouraging shoppers to collect their pizza through the use of deals, and says that sales for collection were up by 5.9% over the year. 

Revenues grew by 12.6% to £534.3m, after group system sales grew by 9% to £1.3bn in the 52 weeks to December 30, and UK and Ireland sales grew by 7% to £1.2bn. But pre-tax profits of £61.9m were 24% down on last time, after writing off £31.5m in one off costs. This total related to international businesses, investment in the UK supply chain (£9.5m) and the £2.9m cost of developing its new web and app platforms, set to go live in 2019. 

Chief executive David Wild said the year had been a mixed one as a result of ‘growing pains’ in its international businesses. The retailer aims to have 1,600 stores in the UK; as of December 30, the total stood at 1,103. 

Wild said: “In the UK and Ireland, which account for around 90% of the business, we extended our excellent track record of growth and cash generation, responding well to the very challenging environment for the casual dining market.  Our franchisees opened 59 new stores, creating more than 2,000 jobs and sold a record 102 million pizzas. We also continued investing for future growth in digital and by successfully completing our new Supply Chain Centre in Warrington, our most significant investment to date, which supports our target of 1,600 stores in the UK.

“Internationally, we have experienced some growing pains which have hampered our overall financial performance. These are all good markets, with more than 100 million population, good appetites for pizza and little, if any, global brand competition. This is why we have strengthened our management teams and are committing disciplined capital to support future development. We expect an improved performance from international, with the business targeted to break even this year.”

Image courtesy of Domino’s Pizza Group

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