More than 90% of Domino’s Pizza sales are now made via digital, with more than 40% taking place via its app, the food delivery company says as it reports half-year figures today.
The company now reports that 5.3m active customers now use its app, which accounts for 43.9% of system sales. That’s 3.1 percentage points higher than a year earlier. “App customers have a higher lifetime value than other customers, primarily due to higher levels of ordering frequency,” says Domino’s in its half-year statement today.
In March, the business introduced a delivery charge of between 99p and £2.50 – set at the discretion of franchisees – in order to enable them to offset the inflation they are seeing in both food and labour costs. It is also focusing on increasing collection rates – thus outsourcing delivery to the customer. In car collection was launched in 2021 and is now available from 444 shops, with a target of 500 by the end of 2022.
Domino’s has been working with Just Eat on a trial at an initial 136 shops to see if it can add incremental sales in a profitable way. That trial is now being expanded to a third of its store estate following “encouraging” early results.
It now gives its franchisees more support, though steps including the option of delivery charges, the launch of the Domino’s Training Academy for managers, a new store incentive scheme, and a new Android app for stocktaking.
The update comes as Domino’s today reports revenues of £278.3m in the 26 weeks to June 26 2022. That’s 0.2% up on the previous year. Total orders grew by 2.1% in the first half. Orders for delivery were 8.3% lower than the previous year – when lockdowns were in force but collections grew by 39.6% on last year and were also ahead of the same period in 2019. Pre-tax profits of £50.9m were 14.3% down from £59.4m a year earlier.
Dominic Paul, chief executive of Domino’s Pizza, says: “”I’m proud that in the first half Domino’s grew order count, attracted more customers, and increased underlying sales despite unusually challenging market conditions. This is testament to the hard work of our world-class franchisees and all our colleagues across the system, and I’d like to thank them all.
“The system is now fully aligned following the franchisee resolution in December. This enabled us to restart national price campaigns offering customers compelling value and to accelerate market share growth. We have worked really constructively with our franchisees to learn from the first half campaigns. We will be increasing our media spend in the second half compared to the first half, amplifying our value message to customers as we head into key events such as the men’s football World Cup. We are also continuing to acquire new customers by expanding our trial with Just Eat following positive initial results.”
Domino’s Pizza is not listed in RetailX Top500 research since it is not a retailer. However, as a digital-first multichannel food delivery business, its strategy is likely to be of interest to retailers. It sells online, via its apps and through 1,243 stores in the UK and Ireland, as of August 1 2022.