Domino’s Pizza Posts Strong Results

Posted on 10 April, 2013 by Kirsten Kennedy

The UK’s most successful pizza company has once more posted strong quarterly sales, cementing its dominant position in the fast food industry. Promotional activity and improvements to services played a huge role in Domino’s rise to the top – an element that still works in drawing increasing numbers of customers to the brand.

Domino’s managed to meet the poor weather head on with a 6.6 per cent rise in like for like sales during the first three months of 2013. Altogether, the firm managed to rake in sales amounting to £164 million in the 13 week period to the 31st of March.

A large part of the boom in business is due to the online ordering process, which increased hugely in popularity in the first quarter. More than half of Domino’s delivered sales were ordered online – 61.9 per cent to be precise – compared to the 49.8 per cent total recorded at the same time last year.

An increased consumer interest in technology, including apps, helped to push overall online platform orders up by 38.4 per cent to £82.4 million.

Lance Batchelor, chief executive of the firm, announced that the successful first quarter meant full year results are “in line with market expectations for 2013.” However, he stated that complacency was not an option for the company given the economic situation.

He said; “New product launches, a relentless focus on service, industry leading online technology, an ever growing market budget and a healthy pipeline of new sites are just some of the ways we continue to drive this terrific business forward.”

While Mr Batchelor will be keen to curb excessive spending, this will not slow the chain’s relentless expansion programme in its key markets. Currently, Domino’s is present in the UK and Ireland, Germany and Switzerland – and will be expanding its interest in commercial property acquisitions over the coming year in order to offer new franchises.

In the UK and Ireland, for example, there are 780 Domino’s stores at present, with a further 60 branches expected to be added to its UK portfolio by the end of 2013. Last year, the pizza chain opened 56 stores in the UK, indicating the strengthening consumer base it controls.

Germany has only 20 takeaway outlets at the moment, but Mr Batchelor indicated that Domino’s will be doubling this number at least in the next 9 months. Switzerland, meanwhile, is currently undergoing store changes and staff retraining programmes in order to attract more customers.

With business going from strength to strength and an ever-growing number of consumers choosing Domino’s over more established fast food chains, it’s fair to say that their rivals may not be “lovin’ it” at present!

Do you think Domino’s should be taking advantage of their fortuitous position at present and implementing a programme of rapid expansion, or would saving capital as a reserve for later on in the year be a wiser decision?

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