Domino’s Pizza benefits from consumer spending cutback

The UK’s pizza delivery chain, Domino’s has benefited as diners are choosing a cheaper night at home rather than visiting restaurants and, as a result, experienced a 33% rise in first-half profits.

Like-for-like sales, which exclude revenue from new stores opened in the period, increased by 11.4% while total sales grew 20% per cent to £66.2 million. The group has opened 25 new sites already this year.

At the end of last month, the company traded from 526 stores in the UK, its plans are to double its portfolio by 2017.

Like other companies, the fast-food company has been hit by dramatic increases in food costs but has bucked the trend due to a strong performance in online sales which increased considerably to £25.3 million, up 85% compared with a year ago.

Online orders represented over one fifth of all delivered pizza sales. According to Stephen Hemsley, Domino’s chairman, the results were achieved in a considerably challenging trading environment.

The trend that we are seeing is that many consumers are staying at home and eating out less frequently, added Mr Hemsley.

Hemsley added that sales are growing in richer areas as wealthy consumers are choosing the take-away option rather than dining out.

New stores are trading strongly on opening and Domino’s is well placed to exceed market expectations for the year, concluded Hemsley.

In May this year, the company moved from AIM to the main market of the London Stock Exchange.

The pizza chain has been the sponsor of episodes of the renowned cartoon series, The Simpsons on Sky One for a decade and more recently, ITV’s Britain’s Got Talent.

Story link: Domino’s Pizza benefits from consumer spending cutback