Domino’s Pizza has reported higher profits in the UK and unveiled plans for more outlets and drive-thru services, as the Covid-19 pandemic prompted more people to order meals, especially over the festive period and during televised government press conferences.
Britain’s biggest pizza delivery chain reported an underlying pretax profit of £101.2m for the year to 27 December, up from £98.8m the previous year. It recorded sales of £1.35bn, up 10.3% on a like-for-like basis.
The profit figure includes £9m of Covid-19-related costs such as face masks and contact-free delivery boxes. The company designed a new platform box that pizzas and other food are placed on and left on customers’ doorsteps.
Domino’s said strong growth in pizza delivery offset a big drop in collection from its outlets. The first full week of the first national lockdown last March was the biggest week of the year for delivered orders – 2m pizzas. The company also reported big spikes in orders at the time of key government press conferences.
This year has started well, with Domino’s enjoying its highest-ever sales week around new year. On New Year’s Eve, when bars and nightclubs were closed and people had to stay home, 14 pizzas were sold every second.
Its beef doner pizza, launched in mid-November for a limited time, is the company’s most popular new product to date. Domino’s new vegan range has also been successful, with nearly 430,000 pizzas and more than 320,000 dips sold since September.
The pandemic has sparked greater demand for comfort food and takeaways, as people spend far more time at home amid a shift to home working. Domino’s said more orders were being placed before children’s bedtime, between 4pm and 7pm. More customers are also ordering pizza on weekdays than before.
The firm plans to add 200 new outlets to its 1,201 stores, most of which are run by franchisees. To revive its collection business, it aims to offer drive-thru services at 450 outlets by June, up from 189 now, at stores that have a car park or are near one. Customers order on the app, drive to the store and Domino’s will deliver the pizza to the car.
Domino’s faces growing competition from food delivery services such as Deliveroo, which is about to float on the stock market. However, Dominic Paul, the former boss of Costa Coffee who became Domino’s chief executive in May, said competition was helpful because it meant more households are using deliveries, as long as the company continued to come up with new products.
Russ Mould, the investment director at the stockbroker AJ Bell, said: “Domino’s needs to address the threat of growing competition from non-pizza operators. The rise of food ordering apps from Just Eat and Deliveroo mean it is just as easy to order a McDonald’s or a Chinese meal as it is to shop with Domino’s.”