Domino's reports strong first quarter trading

Domino's Pizza Group has reported strong sales and a 5.5% increase in total orders in a trading update for the 13 weeks to 27 March 2022

This was despite a strong comparative quarter last year when there were strict lockdown restrictions in the UK. Domino's collections business continued to recover and grew 45.4%, and across the quarter was at 95% of 2019 levels.

As expected given the lockdown last year, delivery orders were 4.5% lower than the prior year, although active customer growth increased 4% compared to the same period last year.

For the quarter, the VAT rate on hot takeaway food was 12.5%, compared to 5% in Q1 FY21. Consequently, UK and Ireland system sales were £365.9m, down 1.5% on the first quarter of last year.

The business has opened nine stores this year by seven different franchisees, and remained on track to open at least 45 further stores this year, which would represent an increase of around 4% against the 2021 year-end store count of 1,227.

The group said it expected underlying earnings for the financial year to be in line with market expectations.

Chief executive Dominic Paul said: "Our ambition is to consolidate our position as the nation's favourite pizza brand and believe the time is now right to see whether we can reach an even broader customer base. On this basis, we have also commenced a trial which will enable customers in a small number of locations across the UK and Ireland to order Domino's via the Just Eat platform but delivered by Domino's drivers, making the most of our unrivalled network of best-in-class delivery drivers.

"It's no secret that inflation is a key challenge for everyone at the moment and the current consumer environment is challenging, but our scale and integrated supply chain, as demonstrated in the Covid downturn, mean Domino's is well-placed to navigate the current conditions. What's more, at a time when family budgets are under pressure, Domino's remains an affordable treat everyone can enjoy, and we're redoubling our focus on offering our customers the best possible value this year."

Domino's Pizza Group holds the master franchise agreement to own, operate and franchise Domino's stores in the UK and Ireland, with 1,236 stores.