Cheap cheese slower ovens and better service help Domino’s Pizza profits rise
Domino’s Pizza said rock bottom cheese prices helped the fast food chain rack up double-digit profits last year. The group, which has over 869 stores in Britain, said pre-tax profits jumped 20% to £59.3 million in the year to December 27 compared to a year ago, helped by lower costs for fuel, wheat and “a record-low cheese price”.
It said last year it was able to save £11 million on food costs alone, primarily on cheese and dough. The business added that “food costs remain benign going into 2016”.
The firm said that like-for-like sales hit 11.7% over the period, while its online operation now accounted for 77.7% of all sales from deliveries, up from 70.8% a year ago. Its app service now accounts for 48.6% of all online sales.
The group opened 61 stores in the UK last year, adding that its UK business had now produced nine successive quarters of double-digit like-for-like growth.
It said the business continues to innovate, last year introducing the Tikka Pizza and reintroducing the hot dog stuffed crust.
The firm said the first nine weeks of its new financial year had got off to a “good start” with like-for-like sales hitting 10.5%, against tough comparatives.
Chief executive David Wild said: “2015 was a terrific year for Domino’s Pizza Group; the UK performance was outstanding, reflecting continued investment in our e-commerce platform.”
“Our strategy remains simple and clear. We aim to be the number one pizza company in each neighbourhood in which we operate.”
Apart from the UK business, Domino’s Pizza also owns the franchises in the Republic of Ireland, where it has 47 stores, and Switzerland, where it has 15, as well as Liechtenstein and Luxembourg.
Analysts at Numis said due to strong sales from new stores in the UK it has upgraded its 2016 pre-tax profit forecast by 3% to £80.6 million.