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Dan White: We're eating more pizza than ever before. With €100m up for grabs the chains are battling for the biggest slice of the action

The Irish, it seems, can't get enough pizza. As the recession bites ever deeper and restaurant visits become a fast-receding memory, we are tucking into more pizza, both home- delivered and frozen, instead.

The Irish home-delivered pizza market is reckoned to be worth close to €100m a year with the frozen pizza market worth a further €70m. That's a belly-busting €170m of pizza that we munch our way through every year.

The three 800lb gorillas of the Irish home-delivery pizza market are US chains Domino's and Pizza Hut, which bought Irish chain Godfather's Pizza in 2008, and the Irish chain Four Star. Domino's has 46 outlets in the Republic of Ireland, Pizza Hut 35, while Four Star has 41 stores, 35 in the Republic and six in Northern Ireland.

While full figures aren't available for the Irish home-delivery pizza market, Domino's Pizza UK & Irl, which owns the Domino's master-franchise in both the UK and Ireland, does strip out the performance of its Irish outlets.

The most recent DPUK&I annual report shows that Domino's had sales in the Republic of Ireland of £13.68m (then worth about €15m) in 2009 and that it earned pre-interest profits of £3.04m (then worth €3.35m) on those sales. This means that Domino's operating margin in the Republic was a mouth-watering 22pc last year.

Domino's Irish sales increased by 5pc in 2009 while its pre-interest profits rose by about 3.5pc.

Since then the pace of expansion has accelerated with a 12pc growth in sales to £9.09m (€11m) and a 25pc increase in pre-interest profits to £2.13m (€2.58m) for the first half of 2010. This means that Domino's Irish operating margin is now a positively obese 23pc.

In 2006, Domino's Tallaght store became the first one of its 3,000 outlets anywhere in the world to break the $3m (then worth €2.35m) annual sales barrier. If you have some time to spare on a Friday evening you could do worse than go to Domino's Tallaght store and order a take-out pizza.



CRASH

While you are waiting for your pizza you can marvel at the sight of dozens of orders flowing in by phone and email every minute, the speed with which those orders are processed and the ability of the staff to correctly match all the individual fresh pizzas emerging from the ovens with every one of those orders.

It is a 15-minute crash course in the modern service economy.

Four Star Pizza doesn't publish its financial results, but according to its most recent Companies Registration Office filings, the company lost €83,000 in 2008. Majority Four Star shareholder, accountant Anthuan Xavier, has said that the company's sales were up 2pc to approximately €20m in 2008.

Competing with the big boys are several smaller pizza delivery chains including Mizzoni's and Apache Pizza as well as a large number of independents with one or two outlets each.

It was probably inevitable that Domino's outstanding success in the Irish market would attract other overseas pizza chains to this country. While American chain Papa John's opened its first Irish outlet as far back as 2004, only two of its existing 23 outlets in the Republic of Ireland are located in the greater Dublin area while 12 of them are situated in Connacht.

That's going to change and quickly. The company has announced plans to quadruple the number of its British and Irish stores from the current total of just 120 to 500 within five years. The good news for consumers, with all of the major chains seeking to grow their share of the Irish home-delivered pizza market, is a long-overdue outbreak of competition. Every day seems to bring a leaflet from one or other of the pizza chains dropping through my letter box promising me a bargain calorie-fest.

My advice is to shop around. Be ruthless at exploiting offers. With the kind of margins they are earning, they have plenty of room to cut their prices.


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