Domino’s Pizza benefits from Britons eating in as inflation bites
Domino’s boss David Wild said the firm has benefited since the Brexit vote send the pound plummeting and inflation rocketing.
Domino’s Pizza served up soaring UK sales last year, with cash-strapped diners ordering food in rather than eating out to mitigate the impact of Brexit-fuelled inflation.
The takeout chain’s group system sales rose 15% to £1.18 billion in 2017, helping underlying profit lift 10.2% to £96.2 million.
Revenue rose 29.3% to £474.6 million, although pre-tax profits nudged down from £82.5 million to £81.2 million after it was hit by exceptional costs.
Domino’s boss David Wild told the Press Association the firm has benefited since the Brexit vote sent the pound plummeting and inflation rocketing.
“There’s no doubt that the first thing you cut down on is eating out when you have less money to spend.
“With Domino’s, you don’t need to cook and you can also save on alcohol. The eating-at-home market is buoyant because of economic pressures on consumers,” he said.
The eating-at-home market is buoyant because of economic pressures on consumers David Wild, Domino's chief executive
The pound’s collapse has seen costs for businesses soar while also pushing prices up for hard-pressed consumers.
This has taken its toll on the casual dining sector, with the likes of Byron, Prezzo and Jamie’s Italian all shutting large swathes of their store estates recently.
Like-for-like sales at Domino’s slowed from 9.8% to 4.8%, with the company saying consumers are “more cautious and value-conscious”, as incomes are squeezed as “wage inflation lagged broader cost inflation”.
In the UK and Ireland, system revenue rose 9.2% to £1.1 billion as Domino’s pointed to strong sales around TV shows The X Factor and Strictly Come Dancing, as well as major sports events such as Floyd Mayweather beating Irishman Conor McGregor in boxing.
In Scotland, the busiest day of the year was St Valentine’s Day.
This year Domino’s plans to open up to 75 new stores, creating 2,500 jobs in the process.
It will also open a new supply centre in Warrington.
Mr Wild added: “2017 has been a year of significant progress for Domino’s, despite the weaker consumer demand and cost inflation affecting the sector.
“Given this backdrop, I am particularly pleased with our performance. In the UK, system sales broke through £1 billion for the first time, helped by a record 95 new store openings.”
Shares were up more than 5% in morning trading to 334p.