Domino's Pizza takes a bigger slice of profits but sales growth lags

 
Alys Key
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Dominos Pizza Files To Go Public
Two thirds of Domino's orders are now placed online (Source: Domino's)

Domino's Pizza Group reported growth in the first half of the year, but spooked investors with sales growth that was slower than the rate of expansion.

The figures

Sales for the whole group were up 10.5 per cent to £546.5m, although this included the addition of the Nordics area, which added £14.9m in sales.

Pre-tax profits also grew by 9.1 per cent to £44.6m.

In the UK and Ireland, sales were up 7.3 per cent to £522.7m compared to the same time last year.

But analysts at Librerum pointed out that 3.5 per cent growth in the number of orders the lagged behind the 6.5 per cent rate of store expansion.

Shares fell by over six per cent this morning.

Read more: Restaurants and cafes now take up one in five retail units

Why it's interesting

A stalwart of food delivery, Domino's faces competition from the likes of Deliveroo and Uber Eats.

The company has countered this by pushing its technology offer, seeing an average of 73 people using its app every minute, rising to 916 during peak hours. Today also marks the launch of Domino's ordering via the Amazon Echo. Two thirds of orders were placed online.

But analysts were concerned today by the rate of expansion. Domino's plans to open 90 stores in the UK this year, having added 40 so far. Yet order count growth has been comparatively slower.

However, today's announcement also promised a £4m investment in improving value and a new advertising campaign, which is thought to be aimed at addressing the disparity.

Read more: Delivery apps have turned us into a nation that prefers nights in

What the company said

Chief executive David Wild said: “Whilst we acknowledge that our UK consumers are currently more cautious about the economic outlook, we’re focussing on growth investment with our franchisees; boosting marketing; improving customer engagement and enhancing our leading position in food delivery."

The group also revealed that the most popular day for ordering a pizza was the May Day bank holiday, when more than a million pizzas sold across the country.

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