How Domino's is dealing with disruption

UPDATE: The old-school pizza company is holding its own among tough young competition.

by Jack Torrance
Last Updated: 16 Mar 2016

Britain's takeaway food market is extremely competitive. From the low-cost kebab shops lining the high streets of almost every town to innovative new(ish) start-ups like Just Eat and Deliveroo, the UK's consumers have never had more choice over what form of greasy food to stuff down their necks.

So it's pretty surprising to see that one of its current star performers is a 30-year old company with pricey food, around 25,000 staff and more than 900 bricks and mortar stores. Domino's Pizza Group (the UK 'master franchise' of the US brand) is growing apace. Its ‘system sales from continuing operations’, which include revenues generated by its own and franchised stores, were up 15.8% to £877.2m in the year to 27 December and its pre-tax profit was up 15.1% to £73.1m.

The company attributes much of that good fortune to its investment in technology. Its ecommerce sales were up 30% over the year and now account for 77% of all revenues. Almost half (48.6%) of the company’s online orders came through its smartphone and tablet apps. It beefed up its online presence last year with the launch of a responsive website and a ‘one-touch order’ button on its apps to speed up the process, and promises that ‘more enhancements are planned for the year ahead’. Pizza lovers must be on the edge of their seats.

‘2015 was a terrific year for Domino’s Pizza Group; the UK performance was outstanding, reflecting continued investment in our e-commerce platform, said its chief exec David Wild. ‘Digital continues to be at the heart of our business, driving more customers and higher frequency of orders.’

The success isn't all down to Domino's own efforts of course. The company admitted that a rout in cheese prices had fattened its margins. And consumer confidence has been soaring over the last couple of years, hitting a 15-year high last August, according to market research firm GfK. It seems fair to assume that jolly customers are more likely to splash out £21.49 for a large pizza with a stuffed crust. Who’s for a Pepperoni Passion?

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