Domino’s, the UK’s biggest pizza delivery chain, said that pre-tax profits soared to £18.7m in 2007, ‘topping’ the previous year’s figure by an impressive 33%. Revenues were up 23%, including a 15% jump in like-for-like sales. It opened 50 new stores, taking its UK total above 500 for the first time. And it’s also selling more pizzas online and by text message. Believe it or not, Domino’s now accounts for one in six of all home-delivered meals in the UK.
So it’s not surprising that new CEO Chris Moore (a Domino’s veteran) was sounding pleased with his lot today. He put Domino’s success down to good marketing and the dismal British summer (which persuaded the average punter not to brave the elements), while its new Meteor and Scrummy pizzas were both big hits. And he also insisted that improvements to service – right down to the speed of its pizza ovens – were central to progress.
Like most food producers, Domino’s saw the price of ingredients soar over the year. In fact, its cheese supplier even went out of business, while wheat costs also shot up. But it seems to have done a good job of passing these costs on to franchisees, who in turn have passed them on to you and me – and so far, we’re not complaining. Sales in the first six months of 2008 were 11% up on this time last year.
The results are particularly tasty given that Domino’s only actually employs 325 people. The rest of its 12,000 workers are employed by its 144 franchisees – all of whom have been selected because they want to run multiple stores, thus keeping the circle tight.
And the bad news for competitors is that Domino’s shows no sign of resting on its laurels. Not content with 500 stores, it’s now targeting 1000. It’s about to bring in a new store design to spruce up its outlets. And it’s invested in its supply chain by building new factories at Milton Keynes and Penrith.
In a home delivery market that’s worth £1.5bn and growing, there’s no question that Domino’s is currently the meatiest player. Even if it did sponsor Britain’s Got Talent...