Domino’s has seen like-for-like sales in its UK stores grow 10.9% in the 26 weeks to 26 June.
System sales were up 16.9% in the company’s 899 UK stores during that period. Domino’s said like-for-like growth was driven by order volumes which were ahead by 8.3%, and average price per item, up 2.2%.
The group opened a record 30 new UK stores in the first half of the year, compared to 21 in the same period last year. Domino’s said its store roll-out programme had been particularly targeted at “splitting” stores, where a new store is opened within the territory of successful existing stores. 18 of the H1 store openings were split stores (H1 2015: 10). The group also focussed on low address count areas below 10,000. As a result average addresses per new store are now 26.7% lower at 14.8k addresses (H1 2015: 20.1k).
New store average weekly unit sales per address increased by 23.5% to £1.05 (2015: £0.85), almost completely offsetting the impact of the 26.7% reduction in addresses per store. Immature store average weekly unit sales increased by 11.2%, from £13,265 to £14,746.
The group has continued to improve its e-commerce platforms, investing an additional £1.4m compared to last year. In the UK, online sales now represent 81% of all delivered sales, up from 77% in the prior period. Mobile migration continues (app and mobile web site) and 13.2 million customers have now downloaded the Domino’s app (H1 2015: 10.0 million). Like-for-like online orders in the UK 18.6% ahead and average order value 2.0% ahead of the prior period. Mobile orders are 25.3% ahead and mobile order value 2.5% ahead of the same period last year.
The ‘basket’ composition has continued to evolve in the UK, as the group has focused on providing value-oriented, full meal solutions through bundle offers. On a like-for-like basis, pizza volumes are 7.4% ahead, side orders are 11.4% ahead, and dessert and drink volumes are 12.2% and 15.7% ahead of H1 2015 respectively.
The group saw franchisee EBITDA performance increase to 15.4% (H1 2015: 15.1%), which was achieved through increased sales and lower food prices, offset by investments in labour cost following the introduction of the living wage.
During the period, the group passed on savings in the region of £4m from lower food costs in dairy, meats and dough. The group has agreed the prices of its main food costs, except for dairy, well into the first half of 2017 and therefore does not anticipate any 2016 impact on its input prices as a result of the UK’s decision to leave the EU.
Chief executive David Wild, said: “Domino’s Pizza Group has made a very strong start to 2016 and this performance is reflected in today’s numbers. Our UK operations continue to perform extremely well and we opened a record 30 new stores in the first half. We continue to invest in and develop our e-commerce platform and we are pleased that mobile purchases are driving online sales across the system.
“Current trading is encouraging, boosted by the Euro 2016 championships; we have made a sound start to the second half on the year. We face tougher comparatives throughout the rest of the year, but I am confident we shall deliver another good performance right across the group.
“Our cash conversion remains very strong and today we can announce a significant increase in the interim dividend. We have delivered a very promising opportunity in Scandinavia and remain open to further international opportunities where we can deploy our know-how alongside carefully selected local partners.
”Recently we announced that Rachel Osborne will join the group as an executive director and the Chief Financial Officer of the Company, and we look forward to welcoming her to DPG after the summer. I would also like to thank the DPG team for their continued hard work and pay tribute to our franchisees whose tireless endeavours ensure that our customers continue to enjoy great pizzas with great service every day.”
