Domino’s Pizza Group (DPG) may consider partnering with further delivery aggregators in the future, following its national rollout on the Just Eat platform, according to interim CEO Elias Diaz Sese.
Diaz Sese, who was appointed in September, spoke during an investor call following the release of Domino’s Q3 FY22 trading update yesterday (10 November). The pizza chain reported like-for-like (lfl) sales up 2.4% on Q3 FY21 and system sales up 19.6% compared to the same period in 2019.
“We’re seeing customer growth of almost 3%,” Diaz Sese said, commenting on the Just Eat rollout. “The results before the World Cup have been promising, and this Q4 momentum will be carried into next year.”
The chain further reported delivery was down 12.7% on Q3 FY21, while collections were up 28.1%.
“We expected tough comparatives post-Covid, but even after the situation has normalised, we believe we’re still competitive,” Diaz Sese said. “The first reason is value and value campaign messaging. The second is service – we’re delivering directly to customers and that provides a competitive advantage.”
In addition, lfl system sales were up 10.4% in the first six weeks of Q4.
“Just Eat will continue to deliver results, while collection as a pillar will be even more important next year and in 2024,” Diaz Sese added. “We’ve invested much more in marketing as well.
“We’re focused on Just Eat right now but may look to other aggregators in the future.”
The introduction of an approximately £2 delivery charge has incentivised a rise in collection and propped up margins for franchisees, as well as maintained Domino’s edge over its competitors, according to Diaz Sese.
“Our delivery charge is cheaper than many competitors. It was the right thing to do from a strategic point of view and is helping us bring our value message.”
With continued increases in the number of orders through the app – now more than 45% of system sales, up from c34% in 2019 – a renewed focus on digital will further carry Domino’s into the next financial year.
New store openings will also contribute to momentum in Q1, with c70 openings expected by the end of FY23. In addition, increased spend on digital is intended to help drive operational efficiencies.
“One-third of our franchise partners are willing to open more stores, despite the delay from a planning and permit perspective,” Diaz Sese continued. “We’ll have a strong Q1 as a consequence.
“Our results are a combination of both price and volume.”
