Domino’s Pizza UK & Ireland, the pizza delivery firm, has reported a 4.2% increase in like-for-like sales in the 13 weeks to 27 March 2011, with on-line sales up by about two thirds on the same period last year.
Sales increased by 11.2% to £132.3m and like-for-like sales in 607 mature stores increasing by 4.2%. In 2010, sales growth was 10.5% in 553 mature stores.
“This growth is set against a backdrop of high comparatives, including the early impact of our very successful Two for Tuesday promotion, and emphasises the company’s resilience in a particularly challenging consumer environment,” the firm said.
However, growth has been hit by “deteriorating” trading conditions in Ireland.
Like-for-like sales at UK stores, which account for 92.6% of its business, were up 5.5%, compared to a fall of 10.5% at outlets in the Republic.
“Consumer spending in the UK with Domino’s Pizza was even stronger if the VAT increase is taken into account,” the company added.
Total online sales for the period were up 62.9% to £41.3m (2010: £25.3m). Online sales also accounted for 39.3% of UK delivered sales in the 13 weeks, compared to 28.8% in 2010.
“In addition, Domino’s now has over 160,000 Facebook fans and more than 5,000 Twitter followers, demonstrating the loyal customer following it has developed,” the firm added.
Eight new stores opened in the period, the same number as opened in the period for 2010, one was temporarily closed pending relocation and there are “a large number of sites in the pipeline”. “The company is confident of achieving the target of 60 new stores during the full year.”
The firm said operational gearing “remains strong, underpinning the financial strength of the company”. The company bought back and cancelled 400,000 shares at a cost of £1.8m during the period, and its intention is “to continue to return surplus cash to shareholders going forward”.
Chief executive Chris Moore said: “We are glad to be reporting a good performance in the UK, where like-for-like gross sales were up 7.8% in the first 13 weeks, if the VAT increase was taken into account.
“The overall group numbers were, however, held back by the very difficult trading environment in the Republic of Ireland which contributes 7.4% of our system sales. However, as a company we are rarely satisfied with just a good performance and we have some exciting new products and marketing initiatives lined up to lead the charge for the rest of the year.
“We are up against some very challenging comparatives for the rest of the year, especially in the second quarter. However, with the management team that is in place, the ideas flowing through the business, new sites in the pipeline and our ever improving operational gearing, the business is well placed for further strong growth this year.”
