Lockdown costs eat into profits at Domino’s Pizza

Domino's Pizza

An increase in sales during the national lockdown has been more than offset by “considerable additional costs”, Domino’s Pizza Group warned yesterday.

Sales are up 5 per cent in Britain since Covid-19 restrictions were imposed in March, despite in-store collections, which typically account for a fifth of sales, having been halted.

While it is starting to reintroduce collections, the company said that this side of its business — usually the source of almost a third of orders in the UK — would “take some time to recover to prior levels”.

Domino’s Pizza, which made its British debut in Luton, Bedfordshire, in 1985, holds an exclusive master franchise for the American pizza brand in countries including Ireland and Switzerland. It has more than a thousand outlets in Britain. Yesterday it said that comparable UK sales had risen by 2.3 per cent between December 31 and March 22 and by 5.1 per cent between March 23 and June 14. Customers bought more side orders and desserts, increasing sales but denting profit margins.

The company said that changes to its operations to ensure that it could continue trading during the lockdown “meant that we have incurred considerable additional costs”, denting earnings in the first half. It pointed to changes to its menus and alterations to supply chains.

Shares in the business fell 25¾p, or 5.8 per cent, to 319¼p.

Dominic Paul, former managing director of Costa Coffee, joined the company as chief executive in April. It had sought to fill several senior posts for months as it grappled with deteriorating relations with large franchisees and mounting losses in its international operations.