Domino’s welcomes strong trading in Q1

Domino’s has welcomed a period of strong trading in its first quarter, with like-for-like system sales, excluding splits and the impact of higher VAT, rising 3.9% in the period ended 27 March 2022. 

Orders grew by 5.5% in the quarter despite a strong comparative, reflecting the “stimulus” to its delivery business last year from lockdown restrictions. 

In addition, order count growth was driven by the recovery of collections, which rocketed 45.4% in the quarter, and across the quarter were at 95% of 2019 levels. 

In light of the lockdown comparator, delivery orders were 4.5% lower than the prior year, “as expected”, yet active customer growth continued its momentum and increased 4% compared to the same period last year.

For Q1 FY22, the VAT rate on hot takeaway food was 12.5% compared to 5% the year before. Domino’s said that as a result of the higher rate of VAT in the quarter, UK and Ireland system sales were £365.9m, down 1.5% on the first quarter of last year. 

Excluding the impact of the increase in the VAT rate, system sales increased 4.9% in the quarter however. Like-for-like system sales, excluding splits, were down 2.4%, again reflecting the higher rate of VAT in the quarter.

Dominic Paul, CEO, said: “We have momentum in the business with growth in order count and customer numbers, and are continuing to work closely with our Franchisees following our resolution late last year. Our first national price campaign in a number of years has been a great example of what we can achieve when we work together.

“Our ambition is to consolidate our position as the nation’s favourite pizza brand and believe the time is now right to see whether we can reach an even broader customer base. On this basis, we have also commenced a trial which will enable customers in a small number of locations across the UK and Ireland to order Domino’s via the Just Eat platform but delivered by Domino’s drivers, making the most of our unrivalled network of best-in-class delivery drivers.”

He added: “It’s no secret that inflation is a key challenge for everyone at the moment and the current consumer environment is challenging, but our scale and integrated supply chain, as demonstrated in the covid downturn, mean Domino’s is well-placed to navigate the current conditions. 

“What’s more, at a time when family budgets are under pressure, Domino’s remains an affordable treat everyone can enjoy, and we’re redoubling our focus on offering our customers the best possible value this year.”