Domino’s dishes up sales surge as lockdown boosts delivery demand

Domino’s Pizza has seen sales surge by nearly a fifth over its first quarter as “exceptional” demand for takeaways jumped during lockdown.

The takeaway chain reported an 18.5% hike in UK and Ireland like-for-like sales – excluding stores opened near another outlet in so-called split territories – for the three months to March 28.

Domino’s, which is holding its annual general meeting for shareholders on Thursday, said overall UK and Ireland system sales were 18.7% higher at £371.3 million.

“Trading in the first quarter has been strong, with exceptional trading over the new year period,” the firm said.

It hailed the success of its delivery service, with orders rising 6.8%, which helped offset a hit to collection business amid the lockdown.

WATCH: Deliveroo doubles Q1 orders, seeks IPO redemption

The group said collections were seeing some recovery, now trading at around 65% of pre-pandemic levels.

Dominic Paul, chief executive of Domino’s Pizza Group, said: “We are pleased with the strong performance of the business in the first quarter of the year.

“The investments we are making to deliver our multi-year strategic plan give us confidence in our ability to capitalise on the opportunities which lie ahead as the nation begins to emerge from the Covid-19 lockdown restrictions.”

Domino’s recently announced plans to withdraw from wholly owned and directly operated international markets and said it had agreed deals to offset businesses in Sweden and Iceland, which are set to complete by the end of May.

The move comes as part of a plan to focus on its core UK and Ireland business.

Shares in Domino’s fell 2% after its update as analysts said the update signalled ongoing declines in order numbers at the chain.

Wayne Brown, at Jefferies, said: “Order count decline has improved slightly, but still remains mid-single digits negative.”

Domino’s is also still working to appease its franchisees after years of acrimony between the business and its operators.

Last month, it unveiled a series of goals as part of a plan to grow the business and “reset” its relationship with franchisees.

It is hoping to get them on board with targets for long-term growth, including another 200 new stores and a widespread drive-thru service to boost flagging collection sales.

The firm is hoping the plans will help it hit sales of £1.6 billion to £1.9 billion over the medium term.

But some experts remain sceptical and Domino’s growth is still lagging behind rivals such as Deliveroo and Just Eat.

“With no restart of national campaigns, we find it hard to see how the growth targets will be achieved,” said Mr Brown.

WATCH: Will Interest rates stay low forever?