Domino’s has trimmed its pizza delivery times and outlined plans for 70 new UK stores this year. The chain is gaining momentum despite early challenges.
Reduction in Delivery Times
Domino’s has managed to cut its average delivery time to 24 minutes from April to June. This represents a one-minute improvement from the previous quarter.
According to CEO Andrew Rennie, the service improvement is significant, especially considering some competitors take more than twice as long to deliver.
Expansion Plans
The company plans to open 70 new branches across the UK this year. This move aims to bolster its presence and cater to increasing demand.
Despite a slow start to the year, Domino’s has been picking up momentum thanks to strategic initiatives and higher orders.
Financial Performance
Domino’s reported a slight increase in its underlying core profit, which reached £69 million in its half-year results.
Total orders were down 0.9% to 35.1 million for the first six months. However, orders picked up notably from May, increasing by 0.6% in the second quarter.
The company forecasts overall profit for the year to be between £144 million to £149 million, at the lower end of market expectations.
Impact of Euros Football Tournament
The Euros football tournament provided a boost to Domino’s sales, contributing to the company’s recovery.
Sales had been improving even before the tournament, demonstrating growing consumer interest and demand.
Strategic Decisions
Domino’s has decided to pass on cost savings to franchisees and customers through special offers, aiming for long-term growth.
This decision aligns with the company’s strategy to maintain a sustainable business model, even if it affects short-term profits.
Analysts have mixed reactions, with some praising the long-term focus and others concerned about short-term financial performance.
Market Challenges
Food costs are expected to fall, benefiting both franchisees and customers.
The company faces the challenge of maintaining growth and profitability amidst variable market conditions.
Despite these hurdles, CEO Andrew Rennie remains optimistic about the company’s prospects, citing brilliant value, quality, and service for customers.
Analyst Opinions
Investec analysts believe the profit guidance aligns with Domino’s long-term strategy.
Russ Mould from AJ Bell described the results as disappointing, urging a strong second-half performance to regain investor confidence.
Domino’s efforts to reduce delivery times and expand its UK presence are showing positive results. With strategic initiatives and a focus on quality, the company aims for sustained growth amidst market challenges.