Lockdown sees Domino’s sales surge, but costs hit profits

Domino’s Pizza has seen sales surge in the UK and Ireland as demand for takeaways jumped during the coronavirus lockdown.

The group posted a 5.5% rise in total system sales over the six months to June 28, with UK like-for-like sales up 4.8%, excluding stores opened near another outlet in so-called split territories.

But the group said underlying pre-tax profits dropped 4.6% to £47.6 million in the six months to June 28 after it was hit by £6.2 million in costs for extra safety measures amid the pandemic.

Domino’s switched off customer collection throughout the Covid-19 lockdown, seeing collections tumble 87% in the second quarter, while deliveries surged 22% – or 23% higher in the lockdown period.

The group said that, at a sales level, deliveries more than offset the collection hit, though order numbers were affected and fell 11% during lockdown and 5% overall in the first half.

But it has since restarted contact-free collections as lockdown restrictions have eased and said trading in the first few weeks of the second half has been “encouraging”.

Domino’s said recent trading had also been boosted by the return of Premier League football, an increase in UK staycations and the VAT reduction on hot food.

It is expecting to book another £2 million in coronavirus-related costs in the second half, it added.

Dominic Paul, chief executive of Domino’s Pizza Group, said it was a “resilient” first-half performance.

“While trading in the first few weeks of the second half has been encouraging, it is too early to conclude on how consumer behaviour will evolve,” he said.