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Domino’s Pizza reports monster sales lift, teases new app roll-out

Nick Hall

Fresh off unveiling a new ‘fortressing’ store strategy, franchise giant Domino’s Pizza has reported a monster lift in its network sales.

At the company’s annual general meeting on Monday, Domino’s Pizza Enterprises revealed that network sales had increased 10.6 per cent on the previous year, boosted by the opening of 42 new stores over the period.

Don Meij, Domino’s Pizza Enterprises group CEO and managing director said the past year had been filled with significant milestones, both at home and abroad.

“This was a year of milestone achievements for our company, our franchisees and our team members,” Meij told shareholders at the AGM in Brisbane.

“We have passed 300 Domino’s branded stores in Germany with the successful conversion of the Hallo Pizza business, and just last week we opened our 400th Domino’s store in France.”

Domino’s results

While new store openings were the primary factor behind the network sales growth, existing stores were not far behind. Domino’s also reported a same store sales rise of 4.1 per cent, coupled with a continuation of the group’s booming online sales, up 18.2 per cent to $1,943m.

Domino’s Pizza Enterprises chairman Jack Cowin noted the result was particularly impressive in light of the emerging challenges delivery aggregators pose on the fast-food industry.

“In a macro environment where other quick service restaurant operators are determined to enter the digital delivery space where Domino’s Pizza Enterprises leads, digital sales grew even faster,” he told shareholders.

Meij continued, revealing Domino’s plans to introduce a new mobile ordering app, in limited roll-out before nation-wide implementation across Australia and New Zealand.

“Despite having the most successful food ordering in the country, we must not be satisfied with the status quo,” Meij said.

Domino’s Pizza Enterprises Australia

It’s been an interesting period for the pizza giant here in Australia. The recently announced ‘fortressing’ strategy drew criticism from some industry analysts who suggested the model may cannibalise existing franchised stores.

However, Meij reiterated the strategy would deliver for customers, which in turn would deliver for franchisees.

“We have started to refranchise corporate stores to existing store managers, or franchisees,” he said. “The initial results are pleasing, with the new store owners passionate about growing their businesses.”

Domino’s Pizza Enterprises international

While the network sales announcement capped off an impressive domestic period for the chain, Domino’s Pizza Enterprise’s international efforts were also on display.

Meij revealed that the company had opened its first stores in Denmark, following a high-profile acquisition of the region late last year. Further, the chain also expects to launch an inaugural outlet in Luxembourg in the coming weeks.

“We now have more than 1000 Domino’s branded stores in our European business and are well on our way to opening 1000 Domino’s stores each in France and Germany; two large pizza markets that will deliver growth to this business for many years ahead,” Meij said.

The group CEO and managing director confirmed the company is firmly focused on the roll-out of the new ‘fortressing’ strategy, both domestically and internationally. The move will see a record number of stores open in the coming months in order to facilitate Domino’s new delivery targets.

“At this time our outlook for the medium term is unchanged; we expect to open new stores at the rate of seven to nine per cent of our group network annually and grow group same-store-sales at the rate of three to six per cent,” Meij said.

“We intend to deliver on this outlook by focusing on what we do best – breaking the prevailing wisdom that says you can’t have high quality meals, available fast, at an affordable price.”