How Domino’s is achieving record sales
Domino’s is forecasting a strong profit and growth outlook for FY17.
The pizza business upgraded its prediction as a result of boosted same store sales figures and improved margins, and is expecting growth of about 30 percent.
Group CEO and managing director Don Meij said “In October our Australian stores delivered the largest like-for-like growth for the country in the company’s history.”
The first 16 weeks of FY17 same store sales increased 17.66 percent on the previous corresponding period. Australia and New Zealand same store sales are expected to see 12 to 14 percent growth, and the pizza business is likely to open nearly 200 stores.
Meij said the digital contribution to business growth has been significant.
“An increasing number of our customers’ orders are being placed through our websites, in all of our regions,” he said. “This financial year we are seeing very strong digital growth, with digital sales outpacing offline growth.”
Digital sales have increased by 36.9 percent in Australia and New Zealand.
Better efficiencies at Domino’s
Domino’s has introduced greater scale and efficiencies to improve margins.
The world’s most automated Domino’s commissary, in France, is expected to achieve annualised savings of €2m a year.
“Our strategy is seeing higher sales across our network, strong same store sales growth, improving margins and higher profitabilty for our franchisees.
“This year we will continue to execute this strategy; investing in technology to improve our customers’ experience, opening new stores to capitalise on market opportunities, and improving same store sales by adding new flavours and product offerings.”
Australian and New Zealand stores will be introducing thickshakes and premium ice-cream desserts after successfully trialling the products.
“We intend to capture 10 percent of this market across both countries, which is estimated at $700m in Australia alone,” said Meij.
“This follows the September launch of our Taste the Colour menu, which is performing even better than we expected.”
Meij said Domino’s has grown its market share to 38 percent of the quick service restaurant pizza sector, according to the NPD Group/Crest.
Wages boost for 2017
There’s good news too for the majority of Domino’s employees with increased wages part of the 2017 plan. Enterprise agreement negotiations are expected to be finalised in the second half of the financial year.
Domino’s has voluntarily increased driver rates by nine percent, on top of a 2.4 percent federal wage increase, said Meij.
“In the interim, we budgeted, and intend to, voluntarily increase our wages for the majority of our team members in January.”
Domino’s Pizza Enterprises Ltd also includes overseas regions. There were increases of 3.77 percent in the European region and an expected drop of 0.59 percent in Japan.
Meij said the conversion of Joey’s Pizza stores in Germany had exceeded initial plans and all stores in the portfolio will become Domino’s outlets by 8 December, six months ahead of schedule.
The group’s long term forecast is for 4,650 stores in Europe.