Domino’s Sold Record Number of Pizzas Nearing Half a Million on Trading Day alongside a Decline in International Sales

Domino’s reported record sales of pizzas on black Friday, the Friday before the Christmas festivities. Dominoes sold 535,000 pizza in UK over the 12 hour trading day which is equivalent to selling 12 pizzas every second. Despite the record sales the company has slashed profit estimates as the international sales during the period showed signs of decline.

The strong sales during the Christmas season raised the sales by 5.5% year-on-year to £339.5 million in the 13 weeks period leading up to 30 December. The company’s operations in Republic of Ireland contributed significantly to the rise in sales growth as like-for-like sales increased by 7.5% in the period, as stated in a recent trading update.

Dominoes stated that the record sales took place on the Black Friday or more popularly known as Black eye Friday in UK as Britons are in festive mood and celebrate the day by visiting pubs and bars. However the record delivery sales show that the Britons are preferring to stay home on the festive day.

The FTSE 250 listed company based in Michigan, United States stumbled to expand to new markets despite the fast growth in UK as its international sales came down to £26.6m by 2% year-on-year. The Chief executive officer of Domino’s Pizza Group, David Wild said that they experienced difficulty in international operations. He added that the company faced challenges in business integration which prompted the sluggish sales in Norway and also Iceland.

Domino’s in the profit guidance statement stated that the full year profits before tax would be between £93.9m and £98.2m lower than analyst’s expectations owing to the weak international sales. The company added that short term profitability may be affected by the investments in central functions.

The Domino’s shares which were worth 380p in June have witnessed a strong decline in recent months because of its struggles in international sales. The shares fell by over 7% to 255p on Tuesday. 

Dominoes added 59 new stores in UK which is addition to the already 1200 stores in UK. The group which sold 90 million pizzas last year plans to have 1600 stores in UK in the longer term. The competition in the delivered food segment is very stiff as new players like Uber Eats, Just Eat and Deliveroo have entered the field and are gaining a larger share of the market. However Domino’s is banking on its brand and record of profitability. The company stated that the company aims to maintain the share of the delivered food market in UK which is expected to grow by a compound rate of 8% per year up to 2022. Domino’s is basically an American Pizza delivery company founded in 1960. The company has since expanded globally and is now the seventh largest fast food delivery chain in the world serving nearly 15,000 locations.

Author: Shambhu Nath Jha

Shambhu Nath Jha with an experience nearing a decade, has helped over 50 large and medium to small business enterprise to foray into new markets, increase footprint in the existing bucket and understand the nature of the beast. These beasts are the companies that have been primarily engaged in chemicals, material or packaging activities, and encountering challenge either in maintain P&L or staying ahead of their competitors. He has authored over 300 industry research papers consisting critical information such as market growth, total addressable market, serviceable addressable market, market size, forecast, player strategies, market share estimates and winning imperatives along with recommendations. He is also the pioneer of “three slope distributor/off-taker evaluation model” used by several multinational companies to track the performance of channel partners. A consultant by profession, writer by mood and explorer by desire, Shambhu Nath is currently employed with a London based market research and consulting firm as a full time consultant. A few of the industry verticals where he demonstrated his skill includes water and wastewater treatment chemicals, high purity alumina, water purifiers, activated carbon, chloramine filters, bio-based bioplastics, water purifiers, textile chemicals etc.