Domino's shrugs off inflation and staffing challenges as profits jump
DOMINO'S Pizza has notched up a hike in annual profits and said it expects sales growth to ramp up in 2022 despite inflation and recruitment woes.
The boss of the takeaway chain said the firm was "passing on some inflationary pressure to franchisees" but said it hopes efficiency improvements can help reduce the need for price increases.
Dominic Paul, chief executive of the group, said the company would focus on value amid uncertainty for customers due to the cost-of-living crisis.
"Domino's grew really well in 2008 despite the financial crisis because customers recognised the value there and we will focus on that further," he told PA.
"They traded down from restaurants when they assessed their spending and we think that's something we could see again."
Mr Paul added that inflationary pressures "could increase" as a result of the conflict in Ukraine, which has already started to impact global wheat and oil prices.
It came as the chain reported pre-tax profits of £109.7 million for the year to December 26, up from £98.9 million the previous year.
On an underlying basis, profits rose 12.5 per cent to £113.9 million as like-for-like sales rose 10.9 per cent, excluding so-called split territories.
It announced plans to hand back a further £46 million to shareholders, on top of the £80 million share buyback in 2021.
The group, which recently ended a long-running dispute with its franchise partners, said trading had started well in 2022 despite coming up against tough comparisons from a year earlier when sales were boosted amid lockdown restrictions.
It said demand had been buoyed by its first national price campaign for several years, which was launched thanks to the resolution of the row with franchisees.
But it flagged challenges with soaring cost pressures and ongoing recruitment difficulties.
The group said it would look to "turbo-charge" its pizza collection business, which it said would help as it battles against staffing troubles and rising wages.
It is rolling out its recently launched in-car collection service this year to around 500 stores, having already added it to 422 sites by the end of 2021.
Domino's said: "We are well placed to adapt to changing market conditions and ongoing challenges related to inflation and recruitment.
"As such, we continue to expect an acceleration in underlying system sales growth."
In December, the group said it had agreed a deal to invest £20 million over the next three years, with franchise owners agreeing to increase the speed of new store openings.
It also recently completed the exit from all directly operated international markets to focus on the key UK and Ireland markets.