Dominic Walsh
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The biggest pizza delivery company has recorded a sharp rise in profits as the middle-classes respond to the credit crunch by trading down from restaurants to takeaways.
Domino's Pizza, which has more than 500 stores across Britain and Ireland, yesterday delivered increased sales in the first six months of the year on the back of a sharp rise in higher-spending customers.
The figures follow last week's suggestion by Waitrose, the supermarket chain, that there was a growing trend for home entertaining. Sales of its “As Good as Going Out” range were up by 38 per cent. Evidence of trading down has also come from Aldi, the discount food retailer, and J.D. Wetherspoon.
Chris Moore, Domino's chief executive, said that the number of new customers this year had risen by almost 20 per cent. “These are people who went out to eat once or twice a week and are now going out once or not at all and ordering a pizza delivery once a week,” he said.
“We normally expect new customers to spend less to begin with, as they get used to the menu and how things work. But these people are spending marginally more.”
Domino's , which serves almost 40 million pizzas a year, said its research showed that it was attracting more customers from the A and B socio-economic bandings, whereas the more typical Domino's user was from the C, D and E groups.
Mr Moore said that these customers were ordering more side-orders and desserts than usual, pushing their average spend to £17 to £18 per order compared to a normal outlay of about £15.Domino's, whose restaurants are all run by self-employed franchisees, reported a rise of 19.5 per cent in total sales to £170.2 million in the first half of the year. On a like-for-like basis, sales were up 11.4 per cent while pre-tax profits were almost a third higher at £10.9 million.
The performance has also been helped by a trend towards bookings over the internet, which accounted for almost 22 per cent of delivery sales, and its sponsorship of the ITV show Britain's Got Talent. Like-for-like sales growth peaked at 15 per cent in the week of the final episode.
Other takeaway operators have seen similar increases in demand to those of Domino's. Jamal Hirani, chief executive of Gourmet Restaurants, a big player in the Indian takeaway market through the Tiffinbites and Bombay Bicycle Club chains, said that delivery sales had increased by 20 per cent in the past six weeks.
“People want to save money but they still want the luxury of not having to cook, so they order a meal to eat at home. The jump in sales in the last few weeks has been incredible,” he said.
But Pizza Hut, the UK's second-biggest pizza delivery operator, played down talk of a shift in the demographic profile of its customers. Alasdair Murdoch, chief executive of Pizza Hut UK and Ireland, which has 280 delivery stores, suggested that the growth in higher-spending online customers and inflation-related price increases were more significant factors: said. “We have a fleet of 1,500 mopeds and with petrol prices soaring it all adds up,” he said.
Round figures
— Domino’s sells almost 40 million pizzas a year in the UK and Ireland
— The most popular so far this year have been: Pepperoni Passion Texas BBQ Mighty Meaty Full House Vegetarian Supreme
— There are 88 million recipe options on a typical Domino’s Pizza menu
— Favourite toppings in other countries include: Squid (Japan) Black bean sauce (Guatemala) Barbecued chicken (Bahamas) Lamb & pickled ginger (India) Fresh cream (France) Chorizo (Portugal) Grilled lamb (Netherlands)
Source: Domino’s Pizza
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