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The ease at which you can get a table at an ‘in’ restaurant these days - if it is still trading of course – is a stark indicator of the changing dining habits of British diners in the face of the credit crunch.
If people are not eating out, then they are eating in. However, healthy results from one of the UK’s biggest pizza companies this week show that even though they are staying in, they still want somebody else to make their food.
Announcing its trading for the three months to the end of September this week, Domino’s Pizza said that sales in its 501 branches in the UK and Ireland were up by 10.8% in 2008 and that is on the back of already impressive growth last year.
Sales for the nine months to the end of September now stand at £294.5 million, up from £253.5 million in 2008.
Domino’s has a healthy share of the rich UK pizza market. Brits much their way through hundreds of millions of pizzas every year – a significant bite out of the multi-billion pound fast food market.
The credit crunch has made Britain’s nation of couch potatoes even more attached to their couches. Domino’s has clearly spotted this trend and has a target of opening 50 new branches this year alone to reach an estate of 583 stores, 24 years after the first was opened in the country.
It doesn’t plan to stop there either. It intends to continue opening 50 new branches a year in the UK and Ireland, with a target of 1,000 branches by 2017. By way of comparison, Pizza Hut – which opened in the UK in 1973 – now has an estate of more than 700 restaurants here. Pizza Express, which started in the UK in 1973, has around 300 restaurants.
Domino’s was founded in America in 1960 by Tom Monaghan and now has more than 8,700 stores around the world. It operates principally on a franchise basis and the company has more than 2,000 franchisees, including DPG, its master franchisee in the UK and Ireland.
Despite the rapidly growing store network in the UK, the company’s customers are increasingly turning to the internet and even text messaging to make their orders. More than a quarter of all the company’s orders are now placed this way and sales through this channel are growing rapidly - e-commerce sales for the past three months are up by 43.1% on last year.
Domino’s couch potato thinking even extends to the company’s advertising. It is currently in the middle of a three-year contract to sponsor one of the ocuntry’s most popular TV formats - Britain’s Got Talent.
Prior to that, the brand had a decade-long association with cartoon show The Simpsons on Sky One that was said to be worth around £2m a year – one of the longest TV sponsorship deals in UK history. The deal ultimately fell foul of Ofcom guidelines on the promotion of fast food to children, despite the cult series having a large adult viewership.
The power of the company’s TV sponsorships was recognised by the company’s chief executive, Chris Moore. Announcing the interim results, he said: “We are particularly pleased with our strong performance during the period as the economic environment continues to be challenging. Our tactical marketing campaigns have played a major role in our success during the period, supported by the firepower of the National Advertising Fund and the deflationary media market.
”We still have to face some tough comparatives before the year end, but by focusing on the quality of our product and the excellence of our customer service, we are ready for the challenge.”
It is little surprise that Moore is so keen on TV advertising. He began his career working in international advertising at McCann Erickson. He has worked in the UK franchises for Domino’s since 1990, starting with a European marketing brief.
Moore knows that successful, modern pizza companies have to innovate constantly.
It is currently building a £25m commissary in Milton Keynes to service its nationwide store network, helping it to keep costs under control.
Domino’s high street stores are important but it has hopes beyond that. Over the summer, the company unveiled its first mobile store - 11.5 metres long and weighing 14½ tonnes – aimed at the summer festival market. It contained everything normally found in a typical bricks and mortar store including twin ovens and a cold room.
Although pizza had remained unchanged for hundreds of years, the humble pizza is changing rapidly too. In January this year, the company launched a limited edition haggis pizza to sell from its Scottish branches for Burns night. Whether the haggis pizza was a publicity stunt or something that customers really wanted is unclear, but Domino’s is clearly doing something right.
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