Domino's set to maintain momentum

Domino's set to maintain momentum

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Domino's Pizza is expected to continue its strong performance

Domino’s Pizza is expected to continue its strong performance on Wednesday when it updates the City on trading for the final quarter of 2010.

The takeaway and delivery company should continue to benefit from the trend of ‘the big night in’, which sees consumers indulging on affordable treats at home rather than heading out on the town. This will have been reinforced by the final of ITV’s The X-Factor, which drew almost 20 million viewers earlier this month.

And in the last two seasons of heavy snow – January 2010 and February 2009 – Domino’s reported high like-for-like sales growth.

Seymour Pierce stockbrokers said there were a number of reasons for this, including the scooter delivery system that beats larger vehicles and the fact that its franchisees are highly motivated and don’t take days off.

In addition, people stuck in their homes are more likely to order pizzas while the foodstuffs used – dough and cheese – are more flexible and durable.

Douglas Jack, an analyst at Numis, forecasts that Domino’s will report strong sales growth despite the disruption caused by the snow.

Its buy one get one free ‘Two For Tuesday’ promotion and its range of oven-heated Subway-style rolls will continue to prove popular, he said.

Like-for-like sales growth should have slowed from 12.5% in the first three quarters of the year in which Domino’s benefited from the World Cup, but is still expected to remain above 10.5% for the year as a whole, he added.

He expects Domino’s full year pre-tax profits to be up by 22% to £36.5 million.

Domino’s has opened some 50 new franchise stores in the past year, bringing its total number of outlets to around 643, and expects to continue at this pace for the foreseeable future.

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