In a past life I lived in a flat with a communal hallway. Among the post permanently littering the floor was the usual junk mail detritus: estate agent leaflets, double-glazing pamphlets and takeaway menus. In a development I don’t like to talk about at parties, I used to receive envelopes from the local takeaway addressed to ‘Pizza Eater’. All these missives contained was a menu. Nothing else. It was a shameful indictment on my love of Hawaiian specials.
But it’s behaviour like mine that has boosted sales at Domino’s. Today the pizza chain revealed ‘excellent’ results thanks in large part to a massive increase in online orders.
Reporting a pre-tax profit of £73.2 million compared with £62.1 million a year earlier, Domino’s also announced that it has hiked its annual dividend by 21.3 per cent to 11.75p a share. Although it reported an underlying operating loss of £1.3 million for the year, the chain has continued to open stores – 61 new outlets in 2015 compared to 40 the year before.
‘People enjoy pizza, it’s a fun food,’ David Wild, chief executive of Domino’s told the BBC this morning. ‘People eat pizza with a smile on their face. The thing that customers want more than anything else is convenience, and that means food that’s delivered to their home… and secondly food they can order online. We’ve seen a massive increase in our online orders – a total of 11.5 million app downloads since we launched our app two or three years ago – and what we’ve learnt is that customers like to find it easy to get hold of a pizza.’
Ain’t that the truth. UK online sales at Domino’s soared by nearly 30 per cent last year and app-based orders spiked by more than 40 per cent. In total, 11.5 million people have downloaded the app. Across all of its sales channels in the UK and Ireland, Domino’s sold 230,000 pizzas a day. That’s a lot of pizza-eaters.
Domino’s says that e-commerce sales make up 77.7 per cent of all UK deliveries. Nearly half of these internet orders are made using its app. The company’s earlier investment in its online services has really paid off.
But it’s not just our desire to order food from the comfort of the sofa that has put a smile on investors’ faces. According to Domino’s annual results, ‘during 2015, we and our franchisees enjoyed the benefits of a benign food price landscape’.
Er, say what now? I think what the pizza giant is trying to say is this: cheese is cheap. And unless you’re on one of those militant dairy-free diets, you’re going to want cheese on your deep pan 12 inch.
Lower wheat prices also helped, as did a fall in oil prices (think of all those over-worked delivery men and women, zipping around the country).
And it’s not just Domino’s reaping the results of the nation’s love of pizza. Consider Just Eat, the online delivery company. Earlier this month announced the firm announced it handled 96.2 million orders last year, a 57 per cent increase on 2014, worth a total of £1.7 billion. Something tells me I’m not the only person receiving personal letters from the local takeaway joint.
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