Domino’s reduces average pizza delivery time as it aims to open more stores in the UK | Business News

Domino’s Pizza Group has announced that it intends to continue expansion, opening a total of 70 new branches across the UK this year.

The company, which holds the master franchise for the North American chain in the United Kingdom and Ireland, told investors on Tuesday that it was “gaining momentum” after a slow start to the year, including by halting a downward trend in orders.

The group, which has a profit-sharing agreement with its own franchise partners, welcomed the “good momentum” in its business, despite having reduced its profit prospects for the full year.

Domino’s also said its average delivery time was reduced to 24 minutes between April and June – cutting its time from the previous quarter by a minute.

Chief executive Andrew Rennie praised the “excellent service improvement” and said some of the network’s competitors were achieving “more than double and sometimes worse” times.

Domino’s underlying core profit was £69 million in its half-year results on Tuesday, a slight increase of 0.4% on the same period last year.

Total orders fell 0.9% to 35.1 million in the six months to the end of June, although the company said they had been improving notably since May and rose 0.6% in the second quarter.

However, the company also predicted that its global profit for the year would be between £144 million and £149 million, at the lower end of market expectations.

Domino’s said that while it expected food costs to fall in the coming months, it decided to pass those savings on to franchisees and customers through special offers to help drive the brand’s long-term growth.

This caused the company’s shares to fall as much as 8% at one point during trading on the FTSE 250 on Tuesday as investors digested the announcement.

But Rennie insisted the company was in a strong position heading into the second half of the year.

He said sales were boosted the eurosbut added that the company’s fortunes had been improving before the tournament began.

“After a slow start to the year, we now have good business momentum, with our strategic initiatives gaining momentum and our commercial performance accelerating steadily against strong benchmarks from last year,” he said.

Rennie added: “We are performing well in an uncertain market thanks to our relentless focus on brilliant value, quality and service for our customers.

“In our core business in the UK and Ireland, we see significant opportunities for further growth through new store openings, an exciting new loyalty trial to increase frequency and a focus on value and service, particularly in delivery channel.”

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Analysts at Investec said that while the revised profit guidance may impact short-term numbers, the decision to pass on cost savings to franchisees was “fully consistent with the business strategy and useful for the long-term sustainability of the model”.

However, Russ Mold of investment platform AJ Bell described the results as “as soggy as an old pizza” and said the company would need a strong performance in the second half of the year to win over investors.

He added: “While the recent boost in business during the Euro football tournament is obviously welcome, it is also transitory and the fear is that the difficult first few months of 2024 will be more reflective of people’s willingness and ability to fork out more than £20 for a pizza.”