Lockdown takes a slice out of Domino’s Pizza profits
Domino’s Pizza has forecast that the cost of measures introduced during the coronavirus lockdown will push down profit for the first half of the year, despite an increase in people ordering in over the period.
The company said the costs stemmed from halting two-person deliveries, keeping stores closed during restocking, contact-free delivery boxes, and issuing face masks to delivery drivers.
Given the fact Domino’s management remains unsure how long the measures will need to remain in place, it said it was unable to give full-year financial guidance.
Shares fell one per cent in early trading as the company said that the extra costs from implementing safety measures offset the increase in sales.
“We have also seen a change in consumer purchasing behaviour and average basket composition, with a higher proportion of sides and desserts, which, whilst aiding our sales performance, has impacted our margins,” the company said.
Like-for-like sales in the UK grew 3.7 per cent for the first half of the year to 14 June.
Sales at its smaller Irish arm fell 5.9 per cent, which the company said was the result of a more pronounced weaker consumer spending during the lockdown.
Domino’s, which has been looking to sell its loss-making international operations, also said sales have been particularly impacted in Switzerland, driven by the temporary closure of a number of stores.