Domino’s Pizza ambitious for a larger slice of Irish market

Quick-service restaurant chain, Domino’s Pizza, envisages “significant” growth opportunities for its Irish operations, after ‘year on year’ sales growth of 8% in the first three months of the year.

In February, Domino’s Pizza UK & Ireland — the wholly owned European subsidiary of the US fast-food giant — reported strong group profit and revenue growth for 2012.

Its Irish division generated operating profits of €5m, with sales stabilising after two years of significant decline. Sales at the Irish unit — which covers 48 outlets in the Republic — declined by 0.2% during 2012, representing a significant improvement, from a 4.1% drop in 2011 and an 8.4% fall in 2010.

Yesterday’s first-quarter, 2013 update from the company — which operates more than 800 outlets in Britain, Ireland, Germany, Luxembourg, Liechtenstein and Switzerland — noted “a solid start” to the year, with group system sales rising by 12.3%, to £164.1m.

It said that like-for-like sales, in the Republic, were “resilient” throughout the first quarter, rising by 8.1%. The company’s Irish sales grew by just 1.5%, in comparison, in the same quarter last year.

New-store openings — seven in all — since the turn of the year, have taken place in Britain and Germany and the near-80 new stores planned for the remainder of this year will be in those two territories.

But, Ireland isn’t being overlooked in Domino’s Pizza’s growth strategy — although the business here is likely to attempt market-share growth via price offerings, new-product offerings, and customer service improvements.

Speaking on the back of yesterday’s quarterly update, Domino’s Pizza’s chief executive, Lance Batchelor, said: “Domino’s Pizza continues to show that there are still significant opportunities in our core UK and Republic of Ireland markets, as well as the new territories of Germany and Switzerland, and we are in a great position to seize those opportunities.”

“New-product launches, a relentless focus on service, industry-leading digital and online technology, an ever-growing marketing budget, and a healthy pipeline of new sites are just some of the ways we continue to drive this terrific business forward,” Mr Batchelor said.

Domino’s Pizza closed one of its Irish outlets in 2012, but ended the year adamant that Ireland remains a long-term market for the business, and that it has been faring better than many of its direct competitors.

Addressing the tough trading conditions in all of the company’s core European regions, yesterday Mr Batchelor said: “We know that the ongoing economic pressures are leading to a tough trading environment, and we have extremely tough comps in the second quarter to overcome, as well as food-cost increases coming through during the year, but — with first-class franchisees and a strong head-office team — I expect, at this early stage in the year, that trading will be in line with market expectations for 2013.”

Reiterating the company’s long-term commitment to Ireland, earlier this year Mr Batchelor said “no one can confidently predict the turn of the economic tide in Ireland, but, when it comes, Domino’s Pizza will be ready and waiting”.