Domino's Pizza outlines new profitability plan as Q4 trading picks up

(Sharecast News) - Domino's Pizza Group, the UK master franchise of the American takeaway giant, on Monday announced a new "profitability and growth framework" with its franchise partners, that will see it invest an additional £3-4m per annum from next year. The news came as DPG reported a 5.3% increase in total orders across the first nine weeks of the fourth quarter, compared with 3.5% growth in the third quarter. Like-for-like sales growth picked up to 2.7%, from 0.7%.

The company also announced that the tax changes announced in the autumn budget in October will add around £3m per annum to the cost of labour.

DPG said the new agreement, which begins on 3 January following the conclusion of an existing memorandum of understanding with its partners, underpins its confidence in hitting £2bn in systems sales from 1,600 stores by 2028, rising to £2.5bn from 2,000 stores by 2033.

System sales, which are the sum of all sales made by both franchised and corporate stores, totalled £1.57bn in 2023.

DPG said the new plans include raising its marketing contributions, increasing digital investment to enhance its product offering and introducing new store incentives for franchise owners in areas with lower sales.

"This new framework is a vital step in driving the future growth of both DPG and our franchise partners. We've shown since 2021 that when we are aligned with our franchisees, we can achieve so much together, and this framework will take our partnership to the next level," said chief executive Andrew Rennie.

Domino's said the new framework received "unanimous support" from franchise partners, having negotiated the agreement with the Domino's Franchise Association.