Domino's Pizza Group PLC (LSE:DOM) has long dominated the pizza delivery business in the UK, but it now wants to be known for more than dough and tomato sauce.
According to analysts, the company is expected to unveil a series of initiatives aimed at widening its menu, deepening its customer relationships and squeezing more profit from its already dominant market position.
And investors are getting a taste of what's to come, starting with chicken. The group is trialling a new sub-brand, CHICK’N’DIP, in 187 stores across the northwest of England and Northern Ireland, with a national rollout in mind.
If it works, the move could give Domino’s a foothold in one of the fastest-growing segments of casual dining. Chicken is a £3 billion plus market and climbing.
Importantly, the initiative is being fulfilled via existing kitchens and supply chains, so it’s a relatively low-risk punt.
According to Shore Capital, this is less of a curveball than it might appear.
The group had reportedly been sniffing around Wingstop before private equity snapped it up last year.
While management still seems open to M&A, possibly acquiring a second brand outright, the focus for now appears to be on organic growth, underlined by the recycling of surplus cash into a £20 million share buyback.
Investors should not hold their breath for a big deal this side of Christmas.
There are other areas where Domino’s sees room to stretch.
The business already has more than double the stores and more than triple the sales of its next two UK pizza rivals combined, a scale that lets it trial new ideas faster, spend more on tech and marketing, and run a tight ship on costs.
Among the topics set to be discussed at December’s capital markets event is Domino’s loyalty scheme, which has already attracted a million app customers.
Peel Hunt reckons users of the scheme are placing around 10% more orders a year, and with ten million app users in total, there is a clear incentive to scale it further.
The group is also doubling down on its customer data and personalisation tech, another nudge towards higher order volumes and better margins.
Operationally, Domino’s is not standing still either. It is investing in supply chain automation, think robotic dough placement in commissaries and smarter distribution centres, as well as testing new store formats that could be more efficient and more profitable.
That might extend the economic life of some locations, reducing the need for costly splits or relocations as demand increases.
Ireland is another bright spot. Stores across the Irish Sea are some of the chain’s best performing, and with the Republic still relatively underpenetrated compared to the UK or the US, it represents a rare international growth lever.
All of this sounds encouraging, and Peel Hunt remains bullish, reiterating its 'buy' rating and 350p price target.
Shore, on the other hand, is sticking with 'hold' at 210p, flagging macroeconomic headwinds and a slightly more cautious outlook for the full year.
Still, at around 11 times forward earnings, Domino’s is not priced like a company with this many levers to pull. The coming months will show whether CHICK’N’DIP and the rest can move the dial.