Domino’s Pizza Group PLC (LON:DOM) has announced it is continuing to operate with “contact-free” delivery operations.
The pizza chain no longer allows collections in stores, which typically accounts for 20% of sales, although it said the current growth in delivery is “more than offsetting” this loss.
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The FTSE 250-listed fast food group said UK and Ireland trading has increased over the past week, after being “in line” with expectations in January, February and in the first two weeks of March.
It is recruiting extra drivers to cope with demand.
"Systemic risk" is here
Analysts at Liberum said the coronavirus crisis could "truly put the relationship between the Plc and franchisees at breaking point", as franchisees are dealing with extra pressure.
Stores may see their margins drop as they have to pay extra to recruit new delivery drivers.
Plus, the size of some stores could not allow staff to stay at the safe distance of 2 metres and some shops have had to shutter for this reason.
"No doubt the system sales will likely hold up very well, a huge benefit to the Plc as the volume-driven partner, but the issue here is profitable sales for all stakeholders in the system, not just the Plc," analysts commented.
Other markets struggling
However, in the weaker markets of Norway, Switzerland and Iceland Domino’s flagged “significant disruption”, with sales down “double-digit” on 2019 and 16 temporary store closures due to labour shortages and low demand.
The current net debt position is “slightly lower” than the £232mln reported at the end of December.
The firm also suspended the final dividend payment of 5.56p announced earlier this month.
Shares dipped 1% to 278.3p on Friday morning.
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