Domino’s Pizza Group PLC (LON:DOM) has reported a jump in like-for-like (LFL) sales in the UK across the first part of 2020, particularly from late March as its delivery sales were boosted by higher demand for takeaway food during the coronavirus lockdown.
In a trading update, the pizza firm reported that for the period from December 31, 2019, to June 14, 2020, its LFL sales in the UK including splits rose by 3.7%.
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From March 23, 2020, to June 14, 2020, when the UK’s lockdown measures came into effect, LFL sales jumped by 5.1% compared to 2.3% for the period from December 31, 2019, to March 22, 2020, before the lockdown measures came into effect.
Domino’s said rapid growth in delivery orders as a result of the lockdown had “more than offset” the lack of collection sales, although it added that its margins had been impacted by a higher proportion of sides and desserts being added to customer orders.
Things were less positive in Ireland, a smaller part of the group, which saw LFL sales decline by 5.9% from December 31, 2019, to June 14, 2020, with a 9.2% decline in the lockdown period.
Despite the increased sales in the UK, the company said changes to its operations to protect customers and employees had “incurred considerable additional costs” during the lockdown period, and as a result, it expected that its underlying earnings (EBITDA) for the first half will be “slightly lower” year-on-year.
“At this time, we cannot be certain how long the changes we have made to our operations, and the associated costs will continue, as this will be determined by the wider [coronavirus] backdrop”, Domino’s said, adding that due to the uncertain trading conditions it can also not provide guidance for the full year.
Meanwhile, the company said it has seen a “mixed sales performance” across its international businesses in Sweden, Switzerland and Iceland during the pandemic, with sales in Switzerland being hit particularly hard by the temporary closure of several stores.
"Throughout this crisis we have focused on looking after our people and working together with our franchisee partners to safely serve our customers and help our communities”, said Domino’s chief executive Dominic Pau in the statement.
“I am proud of the performance of our system during this period, and that the vast majority of our stores have remained open. I am looking forward to giving a more detailed update on our performance and sharing my first impressions of the business at our first half results presentation in August", he added.