LONDON (UK) – Domino’s Pizza Group said on Wednesday it expects the first-half core earnings to be slightly lower, as it was hit by additional costs during the lockdown as the country’s largest pizza delivery firm made significant changes to its business pattern.
The company said the costs stemmed from re-routing store dispatches to stop two-person deliveries, ensuring all stores remain closed during restocking, contact-free delivery boxes and issuance of face masks, among others.
The group said it was unable to provide full-year guidance and added it was uncertain how long it will have to continue incurring these costs.
Shares of the company were down 4.1% at 324.1 pence in early trade.
The company, a franchise of US-based Domino’s Pizza Inc, said that while sales grew as more people ordered in, it could not stave off the extra costs incurred from implementing safety measures.
“We have also seen a change in consumer purchasing behaviour and average basket composition, with a higher proportion of sides and desserts, which, whilst aiding our sales performance, has impacted our margins,” the company said.
Like-for-like sales in the UK grew 3.7% for the first half of the year to June 14. Sales at its smaller Ireland business fell 5.9%, which the company said was the result of a more pronounced weaker consumer spending during the lockdown.
Domino’s, which has been looking to sell its loss-making international operations, also said sales have been particularly impacted in Switzerland, triggered by the temporary closure of a number of stores.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field