Domino’s capitalises on lockdown takeaway demand

Both Domino’s and Papa John’s report strong US sales growth

Domino’s Pizza (DPZ) has announced that its same-store sales rose by 14 per cent during the first two months of the second quarter, with demand for takeaway food bolstered by the Covid-19 lockdown.

CEO Ritch Allison said: “We are seeing a tailwind as consumer behaviour across the restaurant industry has shifted towards delivery and carryout, though we are not sure whether this trend will continue for the remainder of the second quarter or how long this tailwind may last.”

A shining star, Domino’s stock outperformed Facebook, Google, Amazon and Apple in the past decade. While it has fallen 1.78 per cent in the past three months, at $360 the Pizza chain stands up over 22 per cent on the year to date.

Industry analysts have widely predicted a brighter future for pizza delivery chains in a post-Covid world, which they think will capitalise on the struggling restaurant sector.

The path ahead for Domino’s is by no means easy, however. On Thursday morning its rival Papa John’s International (PZZA) announced record North American sales growth, triggering a pre-market jump of 2.4 per cent.

Furthermore, as American demand for pizza increases, the largest pizza company in the world (per global retail sales) is facing pressure internationally. Despite the number of closed international locations falling from 2,400 to fewer than 900, Allison stated: “Our international sales results continue to be choppy – and may be for the foreseeable future.”

 

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