Activities

Domino’s is the market leader in the home delivery and takeaway pizza sector and is one of the largest quick-service restaurant chain in the UK. The group claims to sell one in ten of all meals delivered to the home in the UK.

Timeline

• 1960:  Tom Monaghan founds the first Domino's Pizza store in 1960 in Michigan, USA, though it is called DomiNick's until 1965. His brother James sells his share in the venture after a year in return for a Volkswagen Beetle.
• 1967: The first franchise opens and by 1983 there are 1,000 stores, including the first outside the USA.
• 1985: The first UK store opens in Luton.
• 1991: The first Irish store opens in Dublin.
• 1993: Gerald and Colin Halpern buy the master franchise for Domino’s in the UK and Ireland, which now has 77 outlets. Before, Domino’s Pizza was controlled from the USA.
• 1996: A pilot sit-down restaurant in central London is abandoned after four months.
• 1999: Domino’s, which now has 190 outlets, becomes the first home delivery company to float on the Alternative Investment Market in November and launches an interactive television ordering service.
• 2000: Domino’s introduces the patented Heatwave hot bags to keep the pizzas hot and crisp during delivery. It opens the 200th Domino’s outlet just before Christmas and launches an Internet ordering service for customers.
• 2001: Domino’s scraps 15 experimental takeaways opened over the past five years in Alldays convenience stores and Total petrol stations because they need to be replaced by full-sized stores that can service the higher than expected customer demand.
• 2003: Domino’s introduces global positioning satellite technology to prevent delivery drivers getting lost.
• 2004: Domino’s introduces the world’s first double-decker pizza – Double Decadence – and is the first to market with a reduced-fat mozzarella, called Delight, with 30% less fat.
• June 2005: Domino’s sells 13 company stores to Dough Trading for £4m.
• November 2005: Domino's opens its 400th store in Sheffield.
  

Financial snapshot

Full year    

Turnover: £85m (2005: £77.3m)
Pre-tax profit before interest: £11.2m (2005: £9.1m)

Half year

Turnover: £41.8m (2004: £36.2m)
Pre-tax profit : £5m (2004: £4.1m)

Financial year end: 1 January 2006
Half-year end: 3 July 2005

Operating data

The turnover figures above refer to sales generated from royalties, fees on new store openings, food sales, rental income and turnover from corporate stores and joint ventures.

System-wide sales across all branches in the year to January 2006 grew by 15.1% to £200.7m (2005: £174.3m).
System-wide sales for the half-year to 3 July 2005 grew 19.1% to £97.1m (2004: £81.5m)

In the year to 1 January 2006, e-commerce sales grew by 69.5% to £13.9m(2005: £8.2m) to represent 10.4% of delivered pizza sales.

Number of Domino’s stores worldwide: in excess of 8,000 in more than 50 countries
Number of stores in the UK and Ireland: 407 (five company-owned).

Number of franchisees: 152in the UK and Ireland (more than 2,000 worldwide)
Number of employees: in excess of 8,000 in the UK and Ireland (more than 145,000 worldwide)

Average store size: 1,000 to 1,200 sq ft
Average catchment area: each store covers between 20,000 and 25,000 households.
Typical start-up cost of a franchise: £228,000 excluding VAT

Strategy

“With room in the market for 800 Domino’s Pizza stores, our target is to open 50 stores per year. On reaching 500 stores, we believe that we would deliver to around 60% of all households and believe that this will be in 2007 at the earliest.”

Source: company statement, January 2005

Chief executive

Stephen Hemsley

Key directors

Executive chairman: Colin Halpern
Chief operating officer: Chris Moore
Finance director and company secretary: Lee Ginsberg
Operations director: Patricia Thomas
Business development director: Andrew Mallows

Contact

Lasborough Road
Kingston
Milton Keynes
MK10 0AB

Tel: 01908 580 000
Fax: 01908 588 000

E-mail: inforequests@dominos.co.uk
Website: http://www.dominos.co.uk

Commentary

Pizza accounted for 48% of the £1.36b market for home delivered meals in 2005 and Domino’s dominated the pizza market.

The group has grown rapidly under current chief executive Stephen Hemsley from 210 stores in 2001 to more than 400 in 2005. But Domino’s sees plenty of scope for further growth to around 1,000 branches.

Its view is backed by market research which suggests that the delivered pizza market is likely to double in size from £400m in 2004 to £800m by 2010.

Domino’s plans to open 50 stores a year to reach this target, although it faces hurdles from stricter planning controls that require it to seek A5 rather than A3 consent for new stores. It has also suffered from a scarcity of suitable franchisees in areas earmarked for growth.

Nearly half of its franchisees are multi-site operators and 20 had reached millionaire status in terms of assets by 2004, when the group’s highly successful franchise model won it the Franchisor of the Year award

Hemsley elected to apply the entrepreneurial spirit to the 18 company-owned stores and started a search for joint venture partnerships to run them. In June 2005, it sold 13 to newly-formed Dough Trading for £4m and said it was seeking a sale or a joint venture on the five remaining company outlets.

Domino’s has been quick to embrace innovation and technology. It developed the corrugated pizza box to keep the pizzas from getting soggy and sticking to the lid; introduced Heatwave technology to keep the pizzas warm; and was the first pizza delivery company in the world to offer internet and interactive TV ordering on a nationwide scale.

The group has also responded to health concerns by keeping its products free from genetically-modified ingredients and introducing a lower-fat mozzarella. However, its decadent double-decker pizza has proved the biggest hit and boosted average weekly sales to record levels in the six weeks to January 2005.