Domino's Pizza beats slowdown as diners choose to eat at home

Online sales of Domino's pizza have surged ahead of its forecasts, as its half-year profits and sales were boosted by diners shunning restaurants in favour of eating at home. The company's chief executive, Chris Moore, said it had initially forecast that online orders would account for 35 per cent of total sales by 2015. Given that its half-year online sales grew by a record 85.1 per cent to £25.3m, accounting for 21.8 per cent of total sales, it expected to pass this target much earlier.

Mr Moore said yesterday: "We already have 72 stores that have more than 30 per cent of their business online, and that suggests it is one in seven stores. We would expect that the 35 per cent mark might actually look quite lame at this time."

The average transaction online is £19 and Domino's, which has 526 outlets in the UK and Ireland, aims to deliver within 23 minutes of taking an order. In the 26 weeks to 29 June, its pre-tax profits rose by 32.7 per cent to £10.9m. Total sales jumped by 20 per cent to £66.2m and like-for-like sales at its 450 mature stores were up 11.4 per cent. Mr Moore said the performance was "very positive, especially given the overall backdrop of what is going on out there [in the economy]".

He added: "A lot of that is due to trading down. People are eating at home and eating out at restaurants is on the wane. Previously, this was a suspicion but there is [now] evidence that is happening."

Over the past six months, Domino's also increased its number of "top end" customers – who spend more than the average £16 – by 19.3 per cent. However, Mr Moore said that "worse off" customers, who spend an average of £12, were ordering less frequently as the consumer downturn continued to bite.

In the second half of 2007, the company said it experienced "dramatic increases in food costs" but Mr Moore said its franchisees had already increased prices by 4 per cent between October and April. If food prices went up next year, it would probably only result in a 1 per cent increase in prices, he added.

Domino's, which sponsors television programmes including Britain's Got Talent and The Simpsons, is expanding capacity at its existing commissary in Penrith, Cumbria. This month, it completed a deal to open a new £25m commissary and headquarters at Milton Keynes, Buckinghamshire, which will open in 2010.

Yesterday, its shares rose by 2.5p 199.25p. Ben O'Toole, an analyst at Dresdner Kleinwort, said: "Since Domino's continues to deliver successful new product launches alongside industry leading service levels, extensive marketing policies and value for money products, we think this performance will continue in the second half of 2008 and expect our forecasts to move higher."