Pizza sales up as diners stay at home

Cash-strapped consumers are shunning restaurant meals and ordering takeaways at home, Domino's Pizza said today as it forecast better than expected full-year profits.

The pizza delivery firm, which has 553 stores in the UK and Ireland, said people were looking to "trade down" from going out for a meal but were unwilling to give up entirely on luxuries.

Sales for the year to 28 December were up 18.4 per cent to £350.8m, while like-for-like sales grew 10 per cent for the same period.

A Domino's spokeswoman said the company had attracted customers during the slump in consumer spending.

"People still want a treat but they are looking for ways to get that treat at a lower price," she said.

"On occasions when they might go for a meal, what we are seeing is they are getting a bottle of wine from the supermarket and ordering a pizza."

She said the company's sponsorship of the Saturday night ITV show Britain's Got Talent had proved successful, with sales perceptibly rising around the time the programme was broadcast.

Domino's online sales rose dramatically in the year, up 73.7 per cent to £55.9m and bolstered by some record weekends when sales exceeded £1m.

The company, which holds the master franchise to own, operate and franchise Domino's Pizza stores in the UK and Ireland, saw its sales growth slow in the 13 weeks to 28 December, with like-for-like sales up 8.6 per cent against the 14.8 per cent improvement seen in 2007.

Panmure Gordon stockbrokers said the company had outperformed its expectations in all key areas of its business and announced it would upgrade its pre-tax profit forecast for 2008 from £22.2m to around £23m.

Analyst Andrew Saunders said: "Today's trading statement confirms another superb performance by the business despite the many challenges thrown up in 2008."

Mr Saunders said the Domino's franchise structure meant individual stores were very driven to grow their own sales and able to set their own pricing structure to reflect their customer base.

Domino's hopes to increase its UK outlets to 1,000 and chief executive Chris Moore said he was confident the goal would be achieved after the company exceeded its target of opening 50 stores in the year.

A total of 52 branches were added, creating around 1,500 jobs, and no stores were closed.

"Despite the challenging economic environment, our franchisees' appetite for growth continues, as does our belief that the Domino's recipe - to deliver great quality pizza with unbeatable service, supported by extensive and highly targeted marketing - is right for these times," Mr Moore said.

Domino's added five meat pizzas during the year - Steak Special, Meatball Mayhem, Texas BBQ, American Hot and The Premiere.

Founded in 1960, Domino's is one of the world's best-known pizza delivery brands and has more than 8,700 stores in over 50 countries.