Domino’s hails improvement to value perception following marketing push
The pizza delivery chain says it also made “significant strides” in its digital transformation last year, with further investment earmarked for 2023.
Domino’s UK has hailed the success of its value push over 2022, having improved its value for money score by four percentage points compared to pre-pandemic 2019.
The pizza delivery company’s value for money perception was critical to driving increased consideration among consumers as their financial confidence has dipped, the business says. Deemed its “key metric”, consideration grew by one percentage point versus 2021 to 55%.
The improved value for money score was delivered by “significant” media support behind its deals across the year, including the ‘Price Slice’ deals launched towards the end of 2022. The business also launched its first national price campaign in January, with a 50% discount for spending more than £30 on pizza.
However, delivery orders were down 8.5% compared to 2021, when the Covid-19 pandemic boosted the food delivery market. As Domino’s looks to return delivery orders to growth this year, the business has said it will continue to “amplify” its value messaging through national campaigns, new value deals and further menu innovation. Last year’s innovations included its tie-up with Heinz on the Big Brekkie Pizza, the Ultimate Spicy Sausage launched in the final quarter to target World Cup watchers, and the new Festive One pizza over Christmas.
“As with 2022, we believe this will be particularly important in a year when consumers are experiencing cost of living increases,” the business says.
Strong national value campaigns, continued growth of collections, accelerated new store openings, digital initiatives and a full year on the Just Eat platform are all set to drive further growth.
Elias Diaz Sese, Domino’s
Overall, Domino’s saw its system sales decline 2.8% in 2022 to £1.46bn, down from £1.50bn in 2021. However, revenues were up 7% to £600m, and like-for-like sales rose 5.3%.
The fourth quarter was particularly strong for the business, with like-for-like sales up 13.9% versus a year prior and total orders up 4.1% to 18.5 million, the highest ever achieved in a quarter by the group. Collection orders were up 27.9%. The business therefore increased its share of the UK takeaway market to 8% in the quarter, up from 6.8%.
Domino’s shifts marketing focus to price as it ramps up investment
Trading for the first 10 weeks of 2023 also looks positive, with like-for-like sales up 10.8% and orders up 2.5%.
“At a time when customers have been looking for great value, Domino’s has delivered, and you can see the results in the numbers we’re announcing today,” says interim CEO Elias Diaz Sese.
“Our outstanding Q4 performance gives the business powerful momentum into this year and there’s a lot to be excited about. Strong national value campaigns, continued growth of collections, accelerated new store openings, digital initiatives and a full year on the Just Eat platform are all set to drive further growth.”
Increasing digital investment
Diaz Sese also claims the business made “significant strides” in its digital transformation last year, promising “increased investment” this year. In 2022, 90% of sales were digital, but the business says it is still in the “early stages” of being a “truly ecommerce business”.
Domino’s to invest £20m in digital acceleration
The brand has 13.6 million active digital customers in the UK and Ireland, with more than half of online orders (52.2%) made through the app, up 6.1 percentage points on 2021 and 8.8 percentage points compared to 2019. Orders generated through the app grew 10% amid a 50% increase in app downloads, while active app customers increased by 16% to 6.1 million.
According to Domino’s, customers who only use the app yield 43% higher sales per customer than customers who only use the website. These customers also had an average order frequency 1% higher than web only customers.
As such, attracting more app customers is a “key focus” for 2023. In the first 10 weeks of the year, new app customers are up 46%.
The business will also be focusing on more targeted personalisation this year to drive order growth, and optimising marketing efficiency to enable customers to find the brand.