Domino’s Pizza Halts Acquisition Plans Amid Delivery Decline

Domino’s Pizza is shifting its focus back to its core business, abandoning plans for a second brand due to a decline in pizza delivery orders and a significant drop in profits. The company, listed on the FTSE 250 index, made this decision after its attempt to acquire the chicken chain Wingstop in 2024 did not materialize.

Declining Performance and Strategic Refocus

Nicola Frampton, the interim CEO of Domino’s, stated that various assessments for a second brand always concluded they were unsuitable. Instead, the company will leverage its own brand to capitalize on the large chicken market, estimated at £3 billion, through its new Chick ‘N’ Dip offering. This product follows a successful trial in northwest England and Northern Ireland.

Performance Statistics

In the 28 weeks concluding at the end of December, Domino’s noted a 1.7% decline in delivery orders. This downturn is indicative of a challenging year for the company. Overall, total like-for-like orders dropped by 2.3%, resulting in 71.1 million orders for the year. Despite this decline, collection orders showed a slight recovery, rising by 0.5%.

• Total like-for-like system sales increased by 0.2% to £1.6 billion.
• Revenues rose 3.1% to £685.4 million during the period.
• Pre-tax profits fell sharply to £81.1 million, a drop from £124.9 million in 2024.
• Adjusted profits were down 6.6% at £133.9 million.

Future Expectations

The company expects adjusted profits to align with market forecasts for the upcoming year. New store openings are anticipated to remain consistent with the levels seen in 2025. Positive sales momentum from the holiday season has carried into the early weeks of 2026.

Market Reaction

City analysts generally reacted positively to the results. Shares of Domino’s experienced an almost 4% rise in early trading, ultimately closing slightly higher at 188.25p. However, it’s worth noting that the share price has declined by over 30% in the past year. Analysts from Investec warned of ongoing market challenges but found management’s confident outlook encouraging.

In summary, with the pivot away from pursuing a second brand, Domino’s aims to reclaim its footing in the pizza market while addressing the challenges of rising costs and fluctuating consumer demand.