Dominos Pizza Abandons Second Brand Strategy Amid Declining Deliveries

Domino’s Pizza has opted to discontinue its pursuit of acquiring a second brand, placing its emphasis squarely on its core business after a disappointing year in pizza delivery orders, which have seen a significant slump in profits. The company, part of the FTSE 250 index, reported a staggering 35 per cent fall in profits, prompting a reevaluation of its growth strategy.

Following an unsuccessful attempt to purchase the chicken chain Wingstop in 2024, Domino’s has officially shelved its plans to leverage its existing infrastructure for the introduction of a new brand. Nicola Frampton, the interim chief executive, stated that past evaluations concluded that potential acquisitions were not appropriate fits for the company.

Despite these setbacks, Frampton expressed a confident outlook, noting the introduction of the Chick ’N’ Dip offering, which will be rolled out nationally after a successful trial in various regions. This move is aimed at tapping into the lucrative £3 billion chicken market, all while relying on Domino’s established brand.

The company reported a 1.7 per cent decline in delivery orders over the 28 weeks leading to the end of December. Frampton commented on the tough year that contributed to a total like-for-like order decrease of 2.3 per cent, bringing the annual total to 71.1 million orders. Conversely, collection orders have shown slight growth, rising by 0.5 per cent, reflecting ongoing shifts in consumer behaviour.

In financial terms, the company revealed that like-for-like system sales, which encompass both franchise and corporate store turnover, increased marginally by 0.2 per cent, reaching £1.6 billion. This rise is attributed to higher average selling prices as franchise partners adjusted prices to account for escalating labour costs. Overall revenues experienced a 3.1 per cent increase, totalling £685.4 million during this period.

The firm adjusted its financial guidance earlier in the year due to several economic factors, including fragile consumer confidence and rising employment costs. Pre-tax profits decreased to £81.1 million in comparison to £124.9 million reported in 2024. Adjusted profits were down by 6.6 per cent, aligning with the revised forecast of £130 million to £140 million.

Domino’s franchise structure in Britain has evolved significantly since the launch of its first store in Luton in 1965, with nearly 1,400 outlets now operating across the country. The group anticipates an ongoing focus on boosting sales through its primary business, with new store openings projected to remain consistent with the previous year. Despite the challenges facing the company, positive momentum has been observed in the early weeks of 2026, suggesting a robust response to the festive trading period.

City analysts regarded the results positively, noting a near 4 per cent rise in shares during early-morning trading. However, shares have plummeted more than 30 per cent over the past year, and analysts from Investec highlight the ongoing difficult market conditions ahead. Nonetheless, management’s confidence in meeting consensus forecasts for the year provides a glimmer of hope for investors.

The dynamics within the takeaway sector continue to evolve, presenting both challenges and opportunities for established brands like Domino’s. As the company navigates these turbulent waters, its ability to adapt and innovate will be crucial for sustaining its position in the competitive landscape of the food delivery market.