Domino’s effect is still strong but growth comes at a slower rate

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TAKEAWAY chain Domino’s Pizza said it continues to expand its store footprint and grow sales, but at a slower rate.

The group, which now has almost 750 stores across the UK and Ireland, added online sales now make up more than half its delivered sales in the UK.

In the 13 weeks to September 23, system sales rose 7.9 per cent to £136.4m, and year-to-date system sales are up by 10 per cent to £424.1m.

But analysts warned that growth rate has slowed from the 11 per cent seen in the first half of its financial year.

“We think recent acquisitions have introduced additional complexity and risk into what had recently been a straightforward UK rollout story with excess cash returned to shareholders via share buybacks,” said Panmure Gordon analysts. Domino’s has been expanding abroad in recent years.

In April 2011 it bought a majority stake in the brand’s German franchise, and earlier this month it acquired the master franchise for Switzerland, Luxembourg and Liechtenstein.

“The German business continues to progress well and we are confident that these new markets will be an additional engine for growth in future years,” it said.

The company said it has now opened 34 new stores so far this year, but is on target to open 60 new stores in the UK and 12 in Germany by the end of the year, including two more in Yorkshire. Chief executive Lance Batchelor said: “We continue to set ourselves ambitious targets but believe that a great product, supported by exemplary customer service and innovative marketing will deliver strong growth in the years to come.”