Domino’s rakes in the dough as food delivery market booms, reveals big expansion plans

If there was a good business to be in when the pandemic struck, delivery pizza was right up there, and Domino’s has certainly been raking in the dough.

EXCLUSIVE

If there was ever a good business to be in when the pandemic struck, delivery pizza was right up there, and the massive surge in demand has prompted Domino’s to dramatically accelerate its expansion plans, with hundreds more stores to come.

The company reported in its bumper 2020-21 results earlier this month that 285 new store openings during the period - 30 of those in Australia and New Zealand - amounted to network growth of 10.7 per cent, surpassing its three to five year outlook of 7 to 9 per cent.

On Monday, Australia and New Zealand chief executive Nick Knight revealed Domino’s aimed to have 1200 stores across the two nations by the 2025 to 2028 period, up from 862 stores currently.

A huge amount of thought goes into where.

“We’re investing in what we call opportunity markets where we have the most growing to do - that’s Sydney, Melbourne and Adelaide specifically,” Mr Knight told NCA NewsWire.

Domino’s Australia and New Zealand chief executive Nick Knight says the company aims to have 1200 stores across the two nations by the 2025 to 2028 period, up from 862 stores currently. Picture: Domino's Pizza via NCA NewsWire

“When we look at the Domino’s network across Australia and New Zealand, we have the highest levels of penetration: in other words, we’re closest to the customer and we can get there really quick.

“That improves product quality and our delivery metric ... we see a really good lift in store-level sales and efficiency, which leads to better profits.

“Being able to get the leverage of what a bigger network can provide us back through our advertising funds and those things, it really is a virtuous circle where everybody wins: the customer, the franchisees and our communities because we’re able to be in more places and serve more customers.”

Mr Knight said the pandemic had not just sent the demand for home delivered meals skyrocketing and brought many of Domino’s growth plans forward, it also inspired a genius new menu addition.

“Earlier this year we launched the sausage sizzle pizza, which has BBQ beef sausage, grilled onion, mozzarella, tomato (sauce) and mustard - a lot of Australians were missing a sausage sizzle and we were able to bring that to them in the form of a pizza,” he said.

Aussies have been missing sausage sizzles during the pandemic, hence this genius creation. Picture: Domino's Pizza via NCA NewsWire

Overseas, Domino’s has rolled out unique offerings to cater to local palates, with the ‘quattro’ a big hit in its huge growth market of Japan.

“Japanese like a little bit of everything in their meals and that’s a pizza that’s not a half-and-half but four different toppings on the one pizza,” Mr Knight said.

“Most recently, they’ve brought rice into their menu, so they have a pizza rice bowl. In Japan, a meal’s not a meal unless you have some rice with it, so we were able to appeal to the local tastes there.

“In France, one of their most popular pizzas is a fresh cream base and potato.”

Domino’s is also responding to increased demand for gluten-free and vegan pizzas, using local ingredients such as pumpkin, broccoli, while its Premium range in Australia and Super Gourmet range in New Zealand caters to those wanting a more luxe meal, with toppings including beef brisket and smoked salmon.

Domino’s has delivered more than 16,000 meals over the past year to people doing it tough, including Centrelink queues, and also fed frontline workers. Picture: Domino's Pizza via NCA NewsWire

On top of food experiments run in its “Love Lab” kitchen, Domino’s invites its staff to contribute ideas, either combinations they think will work or based on customer requests.

The company is using technology platforms to gather those ideas and keep staff connected during the pandemic, running competitions and master classes on Workplace from Facebook.

“Even showing and sharing videos of what they're making in stores and what they’d like to see make their way onto the menu,” Mr Knight said.

“We have thousands of budding pizza experts out there in the field who are really eager to share their creations.”

But don’t expect anything too wacky on the menu any time soon, because Domino’s knows its winning formula should only be tweaked gently and after great consideration.

It's about improving “what customers know and love”, Mr Knight said.

“For us it is a case of sticking to our knitting,” he said.

“We think we can sell a lot more pizza in Australia and New Zealand.”

Those who got a slice of Domino’s by buying shares will have seen them soar from almost $81 a year ago to more than $150 currently. Picture: Domino's Pizza via NCA NewsWire