Domino’s Pizza Group reported a 16 per cent fall in first-half pretax profit on Tuesday due to rising costs and food inflation, and said it would increase its media spend in the second half to lure more customers.
The conflict between Russia and Ukraine, two major wheat exporters, has fuelled supply concerns in the flour market and driven global wheat prices to historic levels.
Domino’s Pizza Group, a franchisee of US-based Domino’s Pizza that covers the United Kingdom and Ireland, said its profitability was expected to be weighted to the second half as it maintained its annual outlook.
“We will be increasing our media spend in the second half compared to the first half, amplifying our value message to customers as we head into key events such as the men’s football World Cup,” chief executive Dominic Paul said.
Mr Paul, who led the company through the Covid-19 pandemic and played an integral role in reaching an agreement with the franchisees in the UK and Ireland over profit sharing, will leave in December to join as the head of Premier Inn-owner, Whitbread.
Domino’s Pizza, which operates stores in the UK and Ireland, reported lower system sales of £710.5 million (€847.5 million) for the 26 weeks ended June 26th, compared with £752.3 million (€901.3 million) a year earlier. Underlying profit before tax came in at £50.9 million (€60.9 million).
But there was brighter news for the Irish arm of the business. System sales in Ireland were £36.4 million (€43.6 million) in the first half of the year, up from £35.8 million (€42.8 million) in the same period a year earlier.
US-listed Domino’s Pizza missed market estimates for quarterly profit last week on soaring costs and staffing crunch.
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