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Domino's Pizza Group

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Domino's Pizza Group

Domino's Pizza Group plc
Public (LSE: DOM)
Industry Foodservice
Founded 1985
Headquarters Milton Keynes, England, United Kingdom
Number of locations
858[1]
Area served
United Kingdom, Ireland, Germany and Switzerland
Key people
Stephen Hemsley (Non-executive chairman)
David Wild (CEO)
Products Pizza, sides, desserts, drinks
Services Master franchisee for Domino's Pizza branches in the United Kingdom, Ireland, Germany, Switzerland, Liechtenstein & Luxembourg.
Revenue £294.4 million (2014)[2]
£54.0 million (2014)[2]
Profit £42.7 million (2014)[2]
Number of employees
20,000 (2012)[3]
Website corporate.dominos.co.uk

Domino's Pizza Group plc is a United Kingdom–based master franchise of international fast food pizza delivery chain Domino's Pizza. The company holds the exclusive right to own, operate and franchise branches of the chain in the United Kingdom, Ireland, Germany, Switzerland, Liechtenstein & Luxembourg. The firm’s shares are listed on the London Stock Exchange, and are a constituent of the FTSE 250 Index as of May 2015. Domino’s Pizza Group is the largest master franchisee in the Domino’s system, measured by retail sales and store profits.[4]

History

The Domino's Pizza company was founded in 1960, by American entrepreneur Tom Monaghan as a single pizzeria in Ypsilanti, Michigan. Through franchising, the firm had opened 200 American locations by 1978. The first British branch opened in Luton in 1985, with expansion into Ireland following six years later, with a store in Dublin.[5]

The master franchise for the British Isles was sold off by the parent company in 1993 to Domino's Pizza Group, a subsidiary of the International Franchise Systems holding company controlled by sibling investors Colin and Gerry Halpern.[6] The company partially floated its shares on London's Alternative Investment Market in October 1999, by which time it had expanded to a network of almost 200 branches (of which all but eight were franchises).[7] Certain investors such as Colin Halpern and property entrepreneur Nigel Wray retained significant stakes at this time.[7]

The company opened its 400th store in Wadsley Bridge, Sheffield in November 2005.[8] The 500th store opened in late 2007, in Hatfield,[9] with the 600th following in December 2009, in High Holborn, Central London, being opened by Stavros Flatley. The Domino's share transferred from AIM to the main market of the London Stock Exchange in May 2008,[10] and was promptly added to the FTSE 250 Index at the next quarterly review the following month.[11]

The 2000th European Domino’s store was opened at Kier Park, in Hemel Hempstead in August 2013.[12]

Germany

In April 2011, the group acquired a majority stake in the exclusive master franchise to own, operate and franchise Domino’s Pizza stores in Germany.[13] There are currently 23 stores in Germany and Domino’s plans to open 400 in the next ten years.[14]

The first German store opened in Berlin in 2010, and today, the company has five in the city. Other store locations also include Bonn and Aachen. The Domino’s store in Cologne was one of three stores opening on that day, which were recognised as the 5,000th international store for Domino’s Pizza Inc. The other two 5,000th stores were Rio de Janeiro, Brazil & Penang, Malaysia.[15]

Switzerland

On 24 September 2012, Domino’s Pizza Group acquired Domino's Pizza Switzerland AG, which provides the company with the exclusive right to operate and franchise Domino's stores in Switzerland, Liechtenstein and Luxembourg, as well as an option to acquire the Master Franchise Agreement for Austria.[16] There are currently 10 stores in Switzerland.

Operations

From 29 December 2013, there were 858 stores in the United Kingdom, Republic of Ireland, Germany and Switzerland. Of these, 663 stores are in England, 56 are in Scotland, 33 are in Wales, 21 are in Northern Ireland, one is on the Isle of Man, three are mobile units, 48 are in the Republic of Ireland, 23 are in Germany and 10 are in Switzerland. An ultimate total of 1,200 branches across the region by 2021 is targeted by the company [17]

Prospective franchisees are required to pay approximately £280,000[18] to the parent company for the right to operate their own Domino's Pizza outlet.[5][19] Once established, the group also provides other services for the franchisee including production of dough, sourcing and delivery of ingredients and training.[19] The group also delivers IT, advertising and other administrative services on behalf of the franchisees.[19]

Domino’s has a central commissary system which makes dough, and supplies this and other ingredients to each store. Domino’s commissaries are located in Milton Keynes, Penrith and Naas in Ireland.[19]

Financial information

Domino’s Pizza Group financial results.[4][20][21][22][23][24]
Year to December System sales (£m) Revenue (£ million) EBIT (£m) Earnings per share (p)
2014 766.6 294.4 55.2 25.9
2013 668.8 268.9 47.9 10.7
2012 598.6 240.5 47.20 19.04
2011 530.6 209.9 42.64 16.65
2010 485.3 188.1 38.46 15.4
2009 406.9 155.0 30.99 21.45
2008 350.8 136.0 24.48 10.12
2007 296.3 114.9 20.21 8.38
2006 240.1 95.0 13.7 6.2
2005 200.7 81.7 10.4 5.1
2004 174.3 74.2 9.1 4.1
2003 142.3 61.6 6.0 2.8
^1 - Accounts to 2005 prepared according to United Kingdom Generally Accepted Accounting Principles. Accounts from 2006 onwards prepared according to International Financial Reporting Standards.

Shareholder structure

Many of the principal shareholders of Domino’s Pizza Group are individuals connected with the company including long-term investor and non-executive director Nigel Wray and former owner Colin Halpern. A total of 0.35% of shares are held in treasury stock by the Domino’s Pizza Group Employee Benefit Trust.[25]

Products

In May 2012, Domino’s signed up to Out of Home Calorie Labelling Pledge, which is part of the Government’s Responsibility Deal. This saw the introduction of calorie information on Domino’s main ordering website.[26] In June 2012, the company signed up to the Hospitality and Food Service Agreement managed by WRAP (Waste and Resources Action Programme), the Government-funded organisation responsible for improving waste reduction and recycling.[27]

In November 2012, Domino’s launched a gluten free pizza in its United Kingdom & Republic of Ireland stores, accredited by Coeliac UK.[28]

Labour issues

In September 2007, the current affairs programme Newsnight reported on the alleged poor treatment of Domino's Pizza employees.[29] Workers at one franchise claimed to be victims of "modern day slavery", according to union T&G Unite, with money unlawfully deducted from the workers' pay sometimes leaving workers being paid nothing or even made to pay the company.

Some of the deductions made by the company included the costs of insuring the cars used to deliver pizzas, and one worker was deducted all her wages for the first week of work because the franchise designated it "unpaid training".[30] Then–CEO, Stephen Hemsley, denied that such issues were systemic within the franchise network.[29]

Domino's Pizza Group's operations in the United Kingdom extensively use zero-hour contracts.[31]

Sponsorship

Domino's Pizza was the sponsor of episodes of The Simpsons on Sky1 between 1998[32]–2008. In July 2007, Ofcom introduced a ban on fast food advertising, around programmes aimed at under sixteens.[33] This resulted in the advertising being dropped for a brief period, but later resumed. In April 2008, when reintroduced, the advertising subsequently became more brand focused, rather than promoting specific products.[34]

In October 2008, the company announced that its sponsorship of the show would come to an end.[35] The firm has also sponsored episodes of The Simpsons on Channel 4 (which were previously sponsored by Pizza Hut). In 2006, Domino's launched products based on the show such as the "Homer's Hot Stuff" pizza, along with television advertising featuring the characters. Domino's has also sponsored the second, third and fourth series of Britain's Got Talent.[36] Orders received on the night of the 2008 Final were around a third above those of a typical Saturday night.[36]

In June 2011, Domino’s sponsored Red or Black?, a new game show presented by Ant and Dec.[37]

Digital strategy

In 1999, Domino’s launched online and interactive ordering.[38] In August 2007, Domino's became the first pizza company in the United Kingdom, to launch a service that allows customers to order pizzas by text message.[39] In May 2010, it launched a widget for social network sites, allowing any user with a blog, Facebook or MySpace account to promote Domino’s Pizza, and receive a cash reward every time an order is placed through the widget.[40] Domino’s iPhone ordering app was introduced in 2010, and took £1 million in its first three months.[41]

In June 2011, the company launched Android and iPad apps.[42][43] A Windows Phone 7 app followed in 2012.[44] Domino’s growth in e-commerce continues with 61.5% of all United Kingdom delivered sales (2012: 56.1% of United Kingdom delivered sales) coming via the internet. Sales taken through all online platforms were up in 2013, by 28.2% to £338.0m (2012: £263.7m) and, of this, 30.9% was taken through a mobile device (2012: 19.7%).[45]

References

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External links

  • Official website
  • Profile at Google Finance
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