The big profits of pizza during a pandemic are starting to lose momentum.
Domino’s Pizza existing store sales Of a corporation
According to the company, US stores fell 1.9% in the three months to early September compared to the same period last year. According to FactSet data, this is the first decline in same-store sales in the United States in more than a decade, a reversal from the previous quarter when sales were still growing.
Domino and Rival Chain Pizza Hut and Papa John’s International Ltd
Last year, a restaurant closed its cafeteria during a pandemic, flooding with deliveries and takeaway orders. Today, most restaurants are reopening their canteens, slowing growth in delivery sales. According to a survey of 963 Americans conducted last month by industry research firm Revenue Management Solutions, nearly 30% of US diners expect to reduce delivery from restaurants in the future.
Domino’s Pizza believed that part of the decline in US orders was due to lower federal stimulus payments to consumers during the period. Spring government payments that helped chains and other restaurants didn’t happen again during the summer, the company said. Delivery sales were particularly hit by lower payments to US consumers, CEO Rich Allison told investors.
According to the company, which is based in Ann Arbor, Michigan, ongoing staffing issues have saved Domino stores time and service, pushing down sales. Staffing issues and the additional burden of workers on businesses are becoming increasingly common issues throughout the industry, from manufacturing and medical to air travel.
The company said it is trying to attract more customers to the takeaway business due to a shortage of delivery drivers. “There is no doubt that staffing and other factors will continue to pose challenges for Covid,” Alison said.
Domino’s share price rose 2% in the morning to $ 488, recovering after falling in front of the market.
The restaurant has been a bumpy year as delta variants of the virus have slowed new restaurant sales growth over the last few weeks. Rising supply and labor costs are digging into profits, and industry executives expect rising inflation to further weigh on next year’s margins. According to Labor Ministry data, restaurants are passing costs on to consumers, with fast food prices rising 6.7% year-on-year in the year to September.
Alison said he expects labor to continue to be a problem as people leave the workforce and immigration to the United States declines. The chain said it is trying to raise wages to recruit workers and make restaurants more efficient to reduce working hours.
Domino’s sales for the three months to September 12 were $ 998 million, below FactSet’s research analysts’ forecast of $ 1.03 billion. Domino reports that it is a temporary adjustment with a profit of $ 3.24 per share. Analysts expected a profit of $ 3.11 per share.
Alison said 323 new Domino stores around the world opened this quarter, saying that supply chain hurdles and tolerances for delays have resulted in fewer US store openings than expected.
Domino’s Pizza said Thursday that it expects US price inflation to reach the high side of expected guidance next year, given labor and commodity pressures.
Domino and dining trends
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— Matt Grossman contributed to this article.
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Pandemic pizza sales growth slows as Domino’s pizza orders decline
Source link Pandemic pizza sales growth slows as Domino’s pizza orders decline