HARD-PRESSED consumers are choosing to stay at home and gorge on £10 Meatball Mayhems rather than eat out, according to pizza delivery chain Domino's, which yesterday posted bumper sales and profits.
The firm, which operates a network of more than 500 franchised stores, admitted it faced a "significantly tougher trading environment" but said fixed contracts and higher retail prices had shielded it from soaring food and energy costs.
However, i
t warned of further "modest" price increases early next year as cost pressures continue.
Industry experts believe that fast-food companies stand to benefit during the credit crunch, with pizza, burger and fried chicken takeaway meals becoming the family treats of choice.
Mid-market restaurant chains are likely to feel the squeeze.
Domino's chairman Stephen Hemsley said: "The trend that we are witnessing so far is that many consumers are 'trading down', which means that they are eating out less often and staying at home."
The firm also confirmed it would push ahead with plans to increase its UK and Irish estate to 1,000 by 2017.
Domino's was set up in the US in 1960 and now operates in more than 50 countries. It opened its first UK store in 1985 before pushing into Ireland six years later. The London-listed business holds the master franchise to own, operate and franchise Domino's Pizza stores in the UK and Ireland.
During the first six months of the year, 25 outlets were opened, with a similar number earmarked for the second half of the financial year.
A spokesman for the company said Scotland, where 40 franchised stores already operate, would feature strongly in the expansion plans.
Results for the 26 weeks to 29 June revealed a 19.5 per cent rise in total sales to £170.2 million. Online orders leapt 85.1 per cent to £25.3m.
Domino's said sales were boosted by the brand awareness offered by sponsorship of Britain's Got Talent on ITV.
The group has ramped up its promotional activity this year with funds set aside for advertising lifted to £18m from £13.5m last time.
Pre-tax profits during the period under review increased by 32.7 per cent to £10.9m.
The figures were well-received in the City, with Altium Securities upgrading its estimates for the third time this year. Altium is now looking for profits of £22.3m in the current financial year, some £300,000 higher than its previous forecast.
Meanwhile, Numis reiterated its "buy" recommendation and 343p target price on Domino's shares, which closed 2.5p higher at 199.25p.
The pizza delivery chain is proposing an interim dividend of 2.7p, up 42 per cent on a year earlier.
The full article contains 461 words and appears in The Scotsman newspaper.
