Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

IN the face of uncertainty, reassuring familiarity and simplicity is often what’s needed most. So perhaps it’s little surprise that Domino’s Pizza (DOM) sales have boomed in the past two years.

The clear market leader in takeaway pizza, Domino’s has grown its slice of the market, despite the arrival of competitors.

Its latest third quarter update in October showed sales were 9.9% higher at £375.8 million. Despite the likes of Just Eat and Deliveroo nipping at its heels, threatening to woo pizza-lovers away with an expanding menu of world cuisines, total orders also grew 9.5% at Domino’s during the third quarter.

Domino’s is sticking to what it does best - serving pizza and utilising technology - namely its app launched last May that is already processing 42.1% of sales - to get food to customers just how they want it. And that crucially means maintaining a familiar presence on high streets up and down the country; a tactic which led to collection orders rising by a similar 40.3% over the last three months of the year.

Some have queried whether Domino’s can really compete long-term with the low prices from so-called ‘dark kitchens’ which churn out delivery-only through food delivery apps. But Domino’s knows its audience and its long-term strategy and, having seen collection orders rise, is justified in having opened five new stores in the quarter and 18 in the year to date.

Domino’s collection business is, as it acknowledges, its “most profitable and labour efficient way” of serving its customers. Newly-introduced in-car collection is its latest innovation to “turbo-charge” business.

Where Domino’s needs to be careful is when it comes to debt. As recently as 2015 Domino's had almost no borrowings, but by 2019 they'd grown to more than £250 million. Currently at just over £230 million, divestment of its Swiss business will help reduce that - although the failed international expansion has cost it dearly.

But Domino’s says the disposal should significantly “diminish” the cash drain on the group. And the £40 million or so that went on its new supply chain centre in Warrington should prove to be money well spent.

Share buybacks have helped keep shareholders sweet. Now all eyes will be on what tasty treats it has to serve up next, when it posts full year results on Tuesday.

Learn more about the Stay at Home economy in the latest Monty.Markets.Money.

Important information: Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

Share this article

Latest articles

Investing in the ways we pay

How global brands are getting in on the action

Graham Smith

Graham Smith

Investment writer

How to cash in on the great inflation squeeze

Trading down markets - from the cheaper brand of food you buy to taking fewer…

Tom Stevenson

Tom Stevenson

Fidelity International

The one loan you don’t need to rush to clear…

Student Loan new rules: 7% vs 12%

Nafeesa Zaman

Nafeesa Zaman

Fidelity International