Domino's Pizza Faces Order Downturn Amid Price Rises and Economic Pressures
Domino's Pizza has reported a notable dip in order numbers over the past year, as the renowned takeaway chain navigated a challenging economic landscape marked by subdued consumer confidence and escalating operational costs. The interim chief executive, Nicola Frampton, described 2025 as a "difficult year for all," highlighting the broader struggles within the fast-food sector.
Financial Performance and Order Metrics
In the UK and Ireland, where Domino's operates approximately 1,400 stores, the company recorded 71.1 million orders, representing a 0.9 per cent decrease compared to the previous year. This decline contributed significantly to a 15 per cent fall in the group's underlying pre-tax profit, which settled at £91.2 million.
Despite the drop in order volume, system sales—which encompass total revenue from both franchised and company-owned outlets—rose by 1.5 per cent to £1.6 billion year-on-year. This growth was primarily driven by a 4 per cent increase in prices, implemented to counteract rising costs, even as sales volume declined by 2.5 per cent.
Factors Behind Price Adjustments
Domino's attributed the necessity for price hikes in 2025 largely to offsetting higher labour costs, stemming from increased national insurance rates and rises in the national minimum wage. Franchisees were compelled to adjust their pricing strategies to maintain profitability amidst these financial pressures.
Nicola Frampton explained, "Franchisees have had to put prices up. We've worked really hard not to do that, but we've had some significant incremental cost flow through the employment changes that came through." She emphasised that the company aimed to strike a balance between managing costs and maintaining service quality, unlike some competitors who either raised prices substantially or reduced service levels.
Strategic Responses and Future Outlook
Looking ahead to 2026, Domino's has expressed optimism, reporting a positive start to the year and anticipating a boost from its recently launched chicken sub-brand, Chick 'N' Dip. This initiative, rolled out nationwide in September, taps into the growing demand for chicken in the UK and represents a strategic shift from previous plans to acquire a second food brand.
Ms Frampton noted that the success of Chick 'N' Dip has led the company to "park" the idea of purchasing another brand, as it demonstrated that Domino's could access the chicken market effectively without such an acquisition. Additionally, the chain opened 31 new stores in 2025 and plans a similar number of openings in 2026, reflecting confidence in its business model and expansion prospects.
Addressing Market Challenges and Consumer Trends
The company is also mindful of upcoming challenges, including another minimum wage increase scheduled for April and changes under the Employment Rights Acts that will affect staff hours and working patterns. To mitigate these impacts, Domino's is leveraging artificial intelligence (AI) for more efficient staff scheduling and forecasting demand, while benefiting from easing food inflation this year.
Furthermore, Domino's is responding to health-conscious consumer trends by broadening its product range to include lighter portions and lower-calorie options. Ms Frampton affirmed that the company does "care" about these evolving consumer preferences and is adapting its offerings accordingly.
In a positive market reaction, Domino's shares rose by approximately 5 per cent on Tuesday, indicating investor confidence in the company's strategic adjustments and future prospects despite the recent setbacks.
