Domino’s Bets on Expansion Despite Sluggish Start to 2025

Domino’s Pizza Group plc, the UK and Ireland arm of the global pizza giant, has reaffirmed its commitment to growth despite facing a mixed start to 2025. The company reported a 2% increase in total sales for the 52 weeks ending 29 December 2025, reaching £1.57 billion, though group revenue saw a slight decline of 0.4% to £664.5 million.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) climbed by 6.4% to £143.4 million, largely driven by reduced technology platform costs. Underlying profit before tax rose 8.4% to £107.3 million, exceeding market expectations. However, profit after tax fell by 21.6% to £90.2 million, a drop attributed to the previous year’s one-off boost from the sale of a German joint venture.

Despite strong financials, Domino’s shares fell 3.1% to 283.8p following the announcement. Analysts pointed to slower-than-expected sales growth at the start of 2025, with like-for-like (LFL) sales rising only 0.7% in the first ten weeks of the year—lagging behind the 3% growth in Q4 2024.

Store Expansion and Long-Term Growth Strategy

Domino’s remains undeterred by the slow start to the year, pressing ahead with its ambitious expansion plans. The company opened 54 new stores in 2024 across 21 franchise partners, including a record number of openings in Ireland. By the end of the year, the total store count stood at 1,372 locations across the UK and Ireland.

Looking forward, Domino’s is targeting at least 50 new store openings in 2025, aligning with its longer-term goal of operating 1,600 stores and achieving £2 billion in total sales by 2028. This growth is underpinned by a five-year Profitability and Growth Framework (PGF) developed in collaboration with franchise partners to drive sustainable expansion.

CEO Andrew Rennie remains optimistic, stating:

“Our trading momentum accelerated as the year progressed, our delivery channel returned to growth, and we delivered strong underlying earnings growth. This has required relentless focus from our colleagues and franchise partners, and I thank them for their brilliant work. With a strong store opening pipeline and our resilient business model, we are well positioned to thrive in 2025 and beyond.”

Consumer Spending Trends and Labour Costs

While Domino’s has shown resilience, broader economic conditions remain a concern. UK businesses are grappling with rising labour costs and changing consumer spending habits. Rennie, however, sees potential upside in the government’s National Living Wage increase, arguing that higher wages could boost discretionary spending, ultimately benefiting Domino’s.

“Customers who end up with more money in their pay package from the national living wage are also our customers, and therefore, we could be the beneficiaries of that as well,” Rennie said.

At the same time, the company is accelerating investments in automation to offset the impact of rising costs. Domino’s anticipates an additional £3 million in annual expenses due to labour cost increases but remains committed to offering competitive pricing and discounts to maintain customer loyalty.

Digital Growth and Customer Engagement

Domino’s continues to strengthen its digital presence, with the app now accounting for 76.3% of all online orders. The company has 9.5 million app users, and its loyalty programme trial—initially launched to 630,000 customers—will expand to three million participants before a full-scale rollout in 2026.

In 2024, the company fulfilled 71.7 million orders, a 1.7% increase on the previous year. Delivery orders grew by 2.4%, while collection orders saw a modest rise of 0.5%. Average delivery times stood at 24.5 minutes.

With a strategic focus on value-based marketing, Domino’s aims to drive further growth in collection orders in 2025, complementing its already strong delivery segment.

Leadership Changes and Market Sentiment

Alongside its financial results, Domino’s announced a key leadership transition. Ian Bull will take over as Chair in April, replacing Matt Shattock after five years in the role. The move is pivotal for the company as it navigates expansion, technological investment, and economic headwinds.

Despite these growth initiatives, investor sentiment remains cautious. Market analysts highlight concerns over Domino’s ability to sustain momentum under its new five-year framework. Dan Lane, an analyst at Robin Hood, noted:

“Uncertainty seems to be the theme today at Domino’s. UK shares are now much cheaper than its US counterpart. To regain investor confidence, profits need to start accelerating under the new framework. If they don’t, investors are likely to pile even more pressure on the pizza brand.”

The Road Ahead

Despite short-term headwinds, Domino’s remains confident in its ability to navigate economic uncertainty and sustain long-term growth. The company’s commitment to expansion, digital transformation, and automation positions it well to adapt to shifting market conditions.

With a strong franchise network, a growing digital presence, and a clear profitability framework, Domino’s aims to balance rising operational costs while maintaining competitive pricing and service efficiency. However, investor scepticism suggests that the company must demonstrate sustained sales momentum and deliver on its ambitious growth targets to regain market confidence.

As Domino’s continues its push toward 1,600 stores and £2 billion in sales by 2028, its success will depend on strategic execution, customer engagement, and market resilience. Whether the pizza giant can convert its expansion strategy into sustained profitability remains to be seen—but its next moves will be closely watched by both consumers and investors alike.