The UK’s pizza delivery wars are heating up, with new figures revealing a clear split in fortunes between the two dominant players. Domino’s Pizza Group, the UK’s largest pizza chain by outlets, reported a 1.5% decline in like-for-like sales across its 1,300 stores for the 13 weeks to 29 September 2024. The company blamed cautious consumer spending as households continue to grapple with elevated food inflation and higher mortgage costs.
In contrast, Papa John’s UK operations, run by a network of franchisees, recorded a 4.2% increase in same-store sales over the same quarter. The US-based chain has been aggressively discounting its menu and promoting its ‘Double Deal’ offers, which appear to resonate with budget-conscious customers. Domino’s, meanwhile, has focused on premium products and loyalty perks, a strategy that analysts say may be losing traction in a price-sensitive market.
“The divergence reflects two different approaches to the cost-of-living crisis,” said Sarah Mitchell, retail analyst at Shore Capital. “Domino’s has traditionally positioned itself as a treat – something you have on a Friday night. Papa John’s is leaning into value, and that is paying off right now.”
For UK investors, the contrast is notable. Domino’s shares on the London Stock Exchange have fallen 8% over the past three months, closing at 324p on Tuesday. The FTSE 250 constituent now trades at a price-to-earnings ratio of 14.2, below its five-year average of 18.5. Papa John’s is not listed in the UK, but its US-listed stock has risen 12% year-to-date, partly on strength in its international operations.
The pizza market remains fiercely competitive, with smaller chains and delivery apps such as Deliveroo and Uber Eats also vying for a slice. Domino’s is fighting back with a new store opening programme and a revamped app, but the company warned that consumer confidence remains fragile. “We expect trading conditions to stay challenging into 2025,” a Domino’s spokesperson said. Source: Domino’s Pizza Group trading statement, Shore Capital research note.