Even though sky-high food prices and a cost of living crisis have forced people to cut back on expenses, people’s love for pizza has remained strong.
Domino’s U.K., the British franchise of the American pizza chain, reported strong results for the first half of 2023 despite hiking the price of its pizzas last year to keep pace with inflation.
“While we continue to face a challenging and uncertain macroeconomic environment, we remain confident in the many opportunities we see for Domino’s in 2023 and beyond,” interim CEO Elias Diaz Sese said in a statement Tuesday.
For the first half of the year, Domino’s orders increased by 2.8% compared to the same period last year, helping it grow underlying profits by 8.2%.
The group’s market share also grew 7.3% in the April-to-June period, up from 6.6% the previous year.
In addition to the optimistic results, Domino’s said it plans to buy back £70 million worth ($90 million) of shares—a sign that the group expects robust growth in the coming months.
In July, food inflation grew at a slower than expected pace in the U.K., marking early signs of easing price pressure.
With food prices slowly normalizing and consumer demand looking resilient, Domino’s plans to halt price increases on its pizzas, which helped it make higher margins in the last few quarters.
Even still, it expects to achieve between £132 million ($168 million) and £138 million ($176 million) in profits, surpassing analyst estimates of £127.6 million ($163 million).
Bring in the pizza lovers
Through a period of economic uncertainty, a “strong focus on great deals” has helped lure more customers even when their budgets were squeezed, a spokesperson at Domino’s U.K. told Fortune.
“There are even stronger deals on collection, which is proving a particularly popular channel for customers,” the spokesperson added, referring to orders placed online and picked up at its stores.
Domino’s has also been experimenting with innovative items on its menu to pique consumer interest.
“We aim to attract and retain new customers through a strong pipeline of new pizzas, sides and desserts, and to increase order frequency through innovation of our core menu,” Domino’s said in a statement.
Some examples include offering vegan options to celebrate “Veganuary” in January and the launch of a Mexican-style chicken pizza in May.
