Domino’s Pizza Enterprises' digital investment slowed in the back half of 2022, but still came in at more than $23 million.
Its spend comprised a “digital capex” of $23.3 million, along with back-of-house systems upgrades reported as part of $5.5 million in other capital expenditure, which CFO Richard Coney said was predominantly devoted to systems.
“We’ve continued investing to improve operational efficiency in stores, and give our store managers the tools to manage that complexity,” he said.
Group CEO Don Meij said the Domino’s new generation mobile application is “delivering a record proportion of online sales”.
Domino’s also deployed a “wallet” app that lets users save app-only specials.
The app and wallet, along with enhancements to voucher tools and GPS capabilities, made up the $23.3 million “digital capex”.
Last August, the pizza chain said it had spent $137 million over the 2021-2022 financial year on digital initiatives.
That year saw the initial launch of the app, the replacement of its online ordering system, as well as the deployment of GPS capabilities.
Sustainability is also starting to make itself felt in the Domino’s digital strategy.
Chief environment, social and governance officer Marika Stegmeijer identified data quality and measurement across the entire supply chain as key to help target environmental, social and governance (ESG) actions and report on progress.
Both in-store and online sales are slightly down on the first half of 2022. In-store sales fell four percent to $1.97 billion, and online declined 4.5 percent to $1.53 billion.
Domino’s attributed the decline in online sales to a fall in sales through aggregator platforms, and a shift in consumer behaviour from delivery to carry-out.
Meij said workers' return to CBD offices was one example of what's driving carry-out: the decision to buy a pizza on the way home.
Meij also told the company’s earnings call that digital tools were allowing it to better respond to inflation.
Before the current inflationary cycle began, Domino’s was accustomed to rollout out price changes six-monthly, which gave the company a long cycle to market-test its prices.
Meij said Domino’s is now in the process of rolling out an internal price model and tool that allows it to respond more quickly to inflation of inputs such as produce.
