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The entities and market setting

Domino’s Pizza Enterprises Limited - The Legal Entities

Domino’s Pizza Enterprises Limited [ACN 010 489 326], a publicly listed company, is the ultimate holding company of its subsidiaries. The principal activities of Domino’s are the operation of retail food stores and franchise services. In 2017, Domino’s generated a total revenue of $1.073 billion including sales and other revenue1.

Domino’s is the largest pizza chain in Australia in terms of both network store numbers and network sales. It is also the largest franchisee for the Domino’s Pizza brand in the world outside the USA.  Domino’s holds the master franchise rights for the Domino’s brand and network in Australia, New Zealand, Belgium, France, the Netherlands, Japan and Germany. The Domino’s brand is owned by Domino’s Pizza, Inc, a listed US company.

In 2017, during the time of the FWO’s audit, Domino’s reported to the FWO that it operated in 662 locations in Australia, with 66 (or about 10 per cent) of those being Domino’s owned stores, and the remaining 596 being franchise operated.

The majority of the franchisees are small businesses.

Market settings

The Australian Pizza Restaurants and Takeaway industry encompasses over 4,200 businesses that generate $3.3 billion in revenue2.

Domino’s has a market share of 5.1% of the Fast Food and Takeaway Food Services industry and a market share of 29.8% of the Pizza Restaurants and Takeaway Industry.

Competition in the fast food industry has escalated over the past five years, as traditional operators have fought for market share and new establishments offering healthier options have provided alternatives to customers3.

To improve their sales, Domino’s has expanded the number of its stores and adopted new digital ordering methods and improvements to delivery service including ‘GPS driver tracking technology, SMS ordering systems, online ordering services compatibility with the Apple Smart Watch and a 20-minute delivery guarantee’4.

Developments in technology have enabled a more personalised customer ordering experiences, with an increase in the use of direct and third party online ordering systems over the past five years. Most orders for Domino’s Pizza are now received online5.

The rise of industry competition has seen larger chains such as Domino’s and Pizza Hut compete aggressively on price, both with each other and with other delivery-based fast food services. This trend, coupled with increased capital requirements, has reduced profit margins over the past five years, particularly for operators like Domino’s that have been early adopters of new technology and communication platforms, and whose business model relies on a high turnover of products at the lower end of the market6.


 
  1. see Domino's website Investor page external-icon.png
  2. Vuong, B. (June 2018). IBISWorld Report: Pizza Restaurants and Takeaway in Australia. Retrieved July 10, 2018 from IBISWorld database
  3. Vuong, B. (2017). IBISWorld Industry Report H4512. Fast Food and Takeaway Food Services in Australia. Retrieved July 10, 2018 from IBISWorld database
  4. Vuong, B. (2017). IBISWorld Industry Report H4512. Fast Food and Takeaway Food Services in Australia. Retrieved July 10, 2018 from IBISWorld database
  5. Vuong, B. (June 2018). IBISWorld Report: Pizza Restaurants and Takeaway in Australia. Retrieved July 10, 2018 from IBISWorld database
  6. Vuong, B. (June 2018). IBISWorld Report: Pizza Restaurants and Takeaway in Australia. Retrieved July 10, 2018 from IBISWorld database