Domino's Q1 orders rise but VAT rise hits sales

Pizza chain Domino's on Thursday reported a rise in first-quarter orders but said sales were hit by a rise in value added tax (VAT).

Total orders in the three months to March 27 grew 5.5% against a strong comparative period in 2021 when the UK was under coronavirus lockdown restrictions.

UK & Ireland system sales, which take in franchises and company-owned outlets, fell 1.5 per cent in the first quarter to £365.9m as the VAT rate on hot takeaway food returned to 12.5% compared to 5% in 2021 as the government intervened to help businesses during the pandemic.

Excluding the impact of the increase in the VAT rate, like-for-like system sales, excluding splits, grew by 3.9%.

"It's no secret that inflation is a key challenge for everyone at the moment and the current consumer environment is challenging, but our scale and integrated supply chain, as demonstrated in the Covid-19 downturn, mean Domino's is well-placed to navigate the current conditions," the company said.