Domino's Pizza triples ad spend as sales struggle

25th Jul 2011 07:38

Domino's Pizza posted a sharp rise in first-half profits in the first half of the year despite the tough economic climate, but the pizza delivery group could see margins squeezed in the second half as it triples advertising spending.Pre-tax profits in the 26 weeks to 26 June rose to £20.1m from £17.5m over the same period the previous year, on sales that rose to £258.4m from £237.1m. But on a like-for-like basis, stripping out the impact of new stores, sales growth was 2.4%, a sharp deceleration from the 13.7% growth seen the previous year.Domino's, which operates 607 stores that have been open for longer than a year, saw like-for-like sales growth slow to 2.4% from 13.7% in the UK, while in the Republic of Ireland like-for-like sales were down by 8.4%, a slight moderation from the 10.5% fall seen the previous year."We are confident we will see our like-for-like sales grow more strongly in the next 26 weeks," said chief executive Chris Moore. "Our marketing spend to the year end will be three times the amount for the second half of 2010 and, combined with some great new products and a heavyweight brand campaign in the coming months, we are very excited about the future."---RG