Domino's shares plunge as inflation bites into consumer spending

(c) Sky News 2017: <a href="">Domino's shares plunge as inflation bites into consumer spending</a>

Shares (Berlin: DI6.BE - news) in Domino's Pizza have plunged after it posted a sharp slowdown in sales growth and said rising inflation was starting to bite into consumers' appetite for spending.

Analysts said tougher competition from rival Pizza Hut and an unsuccessful winter promotional campaign were also to blame. Shares fell 13%.

Pre (Shanghai: 600048.SS - news) -tax profits for the year to 25 December rose 13% to £82.5m as revenues climbed to £361m and more than 250,000 pizzas a day were sold in the UK and Ireland (Other OTC: IRLD - news) alone.

But a 7.5% rise in like-for-like sales over the year, slowing to 1.5% in the first nine weeks of 2017, was well below the double digit increases in 2015.

Chief (Taiwan OTC: 3345.TWO - news) executive David Wild said it was to be expected that the pace of its sales growth would eventually slow.

He also admitted that its 'Winter Survival' deal needed to be refreshed after four years.

Mr Wild also said consumers were "worried about rising prices" with inflation being driven higher thanks to the post-Brexit vote fall in the pound.

"They've seen petrol prices go up, food price increases and energy price increases and that's impacting their spending," he added.

Domino's confirmed that it planned to open a further 80 stores in the UK this year as part of its expansion plans , creating 3,000 jobs.