We expect a more mild slowdown in Domino’s same store sales growth (SSSg) in key markets as higher COVID-19 cases are likely to lead to more sales of pizza. Our analysis of data from restaurant bookings in Japan has shown a drop recently, which is likely to lead to more home delivered food. Europe is also likely to have decent SSSg in 1H22e. In the report, we address  Domino’s Japan’s potential same store sales path; Domino’s Europe’s exposure to rising COVID-19 cases; and The upside and downside risks from here.

Domino’s faces a risk of slowing sales. We expect same store sales growth (SSSg) to slow meaningfully over the next 12 months. While Domino’s has had strong sales and store openings, some of its sales gains are a result of COVID-19 lockdowns in our view. In Japan we expect SSSg to turn negative in 2022, this is the region that had the largest growth over 2020 and 1H of calendar 2021. As economies reopen, consumers will have other food choices.