The British franchisee of pizza chain Domino's is expecting more cost inflation this year and has hedged itself against wheat prices which have soared in response to the conflict in Ukraine, it said today.
Domino's Pizza Group, a franchisee of US-based Domino's Pizza Inc, sources its wheat from the UK and Germany.
It and is hedged against wheat price inflation for the majority of 2022, its chief executive Dominic Paul said in an interview.
Russia and Ukraine account for 29% of the world's wheat exports and their conflict has driven wheat prices to multi-year highs on supply concerns.
"We buy wheat in scale, which means we already have good, strong relationships with our key suppliers," Paul said. "I think we are better able than most to mitigate some of those inflationary pressures."
The chain was already hedged against wheat price inflation prior to the Ukraine conflict, and has continued that strategy, Paul said.
Domino's Pizza also unveiled a £46m share buyback programme today as it reported a 12.5% higher annual profit, helped by a marketing campaign that boosted post-lockdown sales.
The company's media and TV ad campaign, targeting families and friends reuniting after coronavirus lockdowns, as well as England reaching the final of soccer's European Championship in July, helped boost orders, Domino's said.
The pizza company also said 2022 earnings should fall in line with current market expectations, adding that its first-quarter trading had "started well".
