Domino's Pizza says Budget will cost it £3m - and it's big news for 38,000 workers

Domino's Pizza has projected a £3m tax burden resulting from the recent Budget, as it sets its sights on an aggressive expansion strategy to open numerous new outlets across the UK, as reported by City AM.

"As with other major employers in the UK, the recent UK budget has significantly increased the cost of labour for both Domino’s Pizza and our franchise partners, who are particularly impacted," the company disclosed in a stock exchange notice today.

"Although we have identified specific mitigation plans, we now believe that the annual impact for Domino’s Pizza will be £3m per annum from full-year 2025 onwards."

The pizza giant, which employs over 38,000 staff through its franchises, will feel the effects of October’s Budget that raised national insurance rates for employers.

This announcement was part of a broader profitability and growth framework unveiled by the pizza franchiser, which includes plans to launch hundreds of new stores. Domino's is targeting at least 1,600 stores generating £2bn in sales by 2025, and aims for 2,000 stores with £2.5bn in sales by 2033.

Presently, the firm operates more than 1,350 stores in the UK and Ireland.

To reach these ambitious goals, Domino's intends to invest between £3m-£4m annually in marketing, digital enhancements, and incentives for opening new franchise stores. Additionally, the company has committed to spending £4m-£5m each year to ensure "the continued stability and innovation of our technology platform, strengthening our cyber security and the commencement of the process of increasing our supply chain capacity".

Following the Budget and increased investment, Peel Hunt analysts have reduced profit before tax forecasts for the company by approximately 11 per cent. The company's share price dropped 3.3 per cent after the announcement and has fallen nearly nine per cent since the beginning of the year.