Welcome, everybody. Welcome to Brisbane and welcome to our DLAB. Today you're going to hear from a number of different people. You're going to hear from Michael Gillespie, who's our Chief Commercial Officer. So Michael today looks after our new area of shared services, which is a support office based out of Malaysia and another one out of Krakow in Poland. He also looks after all technology, so all digital and all related, and rolling up marketing because so much of marketing now has a digital footprint for our business. John Harney, we have a video with John Harney. John is our Chief Partnerships Officer, but John also looks after ESG.
ESG reports in to John, and I still chair ESG, but just from the amount of intensity and because of a lot of learning and development out of Europe where John is based today, he now heads it up. He also looks after all of the compliance parts of our business from food safety. It's independent from our operations team. They're not marking their own homework. He looks after all of the food safety, all of our team member safety, and also the audits of our stores for making sure the money gets into the business. Getting rid of any sort of black money around the world. David is our Chief People and Culture Officer. 120,000 team members approximately across the globe, and all of that rolls up into David. Then Martin Steenks, many of you know, is the CEO of Japan.
Martin has a video. David's here today. Michael's here today, Nathan and I. But Martin will also come in a little later for Q&A. So from a bigger picture perspective, what we're going to be talking a lot about today is our strategy. One of the most obvious things for any business is why does it deserve to exist? Why does it deserve to exist in 2024? And why does it deserve to exist in 2033? What is it about that business that it's focusing on, its strategy, and how does it differentiate? Or is it just getting commoditized and equalized into just averageness? But if I just start from where we sit today, our business network sales is up about 55% in the last five years. Our store count is up 58%.
What's really important to us, as you'll hear a lot about today, is our delivery count is up 63% over that time. Now, it's our belief from what we track and as we try to look into the future that we think about half of all retail will be delivered by somewhere just post-2030. That's really important to us because that's what we really focus heavily on. It's what we were born in as a business. The brand is now 64 years old around the world, 40 years old here in Australia. It's been, for most of our life, the core focus of the business. It's still, when we think of QSR around the world, it's how we really specifically think that we can differentiate. When we look at total global food delivery, now that includes grocery.
In 2024, it was approximately about $1.2 trillion or AUD 2 trillion. It's been growing at about 10% annually. And in the specific market that we compete in, meal delivery is currently about $600 billion or just under $1 trillion around the world. And for all of the growth that we've had in recent years, and considering in many of these markets, including Germany and France, where we have a real sizable market leadership, we're still very underpenetrated in many, many parts of the world. For example, we only cover about approximately 30% of Germany and France as large geographies of our business, as two examples. And specifically, when you look at QSR, for as big as we can be in pizza, because in almost every market we're the leader in pizza, we're still quite small in QSR.
When you look at the three jewels in our future crown of France, Germany, and Japan, we're less than 1% or even less than half a percent of QSR, and even in the most penetrated and pretty well one of the most penetrated major markets in the world being Australia, we're still only about 5% of QSR in Australia and 3% in the Netherlands and New Zealand as the other penetrated markets that we've been in the longest. What I do like about that is that what's interesting is that we were the fifth largest QSR in Australia up until the last couple of years, and we're now the fourth largest QSR, so we exceeded the network sales of Subway in Australia, and we're fourth behind Burger King, Hungry Jack's, KFC, and McDonald's, but it still shows how small we really are in the size of the market.
To a lot of people, the reality is 51% of all pizza consumed in Australia is a Domino's Pizza. We are still growing our market share. In the last two quarters, we don't have the summary of the March quarter yet, but in the last two quarters up to December, we were the fastest growth pizza company as well in total sales, in customer count, and share. In fact, our next nearest competitor will grow a third of their sales this year, their total sales, just in our growth this year. Put that into perspective, great in pizza, really small in QSR. Ironically, in most Western markets around the world, pizza is either one or two in market share for total QSR. In Australia, it's number three. For the history of Australia, we've underperformed as an industry.
What is unique at the moment is, for the first time that I can remember, both the two biggest pizza companies are growing, which I think is healthy for the category, be it we're growing from different customers. Then when we look at it on a global perspective, we're a minnow. We're still quite tiny despite, and as an ASX business in volume of network sales, it's significant. We're still quite small around the world, and we see a lot of opportunity in that. We've shared this over the last couple of years at our AGMs and in our market updates, and it really helps focus us as a business. Our mission is that we want to be the dominant sustainable delivery QSR in every market by 2030. It's really pointed and really focused.
For a lot of our history, when we weren't as focused, we would increase the size of our store footprints. We were putting tables and chairs in. We even did drive-throughs in some markets. And we drove up the operating costs of our business as we were just dominating in pizza. But today, and it's been that way for the last two to three years, we've really gone back to our roots. And I want to show you how we specifically interpret that in every element of the business. And that's largely what this presentation is about today and an update today, is that we can't do as good a job in an AGM and so on the amount of time we have, but to really specifically show how we think we differentiate and why we think we dominate.
So the three things that you're going to hear a lot about today is our food, our brand, and our people. Now, this is a bit of an eye chart, and as a result of that, I'm going to break out every component. But on one page, this is the strategy paper internally, which is global. The bottom one for meal occasions is a lot more Australian-focused just because we can relate you to it today. But everything in this from the four areas above, from the mission, our inspired product mentality, the way we think about designing to deliver, how we measure it all in operations, and we're so data-rich. It's amazing there's things that I know today that I wish I knew 30 years ago, and we would be even a much bigger business. And it's just from the data that we now get about our customers.
It's consistent around the world. It's global data. It's ironic that what inspires us, and we also know this from outside of DPE because we get to see some comparisons in other major Domino's markets, that the triggers are almost identical around the world. That's why it's a global strategy and then applied in a local way with products and some of the services. Let me break this out and explain it piece by piece. One of the benefits of the restructure last year in our business, which we're still consuming, and we'll talk a bit about that later, was that the realization that for about a five-year period, I felt like a consultant on our business. As much as I was the Group CEO, the business was specifically run by all the CEOs around the world.
And once I'd relinquished my exposure directly in the Australian business on a day-to-day basis, it's hard to sometimes understand why the plumbing's not working. It's hard to get an empathy if you're not physically working in some of these teams. If you're a customer or a partner with some of the other teams that work in our business, as it's got significant, if things are not getting the right result, it's hard to get empathy and understand why.
Coming back in and double-heading as the ANZ CEO and the Group CEO, having the time of my life in the Australia-New Zealand business, and one of the first things I started walking around the business, I'd have a lot of dinners at my house where you can just we sit with franchise partners and leaders and team members around the business or at visiting stores or the amount of time in this office, in this room, crunching out and getting everybody back on the page and reminding them of the business that we're in. We're a retailer. Specifically, we're in the business of creating inspired products and services.
So if I just put a very generic retail lens on this, in traditional retail, and I know it's much more dynamic today, but if we just think simplistically, because it still gets applied if you want to complicate it, it's that in the retail fashion business, a typical fashion retailer would launch four seasons a year. If they nail it, they sell out. If they don't, they discount it to move to the next to trend. They move it through the business. Or if they're a luxury brand, they destroy it. And that's really, really important because we're no different to that. And if you're a car retailer, once again, a little bit out of touch with how fast the Chinese are moving, but a traditional car retailer has a car platform for about seven and a half years. They nail it. It's full price.
There's waiting lists, and there's huge margins. You get a trash car that nobody wants. You're putting lipstick on a pig for the next seven years, and you're losing a lot of money on that platform. But you just got to discount it and try to make it look a little bit better and fix it. But that's retailing. When you nail retailing, you sell it at full price, good margins. Now, for most of our last decade, we were extremely competitive in pioneering services. So we were the first in major QSR to come out with digital and web of scale. Second pizza business registered in the App Store globally. And we really developed that whole mindset of a pizza store in your pocket.
That was a competitive advantage with, in this, well, not this building, building up the road in Albion, where we invented Pizza Tracker, which was the first of its kind. Even before Uber, we were doing GPS Driver Tracker and all these sort of services. They were inspiring services, and they really connected with the consumer, and they gave us a lot of competitive advantage. When we wake up in 2024, it's still a major focus for us, technology, especially in marketing today, the information. Also, you'll hear from Michael about what we call the leaky bucket, is that every customer counts, and digital and technology helps us with conversion and adding more customers and make sure that we can, if we ever lose a customer, that we can try and recover.
It's still an important part of our business, and specifically delivery time and convenience and speed of service is still very much digitally supported. But what we're really focusing heavily on is our differentiation product, which we haven't done as much of in recent years. And one of the things that you're going to see from us is that it may look like these products, to especially many of you, that they're really cheap.
And I often read reports where someone says, "Domino's is doing even more discounting," which is really, genuinely not true. It's just that that's a great value perception that we're giving the market. Because when we launch something like that Cheese Volcano there for AUD 10, it's AUD 10, it's AUD 10, it's AUD 10, it's AUD 10. And it's on the most rarest extreme. We can't control all of our franchise partners. We don't discount it. It's great value.
It was researched. It was tested, and it's launched at AUD 10. It's highly desirable. It's got great penetration. It's got phenomenal margin, and we've done that a lot in the last 12 months specifically here, and it's rolling through into other businesses, but you see the Domino's My Box; you rarely ever see that discounted. It looks like it's amazing value on a constant basis. It's got phenomenal penetration in our business, and these are some of the highest margin products we've ever launched in our history, and that is our commitment with our franchise partners. Our franchise partners is that if we, like any other fashion retailer or any kind of retailer, if we launch inspiring products that resonate with customers, we shouldn't have to discount them. However, if we do not, if we deliver uninspiring products, then we will end up discounting them.
There are two parts to that. It's our responsibility to be creating these inspired products for all of our research and innovation and so on. But we have to make them inspiring in a store. Because in our measures, if we engineer something that's too complicated or just a team is underperforming and we execute it uninspiring, which can happen, then it's still we look at our stores, and you can see the best stores to our lowest performing stores. The lowest performing stores, to connect with the customers, have to do more discounting. The highest performing stores do less discounting and are just able to perform very well on these inspiring products. That's what we're constantly selling the business to our team is that it's a job of we talk about our partnership with our franchise partners.
It's our job to bring high-margin, inspiring products and services to the business. And it's the role of our stores, whether it be corporate operations or our franchise partners, to execute them in an inspiring way. And of course, we've still got to be able to give them the systems to do so, and technology plays a part in that. So how do we interpret that practically in the business? So I was sitting in this room yesterday with the IPD team, the inspired product team. And every product runs through this triangle. And the Australian product triangle's well out into 2025 and conceptual to 2026 at the moment. So pretty well everything to the end of this year and early into next year is tested. And I put a little caveat in that. We are retailers, and we may be testing in a window where things can change.
Therefore, that product may have been tested, for example, in an aggressive discounting window like we saw in Australia in January to March with the burger players as they're trying to recover some of their lost customers, particularly one burger player. Now, if you're testing in an environment, but you launch a product in a less discounting environment, you can get a different result, right? So as much as we've tested our products, we're constantly looking into the future of when do they actually launch. And typically, we have a segmented menu, and we may prioritize part of that segmentation based on the market we think we're entering because it can shift the data and the statistics.
But when we sit in an NPD meeting and a product's brought up on the screen as a conceptual idea, the first thing is that the obsession around how it's designed to be delivered. Everything. It's pointless any of us looking at a product that came straight out of the oven because none of our customers eat pizza straight out of the oven. Our customers eat our pizzas that are three to 10 minutes old; that's the typical average somewhere in there. And we have a look at performance at around the 15-20 minutes as well. Very different to a drive-through customer, very different to somebody who's sitting inside a fast food restaurant where they're getting the product sitting right down. So for us, we've got to, when we're sitting in here, the products are 10-15 minutes old, and then we're judging certain characteristics, but we're obsessed.
You're going to see that in a minute because you really, really can tell, as an example, just in packaging. You'll feel and see the Domino's obsession in that area. The second thing we ask ourselves is that we have a sustainability agenda, Domino's for Good. So how do we use our product innovation as a platform for making sure that we can drive that agenda forward? All of our cheese in the Asia-Pacific region right now comes from one factory, and it's all the same recipe right now. It took us nearly three years to develop. It's tastier, it's stretchier, and it's actually better for the planet. The better for the planet component has a long journey. We have a dairy initiative. It's a global dairy initiative where we work with our largest cheese partners.
And we're constantly talking and trying to think about how we're going to cheese, is the number one impact on the planet from Domino's, cows. That's by far the biggest thing that we can improve. And so that's one example. But the My Domino's Box, for example, is three boxes in one. It consolidated three boxes in one, obviously very efficient from a. That's the irony, by the way, of sustainability for us. It actually eventually ends up getting us a cost advantage. But by and large, when we're looking at a product, we're saying, "What part of our ESG agenda is this progressing?" Including sometimes it can be just even as simple as the margins for our franchise partners that are specific products head-on trying to improve margin. Because obviously, we're a much more sustainable business. It's very clear if our franchise partners are a lot more profitable.
But that's not where we just put all of the focus. The focus is on the whole agenda. And then finally, the Domino's X Factor or the pizzaness. The pizzaness and the X Factor, there's certain characteristics that customers relate to us. Because we were first to market and we spent so much money in 2008 to 2010 on our Lava Cake marketing, that's associated with us. So ooze, chocolate ooze is associated with Domino's. That's a Domino's-ness. And oozy things, cheesy things, stretchy things, that's associated with Domino's. Oven-baked, we don't fry. We don't fry anything in our stores. Nearly all other QSR fries things. We don't. We bake things in our businesses. That's also an attribute. And so forth and so on. And when we put all those three things together, we do not know a single other QSR who focuses exactly like this.
They may be focusing on ESG in their own way. They may be focusing on their burgerness and so on or their fried chickenness. But none of them are obsessed. There's not a single player up here. They're all our biggest competitors. Later on, you can come up here and you can have a look at the box. But nobody does these things. Every single one of them, it's just not designed to be delivered. It's not rock hard. Every single one of them. And that's how that's all delivered. That's all delivered food that we had delivered. Whereas in our pizza box, we're obsessing over the D, which holds the pizza in place. It also brings more rigidity to the box. It steps off the table with its steps so that it doesn't go soggy into the base. It's got steam chutes out the other side.
The flute of this compared to our next biggest competitor is a much stronger flute. It's an E flute. It's a B flute. That means it's a thicker corrugated cardboard for more rigidity. The irony is we do pay a few more cents for that, but we think it's worth it because we think that it differentiates. And so more and more and more, as we think about the hot bags that we deliver it in, when we think about the packaging, when we think about the specific ingredients, the coating on those ingredients, the performance from baked, from fried, all of these sort of things, we're constantly thinking how we take that up the curve for delivery. That's just the food. More sustainable, designed to be delivered, and the pizzaness. Now, we also differentiate carry out in this exact way.
So our mindset is this, is that all of our meals are going to be consumed off-premise. They're going to be consumed in a home, in an office, in a park. They're not going to be consumed on our property. Very, very few are going to be consumed on our property. And so therefore, the premium service is Domino's delivery. That's a fully dedicated Domino's trained team member. Most of the time around the world, it's in a Domino's vehicle, not as much in Australia and New Zealand where we do use the driver's cars a lot more. But for most of the world, it's on an e-bike or an e-scooter. To all of the hot bags, the packaging, and so on, it's a premium service. It's through our app mostly around the world, 80% or more. And that's Domino's premium designed to be delivered.
But even if the customer chooses to collect the food, we have to think about the performance. They're choosing to be the driver. People choose carry out for us or pick up. They choose that for two reasons. One is their own convenience. They may be more of a control person. They like to be in control of the experience. They don't get a lot of things delivered. It could be because it's convenient on the way home, and it's just much more convenient than wondering if it's going to be 15 or 30 minutes. And they choose price. They're more value conscious as well. The crossover between a premium service from us or a carry out customer rarely is more than 10% or 15% shared group. They really are different people.
And so when we think about the customer, you'll see more and more development for us of how do we help that customer get that product. They're choosing to be the driver. Now, how do we help them get that product at a higher performance for when they're going to consume it? Because the more we take up product quality, the more we can improve that service outcome, the higher our NPS and the higher frequency and consumption. And the data correlations are phenomenal. I'll show you that in operations in a minute. Now, Michael Gillespie and I were just before COVID. We're sitting in Vegas at a MARS conference, machine learning, AI, robotics, and space. And Jeff Bezos was on stage. And it was a really amazing thing that Jeff said is that somebody asked him and said, "Oh, Jeff, what's the technology of the future?
What's it going to be? And what do you predict?" And he just said, "Look," he just laughed. And he said, "Look, that's a really dumb question, to be honest." He said, "Because anything I say, you'll all laugh at me. There'll be a YouTube video of this. And 10 years from now, you'll look back on it and I was wrong." Because predicting that's pretty hard for technology. But he said, "Let me tell you what I will be right about." And he said, "And this is what we focus on at Amazon." He said, "What are the things that you know absolutely will be constant about that business? And if you innovate against those constants, you'll be right." And at Domino's, I'm never going to want my pizza to be cold.
I'm never going to want the temperature not being really as crispy and as hot and as fresh you can possibly have it. Time's the enemy of food. And we don't believe in 10 years from now anybody's going to want it to be compromised. They're going to want it to be better and have better and better expectations as our competitors in the industry also innovate. They're going to want it to be longer. It's not like, "Yeah, I reckon 10 years from now I want it about an hour." I'm going to want it conveniently. For us, that's a really weird moment, 18 minutes. I can't tell you why. But below 18 minutes, the customer gives us no credit. And the longer we go outside of 18 minutes, we get less NPS reverses. But at 18 minutes, in every single market in the world, it hits 18 minutes.
The more we spend, you know that we've had a project for Project 310, which we still work on because Project 310 helps us get in and around 18 minutes a lot more often. But the irony is 10-minute delivery gives us no more credit than 18-minute delivery. It's really bizarre. Magic place, 18 minutes. We also know that about product quality. Our customers rate us out of 5. At 4.5, we hit a sweet spot like you've never seen. Now, I talked earlier about things I wish I knew 30 years ago. If you would have told me 30 years ago that customers' difference between a 4.1 and a 4.3 product rating was a lot, I'd go, "No, you're kidding. There's no way. That's just so close.
There's not a big difference, but I can tell you our obsession over the 0.1s and the 0.2s has a material difference in NPS. When we hit 4 and then it just accelerates, and at 4.5, it's literally a J curve. We don't ever get a J curve out of delivery. It just accelerates and then peaks at 18, but in product quality, all the way to 5, it just hits a J curve. So we're obsessed with trying to get to 4.5 across our group because that's magic. So 18 minutes and 4.5. We execute those. We have a great business from an execution point of view, and of course, we're in the value business where other QSR and people are going to want that better value. So we also talk about segmentation of business.
So when you think about the product innovation that we're doing, one of the things is we have a lot of frequent users, and they like to get excited by trying new tastes and new products because they buy a lot from Domino's. We do have customers that can buy two or three times a week from a Domino's business. And so exciting by refreshing the core and keeping that menu interesting excites the core customers. Then we're tackling new segments. We were the fastest growth QSR in lunch last year, now off a much lower base. We're nowhere near as big as the burger and fried chicken team. But we did. We really grew heavily with My Box and Melts. And we were also being really chasing snacking. And you can see that's a very clearly pizza product. That is not burgers and fried chicken.
And then the third factor we talk about is entertainment or entertainment in a sense, in the new media platforms, your TikToks, your Metas, your YouTubes. There is a really good position to drive brand conversation and engagement through entertainment. And Michael will talk a bit more in detail about that. So that's a bit of a focus on our food. So let me talk to you about something that's been quite constant in our business and why it's still constant and it's as relevant today and its competitive advantage in our category. Ultimately, fortressing helps us still deliver a by getting closer and closer to the customer, we achieve more of that product quality and that service because time is the enemy of food for both. Our product quality scores, the longer the time, the more they get worse, right?
And so getting it safely at an affordable price really is really important to us based on the size of our delivery areas. It's essential to also maximize the brand investments in technology and so on. And it's essential to build our profitable sustainable network for our franchise partners. People often forget because we talk about DPE as this business and so on that we're very, very focused on the food delivery business, whether the customer, that's the driver, or we're the driver. That's our obsession. And product quality suffers as the runtime gets runtime. By the way, runtime is the average. So that's what we call runtime. As it gets out beyond 10 minutes, and also profitability suffers. When minimum wages are going up the way they are now, they're not going up in cents. They're going up in dollars, yen, hundreds of yen, and euros. And they're material now.
And they really, every minute is so material to the average profitability of an order in our business because of just the real cost per minute of a team member today. And so the model we've been sharing now for a number of years that when we execute well with the customer, product quality, getting it down towards that 4 point or up to that 4.5 and down to that 18 minutes, the closer we get to that, it means that our franchise partner profitability, they're more efficient. So their yield and labor improves. Product quality improves. Therefore, customers have a greater frequency. As their profitability improves, then they start thinking about how do we get closer to the customer because there's still parts that are inefficient. Brisbane is one of the most penetrated Domino's markets in the world.
We constantly still put stores in here because it's also still a high-growth market for houses and so on. We'll have stores that they just get so big. Apartment buildings are going in. When I was a franchise partner, I used to own a store called Kedron, which is about 15 or 20 minutes from here. I think there's about six stores in that area today, including the one that's right here. So we would have delivered to the butter factory that used to be here some 20 years ago. We just opened up Newstead's store two weeks ago. Newstead's one of the fastest growth pockets in Brisbane. It's literally a three-minute radius. All young urbanites target pizza market opened just marginally below our national average from day one. Very efficient store. It's a later store if you want to go and visit it near to here.
It just continues to prove this. As Cam Smith, who's one of our biggest franchisees, Zeke has continued to execute in that store. We just see that store grow. It just means you just keep getting more and more penetration. One day we should have a store in Albion. We have a pocket between here, Clayfield, Newstead, and so on. For us, often in a tight market like Brisbane or Canberra, Newcastle, Perth, and so on, our biggest challenge is more it can only be about there because it's got a tight area. You've just got to wait for buildings, construction, and so on to take place to fill out those last thirty-ish stores in Australia and New Zealand. We also believe in the power of franchising. Our franchise is different to a lot of other franchises.
That is that 90% of our franchise partners come from within the business. They start as team members like myself. They grow, and my sister, who's a COO here in Australia now, start as pizza makers or delivery drivers, grow through the business, get the opportunity to invest in their first store, grow from there, and build out a business. Our goal is still to be in the near-term five stores for every franchise partner throughout DPE. One of the short-term benefits of us stabilizing at the moment and growing into ourselves is we can grow into that. But our long-term focus is 10. Why are we not mimicking some of our other peers around the world is that we also think that we need to be the largest franchise partner in our own business with our corporate stores.
We think that's the right strike of balance is that we're actually in the business, and we think that we do need to keep the proper partnership that sometimes if a franchise partner gets too large and we don't have anybody anywhere near that in our business, then that can create different challenges about who really is driving and growing the business. What's also unique to Domino's that's different to a lot of other QSR is that when we buy a Domino's franchise, as a franchise partner, you get a territory. You own that territory. It's yours for 10 years, and you can upgrade in five-year increments, but contrary to other fast food businesses, we can't just go and put a store in your area, or we can't have somebody else just put a store near to you and take your territory. It belongs to you.
You either decide yourself to put a store in that area, you sell the territory, or you can sell your store, but you own that territory for 10 years, and that's really important because in a Domino's store, if you're in the big box retailers with the drive-throughs and so on, they're often a significant part of their goodwill, is the actual location. It really plays a material benefit in the performance. Location matters for us, but our territory is the highest value goodwill to our franchise partners. We look at our stores as dollars, euros, yens per household. That's how, when a franchise partner's looking at the valuation of a store, how penetrated are we? and those dollars per household is also what they'll sell territory for.
It's a really large competitive advantage of how penetrated and how high you can get those dollars per household for a valuation in the business, so over time, population changes. I remember when we first put the Hamilton store in about eight years ago, everyone laughed. They said, "Well, how many people still there?" Now, 50% bigger than the national average, high-performing store, and it's just because there's all these apartments going in around here, but also, over time, labor costs can go up because even with close proximity, as density of traffic builds up, more traffic lights, it also can slow down delivery, so from here to Albion, which is the boundary, without traffic, it's probably about a five-minute drive, six-minute drive. With traffic, it could be a 12-15-minute drive. And they're so close. It's really close. It's the next two suburbs away.
Those things make a difference over time, and it is what helps to drive the rationale of why you're better off putting a store in that location in the future. The other thing that's really important to note, because this sometimes confuses people who don't appreciate our business, is that often when we put a store like Newstead in, Newstead is now taking the lower profitable customers from the New Farm and Hamilton stores because they were the furthest customers, but the most costly to service and probably would have had the lowest scores for NPS because obviously they're further away.
Just by the nature, if you get there a little longer, product quality. Time is the enemy of food, and speed of service meant that those customers had the least experience from the Hamilton and the New Farm stores, and they cost the most to give them that experience. But once the Newstead store goes in, those least profitable customers now become highly profitable because they're very, very close. They get a much better experience. But the other thing is you don't drive from Hamilton Hill to Newstead to get a pizza. It's just not your natural instinct to do that. There's just too many things to cross over from there. People from Newstead don't drive here to Hamilton or rarely would have driven down to the other end of that little mini peninsula to buy a pizza.
So then you create new consumption of the carry-out customers that you're now in the neighborhood. They're the people that either walk to their store, in the case of Newstead, or drive past that store to pick up, and that's where you get new consumption. And that's through improved customer experience, through profitability to that store for that customer, plus the new carry-out customers, that creates new viability. And the maturation curves are typically in Australia and New Zealand, three to five years. Most of Europe is similar. Unfortunately, in Taiwan, Japan, that's out beyond seven years. So it just takes longer, and Martin will talk about that in his presentation. And you can see here that the longer it takes us to deliver, and 21 minutes still isn't a bad time. When you see these out, we were getting this delivered. Oh, Izzy's in the room. She had these.
And unfortunately, it didn't even arrive in the end. She had to go and get it another way because it was an hour from our competitor, and it didn't even turn up. But you can only imagine what an hour-old food tastes like. And we can see it on our product stores because, of course, we have some moments where we underperform. And yeah, we have a policy. You can't do triples, aggregators. Triples are standard because the third pizza, it's like a free order. It really is a bad experience. So we really fight hard to do singles. We talk a lot about that in the business. But in fairness to commercially to a store to operate, singles are much more convenient when you've got a three- to five-minute drive time. They're not convenient when you've got these 10-minute drive times and so on.
But the pressure falls on the store to get that order fulfilled, and they then start adding orders to the. And as I've already said, product quality, which, by the way, is a bigger driver than delivery time on a rating. I know that sounds obvious to maybe all of you, but as a pizza delivery person, we used to put more on the time than we did on the quality when we used to marry up the compromises of life. As we've learned from our data, second to none is product quality, but it is supported by delivery time. And you can see there that our business, there's still lots of opportunity to reduce delivery time. We still have so much opportunity to maximize and fortress in each of the major markets around the world.
Now, before I hand over to Michael, I just want to talk a little bit. Today's not a trading update day. It's more strategy. But one of the ways to clarify for you as our shareholders and analysts is that where is DPE today in the way that we're performing as a business? And I put our business in three buckets. Our first bucket is the markets where we're performing and ready to go pretty imminently back into store growth. That's where we've got healthy customer account growth, healthy sales growth, and improving margins. And therefore, we believe the unit economics warrant opening stores. So we expect to see more stores opening in Australia, New Zealand, Germany, and Singapore into next year. In fact, I just come back from a month overseas, and nearly 70% of my time in Germany was just about getting back to growth.
It's the highest margin business in our business right now. It's a really high performer. Ironically, it had the highest inflation in our business too, and closest affected by the Ukraine war. But anyway, those businesses, it's business back to the DPE that you've always known or DMP that you've always known. Then we have some businesses that are temporarily, we think they're not broken businesses. They've just got some temporary things. For example, in the Netherlands, it took a 15% wage increase in January, and the Netherlands was a high performer all the way through this inflation period. But just at the moment, some of our franchise partners have broken away from our strategy in pricing. We think it's only temporary because we can continue to illustrate that if they follow up the other 60% or 70% of doing, we'll get back on track.
That's the nature of franchise businesses, right? That we can't control all pricing. It's illegal. And from time to time, in an extreme moment, partners can break away. But Dutch business, Benelux business, great business, and has had strong performance for such a long time, but right now, just consuming that labor. We're very aware of the external tensions that are affecting the Malaysian business right now, but a really high-performing business. In fact, in a normal environment, when you lose the sales we lost in Malaysia due to the external events, we would normally probably rethink right now. But we're actually still profitable in Malaysia. Part of that was also supported because we don't have a commissary there anymore. We went to back of house. They've done very well with that.
I think the Malaysia business looks like the Singapore business as soon as the external event goes away, and it's the first time that we've been influenced by that sort of external event, but it's not the first time those sort of external events have affected the nature of these markets. And as a result of that, the belief is that it rebounds as soon as that external event stops affecting that business because it's not broken. It's just got an external factor on it right now, and as I said, it's still quite profitable. And then there's three businesses that I think are still structural and that we still need to do more heavy lifting on. And specifically, we've talked heavily about Japan today, and so these businesses still, we've got to do more heavy lifting to move them into bucket two or bucket three.
And that's France, Japan, and Taiwan today. Taiwan's borderline probably could jump into bucket two, but because of the buy cycles in Asia, we wait for a longer period of time in hindsight learning now before we move them into a different bucket because we may be seeing sometimes false positives because of the buy cycles and so on. All right. Our franchise partner profitability, one of the things that we want to confirm and clarify is that, yes, we need to get north of 130 again to get strong unit economic growth across our business. Where we get towards that three-year payback as we will well and truly be on that in Germany, and we're targeting that in the next six months here in Australia and New Zealand with the progress we're making, stores open.
Now, a 30%, 40%, 50% improvement in profit does not require a 30%, 40%, 50% improvement in sales. In our business, there's a 30%-40% contribution margin past breakeven. And what you've seen is when it delivers. In other words, inflation has driven up the breakevens in most of our markets. And if you haven't, then that's just eaten into that 30%-40% margin because the breakeven has just gone up. But once you get past that breakeven, the profitability returns materially faster. And nothing points at that more extreme than the three winning markets at the moment, four winning markets at the moment, how quickly that eats in itself. And so, yeah, even because of the pipelines for stores, if all the momentum points, we start triggering store growth now. It doesn't mean we may sign a lease or whatever in Australia.
In Germany, definitely sign every lease you can get into the new territories. But as we're just about to bridge that moment, let's get on with store growth and continue to deliver our plan. But if you're in bucket two or bucket three, you're probably not focusing on store growth right now. You're still focusing on dealing with the temporary or more structural issues to get the business into a more profitable place. I can confirm that the restructuring costs are on track. I have every confidence that I'll report that in August. It was a big number, but in some areas where we found that we were too aggressive, we've made it up in other areas where we weren't as efficient as we could be. So I'm still very confident in that.
And one third of that will be passed through to our franchisees and is being passed through to our franchise partners as it happens. So that's all part of the plan. Internally, we call that Project Rebase. So it's just rebasing the business, and it's effective and working. All right. Finally, my last slide is that we wake up here today, and we service 118 million population in the markets of DMP, 25% bigger than the U.S. and a GDP pretty similar to China when you add all those markets together. We still believe in our outlook. The longer we are in bucket two or bucket three, it will put pressure on those timelines. So if we don't get out of that bucket two, bucket three, then we would have to revisit. Right now, because we're out of it in ANZ and Germany and Singapore, they're off and running.
That's back to business as usual and the DMP that most people have experienced for the last 19 years listed. But yeah, when I grew up in this business, I used to have two MDs of the rest of the Domino's world, not very many stomachs in Australia, and the Aussie peso , right? We'd go to Worldwide Rally. Everything's measured in US dollars. In one minute, we're parity, and the next thing, we're half. And today, well, the euro and yen are also depressed against the USD with this. We've got really strong currencies, really good markets, highly populated Westernized markets that we're very proud of, and high expectations for growth. All right. Thank you very much, everybody. I look forward to answering your questions soon. Over to you, Michael.
Thank you, Don. So let's jump in now on the back of Don's presentation. And what I'm going to really talk to you today is a bit about brand and product and also to why that fits into that technology. When we look at our brand, think about Domino's as everything we do from a brand perspective is driven by a product or service. So we're going to talk about lunch. We're going to talk about dinner. We're going to talk about free lunch or snacking. It's got to be driven, not just saying the occasion's great or the occasion. The customer already knows that. It's about giving them products, giving them services in those occasions to really show why we deserve to exist in that category, whether that be a time or a particular customer segmentation and targeting. And then how do we use technology?
People don't come to Domino's to use our technology. Our technology is a catalyst or a solution to actually get the food or to get a service via us. So how do we make sure that technology enriches that experience, but it also showcases the great food we have? Don talks about edutainment, and you're going to see examples. We have Australia's our petri dish. And from a role perspective, Australia's been the greatest involvement from my perspective and my team as we're growing out our center of expertise in our global environment experience. We've been really able to get to the crux of this. And when we've got these great food and products, how do we expose them to our customers using technology in the right ways and some of the new digital mediums?
If we are going to be the dominant sustainable delivery in 2030, we have to be in the most dominant delivery platforms, and that's aggregators. And I'll talk about how we're actually playing in those and how we're learning and continuing to evolve and also take those learnings across from a group perspective to other markets. So I just want to remind everyone, Don talked about design to be delivered or how do we actually come up with our products and services, even our technology solutions. And you might see Don talked about the great packaging. You can compare that and make your own judgments against up here the competitors. But also every message, you're going to see a video through here on TikTok that we did in Germany around the doner kebab. That's not just a doner kebab.
We did how do you actually reinvent doner kebab, which is, I think, the most popular street food in Germany now? And how do we make it deliverable? And how do we make it unique? And that's pizza because we're a pizza company. And how do we deliver that, but also showcase it's deliverable by utilizing, I believe, the number one social kebab reviewer in Germany, or at least well-known for his kebab reviews? And how do we actually connect with people through other mediums and show why to inspire product? Because we've actually taken a kebab and made it deliverable. And you've seen Germany go very well from that. So it's not just through our products, packaging. It's subtle messages through our marketing as well that we do this and services in online. So we talk about media. The media landscape's changed significantly.
If you think pre-COVID, most companies, a lot of us, were still spending in digital, but also social has huge uplift. We've seen TikTok lift. We've seen the landscape change considerably. We've seen a move away from terrestrial TV into more about digital video platforms, so for us, that means Domino's as a player. It doesn't mean our dollars increase exponentially to every single new platform and all the new audiences. We have to be smarter about how we utilize these platforms and evaluate their worth, and also how we can use these platforms, as I said, to bring out that edutainment value, so I'm going to play a couple of videos here. The first one you're going to see is actually an ad that we put in social media within Australia for their version of the Cheese Volcano.
The second one is going to be utilizing and showing I don't want to say playing with the food because playing with the food can have negative connotations, but actually enhancing and making the consumer believe what else is possible with some of the food we've got here at play in more of an entertainment way than a playful way, and then the last one is, and I'm sure you're all waiting, is the doner kebab, and hopefully, a lot of you can speak German because then you can understand what they're saying, but I'm sure you'll get the gist of it, so if this plays on click, if not, I'll have to manually play them.
Want to order cheese? We love Domino's and new Cheese Volcanoes. Gooey, melty, delicious cheese in a pull-apart crust that makes any Domino's dish even more delicious.
Instead of social executions like that, through even the traditional banner ads that had cheese pouring down the screens as people are trying to read the news and hopefully getting distracted and ordering off us, it's about using this media to be rich and inspiring these products that our team is spending a lot of work in researching and validating against the customer, then, as I said, then you can really have fun, and I hope that creates conversation with all of you in here because I've already planned to get one on the weekend with my son and see, he loves food challenges because I think they used to be big on YouTube and other things, so I'm going to get one and see who can handle the most dipping and what can we try in there, so I challenge you all to do that.
Please order online as well. It'll be appreciated. But-
So. Yeah. I can guarantee with my diet, the apple's not going to be included, but I'll be doing a lot of bland food in there. And Don knows that very well. And the last one, here's this kebab. So think about it. It's why it doesn't have to be gooey goodness. It can also just be, as I said, an amazing product that people already like within a market and a new take on it. And why? If Domino's just did kebabs, we don't have a right to deserve against the 18,000 other kebab stores in Germany because it's just a kebab. But if we take a new take on it and put it on a pizza and make it taste as good or better than your local kebab, then we have a right because we've created a Domino's approach to it.
We've designed it to be delivered, and we've reached the customer in a product that they actually have a passion for. So I'll just play this video now.
[Foreign language]
[Foreign language]
For those who don't speak German, at the end, those were chili flakes. Obviously, if you don't want to create and customize it yourself, so we're obviously not going to put chili flakes on if you don't like. So you have the option of adding chili flakes. And also, that pizza's got green on it. I ate that as well, so I want that on my, it's really nice and really cuts through. And the main thing is it tastes like a kebab, but it tastes like a Domino's version of a kebab and delivers hot and fresh. So then when we look at it, the media landscape is so complicated these days, as we said. Even terrestrial TV, even though less viewers is going up in cost. You've got these new mediums that are launching.
You've got these new mediums launching different types of ad units all the time as well. So that creates an incredibly complex web. And I think there's a whole correlation versus or causation versus correlation argument that happens in any form of advertising marketing. The old ways of just saying, "Hey, we've got a click, and we've got to sell from that." You can say that's great, but that doesn't tell the whole story. That could just be pure coincidence that that customer clicked and purchased because they're already going to purchase that night. Or you could see sometimes people aren't clicking on it, but seeing it, but it's also enhancing the interest in the product and brand and post-purchasing after that. So what we do is, obviously, you can use initial reactions. You can use clicks. You can use observations of, "We expose this piece of advertising.
We sort of uplift on that particular day," but you actually have to go deeper these days, and media mix models aren't new, but what's evolving more is smart media mix models, where traditionally, businesses would look at this at maybe a six-month, if they've really got the investment, usually a 12-month review, sometimes even a bit longer. And what it does is assess really the success of each media item or each placement across an advertising platform, but what they've also done in the past, they're more around the placement, not necessarily what has the message, what has your pricing changes been, what is the actual lead time and a more accurate lead time measurement of what does TV, how long does TV or digital TV take to create a sale versus an SMS or versus a search ad or versus an email?
So we're partnered now with Mutiny, and we've done this a lot, Mutiny, sorry. We're starting again in Australia being the petri dish, but now into Asia and looking at Europe is how do we create these monthly, almost unheard of in the past, dynamic media mix models? So what does that allow us to do? It allows us to have more control and understanding of our media. Media has become more global. All of the platforms we are global now. Google is global. All the main social medias are global. Now, they might have different weights of presence in the markets, but they're all global. Their platform ads are global.
By having our center of expertise lead our digital purchasing with our local markets, what we can do is now give them more power than ever and more insight than ever on the success, but not just the success. We can say our placement works, but if you put the wrong item in there, what actual content is working in there? And then actually making forecasts with them over, "If we uplift spend in this area, when do we think we can reach the maximum output? When can we get the best efficiency out of the ads?" And this really, I believe, is going to be an incredibly strong player in our whole media purchasing and activity in the future because it really allows us to assess what you saw before, assess the value of a German critique on our doner kebab.
It will allow us to assess exactly which is falling down the screen and really creating that ad, versus relying upon a 12-month review where we're already lost opportunity. Opportunity loss is huge in any business. This allows us to erase that with our media spend. There we go. But we can't forget, beyond external media, and we've got all this amazing product and food coming out and so much more to come, is how do you drive your own media? Domino's is 80% digital. We've always had a presence in how do we create a voice to our customers through direct correspondence, not just relying upon third-party communication. But if we've got this, how do we enhance? How do we make sure that we're actually giving the best? And this ties into technology. You can see here, and I'll press and I hope it plays.
This is the Singapore website. This is stuff we can do on Singapore now, take learnings. You've got these beautiful visuals. You've got the Volcano coming through and really enhancing that because they're on the one digital platform. Now, when one market sees that, we can then say, "How do we release this into Australia or Japan or so forth?" SMS is something that we all get SMS too, and it's a valuable tool for us to connect with our customers. But how do we go one step ahead? How do we try MMS? How do we make your SMS visual? And how do we create the value in that to really drive? We can talk about a Cheese Volcano, but when you see the Cheese Volcano, when you see that, I'm sure you're all hungry.
And we should have probably done this close to lunch, Nathan, so they're even more hungry. But that's my feedback. But yeah, when you look at it, sorry, the marketing head, but when you look at it, you just go, "That's way better than us just telling you if you cover that picture." And you just sort of text explanation. That just enhances the experience. And thanks to the media mix model, we can also value what is that click and what is that message on that day really driven, rather than just making some correlations to performance. And lastly, our email marketing. Email marketing doesn't always need to be in your face around discounts. It also needs to be, "What is a product?" And some of these inspired products are amazing because we're not discounting it.
Cheese Volcano was AUD 10, but it has great sales and has great market for our team. So we can show it there. We can just say, "Here's our product for AUD 10," because we've got the value proposition right, and we've got the product right for the customer. So then we can enhance that through our emails. And having this global as well, I mean, we can get consistency in approach, but then we can also find learnings and testings in different markets and then bring them to other markets as well. And when we talk about our own media, we're doubling down and really reinvesting in how do we grow this own media. So we know that we have low double-digit growth in our online platform last year or last six months, which also outpaced our direct sales. But also, we had significant over-indexing growth in our email database.
What does this mean? Well, we've got. Don talked about it. We've got an addressable population of about 400 million out there in the markets we exist in, and we only have 17.4 million email subscribers in those markets. To me, that's a huge opportunity, not just opportunity for us to grow direct correspondence through email and other formats. It actually just underlines we've still got so much growth in our markets ahead, but it's an amazing database to talk to about our products, services. Beyond this, we have databases in push on tech, databases pushed on, sorry, push on apps, push in web. We have correspondence that we do in a variety of ways that really lift and enhance that experience. Also, it's not just about selling. It's about winning back.
And an area that we've really gone back and played in and said, "How can we enhance?" is how do we start trying to capture the customers that are leaving? And we all know win-back campaigns, but we're working on how do we make these smarter? How do we actually reach out to those consumers that are on that list, look at their purchase history, anticipate their churn, and reach them? And reach them early in the piece rather than trying to chase them post-action. So there's a lot of work going here from rudimentary moving into machine learning that we're working on and testing. It's how do we actually get to customers before that drop-off point?
I think a lot of the time, it's really great to go, "Okay, we've lost X amount of customers," or, "We've lost this customer." We've got to get that customer when they're about to lose us, when we're about to lose them, when that relationship's broken. Get them before that is actually broken. It's much easier to make up before you've had the divorce. So let's try to do that with our customers, rather than leave it to the last minute and try to get them after they've sort of disconnected from us. So there's a lot of work going. And you look at 15,000K. You go, "Sorry, 15K. You say 15K per month." You start thinking, "15K per month, and we're just restarting this activity." Then you add in enhanced activity from the media mix model every month. Then you add in testing MMS over SMS.
Then you add in other enhancements, and you start getting incremental, incremental, incremental. And it's very easy to say, "Hey, we need 200 extra orders per store to really smash that park 100." And you start actually putting it on paper, and you start really starting to hit that total progressively, but you go, "Oh, it's much more achievable." So that's what we're sort of doing as well from a group perspective. How do we make what we need to achieve broken down into parts and compartmentalize rather than looking at a whole number? And then we can actually use areas of the center of expertise in the local markets in their dedicated areas. So whether it be digital media, social, on-premise, owned media, on-site, which is our website. Everyone then has a goal. Aggregators, they have a goal they can chase.
They have a directive, and then they're empowered to continue to push the envelope. And we touched on at the start of my area, and Don talked about briefly as well, and we've always discussed sort of what do aggregators mean to Domino's. So if we're going to be the Domino's sustainable delivery QSR in 2030, we have to be in this largest delivery war, food delivery, food hall, whatever you want to call it. You can't just be there. You can go to a shop, and you watch so many places on main streets or shopping centers. You can't just put a shop there. You notice they put a shop there and don't promote or don't have point of sale. What usually happens? They disappear. So when we're in these aggregators, they're really a shopping mall. People are coming to them.
They're an audience that just go, "I want dinner. I don't know what I want. I want lunch. I'm just going to go in there and pick something." So how do we stand out? How does Domino's stand out and be the most visual? How do we stand out from our product and value? These customers still want value. Yeah, you can read the news in here about the person who gets a thick shake delivered or a drink delivered for AUD 20 and so forth, but that is value to them because their needs there at the moment is they need a drink. So they're going to have a value proposition.
We have to meet their value propositions and be in there at the right value they equate to getting food or getting drink or getting a dessert or getting a beautiful cheese volcano to dip all sorts of things in over the weekend. That's what we want to be able to deliver for them, where they see the value equation and the products we have stand out across everyone else, and that helps that conversion when they start looking at our menu, and then we need to work on infrastructure, and infrastructure is sort of the areas that I can go down in a nerdy way, but that's really our connectivity to these aggregators. How do we connect to them in the most seamless way that makes whether it be order failures, accepting of orders, allowing more flexibility with promotions or addresses or opening hours and so forth?
How do we connect the back end so that we make it easier for our stores and less disruptive for the customers? So when you think about aggregators, I want you to think about it, and some of you would have remembered seven, eight, 10 years ago when I or Don or even Andrew Rennie used to talk about digital and us owning sort of digital marketing and being quite prominent in search and mobile ads and so forth. All these platforms have aggregators. All these platforms have algorithms and processes that are common across the world. So for DPE, we need to continue to see how do we become the best at understanding those. How do we become the best at knowing, "Okay, what is the best promotion?" And something like that, AUD 35. You might say there's a promotion in there, free chicken bites.
But we're looking at what our average tickets are. We're looking at what's happening that week and how do we enhance and stand out and give something back to the consumer, but also get a lift in a benefit to our stores? But then also, how do we know what the partners want? How do we work with aggregators and say, "Well, how can we be part of a promotion?" Not talking outside their world, but with a push notification you can see there with a message that's coming from Uber about Domino's because we're giving them something that they can give their customers that have a need state to get food, and they work on that partnership. And then how are we present in menus? So wings. Domino's sells wings. So if you're going wings, how are we present in wings? How are we present in pizza?
How do we then work with the algorithms of ratings and time of delivery and everything else that goes behind it to be as high as possible? Because if you've got a need state and you want to eat, are you going to scroll through 20 different wings options? You're probably going to look at the first page and majority of you are going to go, "What's the best option there?" Maybe look at a menu or two. That's where our product and value comes in, and hopefully, that's where we stand out and own that space. And as I said, that is transferable, just like the online advertising. A lot of partners that we work with now are global. So how do we transfer that? How do we take these learnings we have and apply them? And you can see here, it's not just Uber as well.
You probably saw it at the start. If you noticed, it was delivery that we used, third-party aggregators. You can see here, there's a company called Demae-can. There is Uber Eats in Japan. There's other companies over in Europe as well. But how do we play there? They're all going to have slightly different ways of doing their algorithms, but there's learnings that we can apply that are collective across the groups, and then there's unique ones that we tweak too. And then it's also driving how do we drive additional value out of these? And when you've got areas or times of day where we have service restrictions or aren't open, where on particular days, we're looking at, can we utilize some third-party delivery? We've talked about this before.
I think we shared it at half year, but how can we either still not compromise our product and make sure it gets the customers right? But are there times when we have been closed or where we haven't been able to open as long as we like because of certain restrictions? Can we utilize some third-party delivery options as well in the story? But there's a lot left in the aggregator space that we continue, and we will, I have no doubt, continue to drive a winning approach in that space. And then to close out, I just want to reference back and sort of look back at this global approach to technology. So it's not about just shared learnings across aggregators, shared learnings across media optimizing, also as a marketing, trying to get the best IPD, best product that's inspired products out.
If you don't have a shared platform, it's very hard. I just could not imagine now trying to release a service or solution. We have priority ordering, which we released around a year ago, which allows people to pay for faster ordering and go to the top of the queue for pickup and delivery. Trying to build that in 12, 11 different, at that time, 11 markets were on it, and now we've got Singapore, 12 different markets trying to build that solution for if they all had individual solutions. The cost, the time, the effort to refine. And what is also great is everyone's on the same platform. We can watch the consumer from start to finish on an order. We can use and benchmark where the pressure points are for each market in regards to conversion. And then we can drill down, and we can show a benchmark.
You never know if you're the best of a poor bunch. So we can actually benchmark all our markets online digital to who's converting the best at each stage of a process. And conversion is the customer seeing a page or visiting to actually completing an order. So we've got this lot of data. And when you have a lot of data, we're enhancing the visibility of it. And sometimes I regret that because that usually means more emails from Don, Josh, and Andre to myself and my team. But that's also a positive because it means the data is actually connecting, and the CMOs are seeing it. And I just finished a session with Allan on the phone before. We've created a whole new insight into an area that he's wanted to see within the business before. And what's great is now we can roll that insight.
Don's already emailed it, I think, within about 10 seconds of Allan sending it to him to all the leaders. And that means by Monday, the leaders in all those markets can have incredible insights they haven't had before just through some work we've done in Australia because we're all on the same platform. And then what does that mean? Well, we've talked about Germany in the past and the enhancements we had when we put OneDigital in and took that market over. We just wanted to share we moved Singapore across not that long ago and then looked at once Singapore's got the system in, they've got a handle of the tools. What have we seen in Singapore? As you can see, Singapore, over the first three months of 2023 versus 2024, we've seen a 17% increase in SSS. We've seen a 17% SSS growth.
Now, that's not all down to OneDigital. I'd love to say it is, and I'd love to say it's all down to marketing. It's a combination of everything Domino's brings to a market, but it's when all our systems hum, when they're starting to understand its wide product, when they're getting their service levels stronger, when they're looking at how they utilize OneDigital to connect with the customer, when they're looking at their marketing mix. The whole package of what DPE brings to a market comes together, and I think I've no doubt Singapore is a perfect example of what's possible there. Now, it's our challenge. How do we take that over to Malaysia? How do we take that on to Taiwan next and see if we can replicate some of the past successes we've had in this space?
And on that note, I'm going to pass over to David to talk about people. So thank you.
Thanks, Michael. I'm going to be talking about our people. And Don previously mentioned that we are trying to bring our pizza closer to our customers. So at the moment, we have about 120,000 employees across our regions. So I'm really excited to be leading the people team. We've actually brought all the people resources under one leader, myself, over the last six months. And what that's meant is that I can start to focus our attention across the four areas that we call our pillars. We've mapped out to 2030 what our key focus areas are going to be to make sure that we can deliver on the promise of being the dominant sustainable delivery QSR in every market by 2030.
So for us, what's really important is that we have the right attraction and retention strategies because when I talk a bit later, what you'll see is that in our organization, like many other QSRs, the turnover rates are quite high. So how do we keep our people engaged in the business? How do we make sure that they stay? Because the key thing with Domino's is that there is a path from being a delivery driver or an in-store all the way to a manager, a franchisee, or franchise partner, and then to becoming even a CEO in this business. And we've proven that time and time again. That's very different to a lot of other businesses that we have.
So when we look at how we actually can manage that 120,000 employees, and that is going to grow by about 48,000 employees by 2030, we need to make sure that we've got the right systems and processes, that we've got the right technology to keep people engaged in that. David Brandon, Executive Chairman of Domino's, said that the number one predictor of the success of a Domino's store is the competency and tenure of the store manager. So how do we keep our store managers in our business longer? When you look at the pipeline that we have, and we spoke briefly about the path to being a CEO or even a franchise partner, but if you look at the path that a team member has in the business from being a new starter, we have a very high turnover in the first 30 days.
So how do we stop that? We need to have the right talent acquisition process. We have staff team members that actually get stuck because the managers haven't moved on that don't have the right capability. So how do we make sure that we've got the right approach to managing the managers go through the process? As somebody who's been a store manager, sometimes we promote them too soon. It's one of those things in a business. You've got somebody in store, the manager leaves. Suddenly, we're just promoting somebody that doesn't have the right capability. So our job is to make sure in the people team that we've got the right approach to training to stop some of this from happening. How do we keep that engagement level going? In some of our markets, there's up to 100% turnover of our team members per annum.
That's a pretty regular figure that you'll see across QSR. One of our goals is to make sure that we have the lowest turnover of any QSR business by at least 2027. The way we can do that is to start to look at how we actually keep engaged with our employees, how we make sure that we train and develop them. When you look at our 2030 vision, you need to look at the fact that we're going to have to employ something like 48,000 employees at store level. That equates to about 23,000 store managers, 7,000 managers in the business, and a huge number of franchisees. Now, we talked about moving from five store franchisees to ten.
Clearly, the key here is to make sure that we've got the right franchisees in the business and that we're able to make sure that we develop people along the way because we don't go outside and bring franchisors outside the business. We grow them from within. So how do we actually do that? The people team looked at what Japan was doing about three years ago. They had an incredible program called Mammoth that showed a real correlation between the sort of training that was being done in store and the product quality, the year-on-year sales targets. What you can see from this graph is that the top quartile stores had product quality that was much higher than our middle and lower. They had EDT that was much better.
They had NPS scores that were much higher, and they had year-on-year sales growth that was much higher than the rest. The differentiating factor between our top and bottom stores was the amount of training that was being undertaken, so it was really clear to us that we couldn't replicate Mammoth across the business, so we needed to develop our own product, which we call Path to Excellence, and that's what I'm going to talk about over the next course, so coming into probably the last three years, we've been focused very heavily on developing what we call our Path to Excellence. During our lunch, I'm going to actually demonstrate it, so I'd be happy to take you and show you what the path looks like. It's a really exciting tool to keep our employees engaged.
We developed this tool looking at the competency framework that was both in Japan but globally. We looked at the learning plans that were around the business, and we spoke to a lot of delivery experts and team members to make sure that we were developing something that would be exciting and intuitive. And what you'll see, hopefully, at lunchtime when I demonstrate this, is that it's a really exciting gamified system. This is something that engages employees. It's not something that is just standard LMS. And I think that's really key and important when you're looking at how we can keep our engagement levels of our team members going. This also leads into our leadership competency framework. So what the path does is it actually allows us to have a roadmap from being your very first day in Domino's to actually being a multi-unit franchise partner.
So this isn't just taking somebody from being a starter to a manager. It actually takes us through the whole journey of being a DPE employee and then becoming a franchisor. We have these curated learning plans that are consistent across the globe but customizable to local environments. So rather than having a Domino's team member in the Netherlands having a different training process to a Domino's employee in Australia, they have a consistent process from start to finish. The only customization is around local compliance issues or if they're launching products that are very unique to their environment. And what we can see is this direct correlation. We saw it in our Australian corporate stores a couple of weeks ago in Victoria, where our top-performing corporate stores from an EBIT perspective had the highest training participation rates.
About 80% of people trained in all of the products that they needed to be trained in, as well as across the general training population. I think what's really exciting about what we're doing, though, is not just the learning management system. An LMS, any company can have an LMS. What we're doing that's really unique is actually tying this to data. So we've worked with our BI team to make sure that the information that we're able to gather from our LMS ties into the performance of business. So we can see this correlation happening on a daily basis. You can see when product quality scores are going up, it is exactly related to the amount of training that's being conducted. So at this stage, we've rolled out our Path to Excellence across five countries: so Australia, New Zealand, Japan, Netherlands, and Germany.
We've got 66,000 team members on the system. We have 320,000 training activities already conducted, and we've got 13,500 active users per day. We'll be expanding that to all of our countries over the next two years. We've got a roadmap that takes us out so that we can keep our employees engaged. I guess I want to focus on the path from being a manager to a franchise partner. That's really critical because I don't think this is something that many other organizations do. We've developed training materials that allow us to see how you can move from being a store manager all the way to being a franchise partner. And what we do is we actually bring potential franchise partners together. What we've been able to see in the last 24 months is we've had 70 franchise partners born out of these programs. So that's a huge number.
You want to be able to see that what you're doing from a people perspective in growing and developing our team members actually leads to being many more franchise partners in the business. So in order for us to be the dominant sustainable delivery QSR in every market, we've had a real focus on how we keep all of our employees engaged, not just by focusing on things like our turnover rates, ensuring that our engagement levels are higher, but we're building a world-class learning system that will allow us to actually see and track how we're going. Thanks so much.
Hello, everyone. My name is John Harney. I am the Chief Partnerships Officer for Domino's Pizza Enterprises. I'm coming to you today from sunny Netherlands. Sorry, I can't be with you. I just wanted to give you a bit of an overview or a bit of background on the areas we're working on in terms of ESG and supply, both of which come under my purview. To begin with, in ESG, just to reinforce that from the board all the way through our organization, we're incredibly committed to achieving our ESG targets, and to put that in perspective, the average age of our workforce is 19 or 20 years of age, and for that cohort, they expect nothing less than to work for an organization that is incredibly active in this space. So what have we been doing?
To begin with, we've been spending the last two, probably more years, under the amazing stewardship of our ESG manager, Marika, who just recently left us, unfortunately. So we're in the throes of replacing her, but she has set us up with an amazing foundation with which to move this forward. So we've been approved and registered with our science-based targets, including what they call FLAG, which is Forest, Land, and Agriculture as well. So things like deforestation, regenerative agriculture, water usage, etc. We're actually one of only 10 companies worldwide to have our SBTi targets with FLAG approved. So an incredible effort by Marika and the team. But that's a lot, as is our commitments to 2030, a 65% reduction in our carbon intensity by 2030, which is an incredibly stretching target, and net zero by 2050, like most of our peers. So these are stretching targets.
Let me be very clear. It's quite the challenge. When you look at a business like ours, so we're obviously a multi-unit franchise business across 12 different geographies. Actually, 96% of our carbon, so just looking at climate, 96% of our carbon is actually Scope 3. Scope 3 means it's by everyone supplying into us. Actually, the activities of our stores and our people are quite low because we haven't got a massive manufacturing base or value-add base within the organization. It's all coming in upstream of us. 96% of our carbon footprint, which is 1.5 million tons as calculated in FY 2023, is Scope 3. Of that 96%, 80% of it is our food. Again, the realization there is when we say our food, we all immediately think of the factories and the trucks, etc., which, believe me, have an impact.
But the absolute massive impact is things like a dairy cow. So the methane output of a dairy cow represents 20-plus% of our 80%. So our food supply chain is an incredible impact on both our carbon and an impact on the planet. So what are we doing about that? So first of all, we've worked with our dairy partners, obviously. Such a huge single impact. We've created what we call the Domino's Dairy Initiative, and that is setting objectives around that dairy area. So working with our largest global supplier, which is Leprino Foods, we've created guidelines and frameworks with which to drive carbon out of that dairy supply chain. And like all of the carbon reduction strategies that we have at the moment, data is key to making that happen. It's hard to know where you're going to go if you don't know where you are today.
The first step in that process has been creating a Double Materiality Assessment, a DMA, a fancy word for basically setting up 30 objectives on which we intend to focus on for the coming years. This is a body of work that's only just been completed. Then that allows us to meet the reporting criteria of both the EU and the AU, the Australian Climate Initiative that's starting in July of this year, and the European Initiative, which is starting in 2025. These are significant legislative requirements placed on the business. The materiality assessment sets the objectives on which we have to go after, and then we have to start measuring and reporting against those objectives. It's something like 900 points, of which probably 30% are data points, and then 70% are what we call narrative, us explaining what we're doing on our journey.
So a significant body of work there to meet those legislative requirements as they stand today, and they are changing quickly, and countries are signing up for this. California just signed up recently. Not that it's one of our geographies, but certainly shows that the world is starting to get compliant with this legislation. So how are we going to meet that? We've broken the business up or the ESG objectives up into three very core areas of our business. It's how do we build sustainable stores and operations? That's silo one. How do we do responsible sourcing? So bringing all that food and supply into our business in a sustainable way. And finally, how do we innovate our product and our menu sustainably so we drive the future of our menu in a sustainable way?
So, stores, obvious things like how much energy we use in our stores, the waste we create in our stores, driving e-delivery. So, those bicycles and those scooters, electric scooters in Taiwan, e-bicycles all over Europe and more and more so in Australia. And of course, how do we design a store to be just a lower carbon footprint? It could be as simple as putting hot water collection in the vents off our ovens and start heating the water rather than using electricity. And simple things like that all the way through to, are there better ovens and cooking equipment out there?
Responsible sourcing, as it says, it's getting better at bringing all that food into our organization and lowering that carbon footprint and looking for alternatives, be it plant-based, be it fermented or cultured meats, like growing something in a bioreactor, to regenerative ag that lowers the carbon footprint of a farm, increases nitrogen sequestration, all those things that you've probably all heard and read about. And then, of course, it's driving our menu. How do we make sure all future products are more sustainable than the ones they're replacing? So they're the three key sort of areas that we're focused on. To resource that, of course, and drive that, we're replacing our head of ESG. So that's a search that's happening right now. We're very close to finalizing.
Resourcing under that, we have a dedicated team of three people globally working on ESG with the head of ESG. We have various people across the organization driving those initiatives through stores, through sourcing, through menu development. It's a very motivated team across the group. We're supporting them with software. We've bought ImpactBuying, which is a traceability software. That's key in being able to track all the way back to source where the products we buy actually come from. Sometimes you think it's obvious if we buy milk from California, it's milk from California, but you have to look at what additives, what other ingredients go into producing our product. It could be the grain that the animal is fed. Where does that come from? Where does the soy come from? Is it a deforestation source?
It's an incredibly complex web, which we are trying to get our hands or our minds on. We're overlaying that with some ESG reporting software we're currently sourcing at the moment to help us meet those European and Australian legislative requirements, which are effectively almost financial reporting standards. Finally, as a business, we're looking at an enterprise resource system, an ERP, to sit across all 12 geographies of our business. This is everything from HR. Getting all that diversity data and people data into one central location is key to us being able to then make change and drive benefits through our organization, as well as centralizing a finance system and centralizing our supply and inventory control systems. Three pieces of software that are key to driving the ESG agenda.
And then I guess to wrap all that up, sorry, this is a pretty quick summary, but what's next in FY25? So having all of that foundational work put in place, it's a case of then saying, "Let's do our responsible sourcing policies, get them all set up, squared away, and on our microsite. Let's start to meet those Australian and European reporting requirements." With the software we're now getting hold of, raise the bar on our modern slavery reporting in Australia. It's coming in other markets, but it's currently only Australia. So we're going to get better at that traceability all the way back and be able to report better on modern slavery. We're going to design and get accredited a green store.
All these ideas on what we're putting into a green store. We want to build that store and have it accredited by a third-party international accreditation service. We're starting to build female-centric leadership training programs to bring that diversity levels up through the organization. We're expanding our back-of-house dough, which drives enormous logistic savings, but also environmental savings. I'll comment on that more in a moment. We're driving low-emission delivery vehicles, both from our warehouses into our stores. We have two electric vehicles in the Netherlands, two fully electric semi-trailers from Volvo. Electric tractor, if you like, the prime mover, and an electric trailer, all the refrigeration's electric. Totally silent, already operating for the last eight months in the Netherlands. We're also driving lower-emission vehicles on our delivery to you as a consumer.
And then I'll move on to now I'd like to discuss our supply area. So I just wanted to add to that ESG story, a little overview on our supply, our supply chain, our value chain, how we actually move products around these 12 markets. So as I've been saying, we operate across 12 very different geographies, from Australia and New Zealand to North Asia, all the way to Europe and obviously Southeast Asia as well. That's a total of, as of today, 3,844 stores across 12 markets, serviced by 36 separate warehouses across all those markets. So what that equates to is every three minutes, there is a delivery truck backing up to one of our stores somewhere on the planet. Every three minutes, it's delivering food, it's delivering fresh vegetables, beverages, packaging.
It's a significant supply chain, and we're sourcing from pretty much all over the world, both domestic in the markets in which we operate, as well as some imported goods where necessary. Probably the biggest thing we've done to or the biggest first step we've made in removing carbon from that supply chain has been the implementation of what we call back-of-house dough. For those of you who don't know, a traditional Domino's model of 20-plus years ago was a central factory in, if I use Australia, say, in Sydney, producing dough, fresh dough, and then transporting that fresh dough to the store. It doesn't take a rocket scientist. Dough is 35% water. Dough, by its nature, you put a dough ball in a tray, you've got to give it some space because dough is a living, breathing entity.
It grows in transit, so you have to give it space. So it takes up a lot of cubic capacity in a vehicle, and you're transporting 30% of it, which is water. So it's a simple change. What we did was we moved our stores to have a smaller mixer in the back of the store, back-of-house, back-of-store. And we simply make the dough every day in the store. We use store labor, usually excess or dead labor. It only takes 15 minutes to make a batch of 20-odd kilos. We're saving all that transportation cost of bringing water into the store. We're saving all that transportation cost of cubic efficiency because now it comes as a bag of flour, which is a very dense and tightly packed product.
So on average, we see a 20% reduction in our logistics, which is a straight-up 20% reduction in the carbon footprint of our logistics. We've rolled back-of-house, as we call it, into all markets, all the new markets we've bought in the last few years. Taiwan is 100% converted, Malaysia, Singapore, Cambodia, 100% converted, Japan, 100% converted. Australia, New Zealand was already back-of-house. Germany, when we bought it, already back-of-house. We are only running centralized dough at the moment in France and Benelux. We have just started testing back-of-house very early days in the French market for the very south of France, which is a long way from Paris. As I mentioned, the other thing we're looking at is zero-emission vehicles or low-emission vehicles, two electric trucks in the Netherlands and more to come, both from our own fleets.
We're also working with our third-party partners to drive zero-emission fleets there. In European cities, by 2030, you're just simply not allowed to enter Amsterdam with a diesel truck, period. The industry just has to comply. That's seen an absolute explosion in technology and hydrogen and EVs to solve that problem. Finally, in the supply side, as part of our review last year, Project Foundation, we're moving to centralized procurement. 12 markets over the years, 12 sort of teams running purchasing and supply across the group. We're starting to bring all that into a central procurement function and drive synergies and savings that way. Early days, we're still in the process of embedding that in, but we'll have a significant and positive impact on our business.
So in summary, it's a complicated supply chain, as I say, over 3,800 stores supplied by 36 warehouses, delivery every three minutes, sourcing from all over the planet, delivering to 12 locations or 12 countries. It's complicated, and it's a significant part of our ESG initiatives as well. So we're happy with how it runs today, but we're looking forward to making it even more sustainable in the future. Appreciate your time today, and thank you very much.
Hello, everybody. My name is Martin Steenks, CEO, Domino's Japan. I'm recording this message for all of you from Japan. Let me run you through today to the status of the Japan business, the initiatives we are taking, and the opportunities we are seeing towards the future.
Before we start, I would like to give you a little bit of insight of my executive team, the team I work on a daily basis with to actually achieve those initiatives. As you can see, the amount of experience in my team is quite high, with more than 100 years of experience in the team together. We are forming a balanced team with Kikuchi-san and Sasaki-san, more than 35 years of experience. We have Brett Moore from Australia with more than 29 years of experience within the Domino's business, myself, 26 years, and mix that together with excellent leadership from our finance team and partnership team. As you also can see, at this point, we don't have a CMO in this market. Luckily, we have huge support from the centers of expertise in Australia, but also from our global CMO, who is now acting CMO for Japan.
So he is now only focusing on this market until we have onboarded a new CMO for this team. I can tell you now that we are at the final stages of that hiring process. So hopefully, within the next weeks or months, we can introduce that person to this market. And until then, Jeff Garton, our global CMO, will be here as acting CMO in Japan. So at this moment, from today, we have 1,015 stores, and we were very pleased to open our 1,000th store only a few months ago, October 10th of 2023. And that was actually a long journey towards five years ago. But the good thing is, if you look at our strategy from where we were five years ago and you look at our strategy right now, not that much has been changed, actually.
We sometimes have some misunderstanding about, well, everything changed during COVID or everything changed after COVID. No, no. We still have the same strategy for this market as we had when we had the 100% ownership in 2017. And that is actually a good thing and also a consistent thing, which is clear for the business where we want to be. So how we build this business is something I would like to show you for the upcoming months because this business is not in Australia. It's not simply copy-paste from Australia or the Netherlands where I come from. It's a Japan approach. And the Japan approach is going after occasions and breaking down the barriers of these individual occasions. I'm going to talk you through these occasions and what they are, but the general approach of the whole strategy hasn't changed since 2017.
We talked about this during our half year where we talked about our four pillars or four approaches, where we talked about inspired new products. We launched Cheese Volcano with the start of January. We launched Cheese and Twist in mid-March, which already gives us some good results. We launched or we started with a lower entry point, a sub-JPY 1,000 yen entry point mid-February because we saw in all our research after that huge price inflation that if we have an entry point above JPY 1,000, we are losing the most of our customers. We launched in February a pricing point of JPY 790. That had some mixed results. We are tweaking that now into a better outcome, but also a wider adoption of proven promotion. Last year, we had some really good launches of field pizza.
So we are bringing those pizzas back on our menu for short-term promotions because those are proven to be right for this market. And I think the fourth approach here is winning in inside aggregators. We see some really strong results at this moment on Uber and Demae-can. Demae-can is our biggest aggregator platform in Japan. We see some really strong results there already, but we are only at the start there. So we see a lot of opportunities using those platforms. So we are also exploring a 3P delivery in peak moments because it's very difficult to have those staff members in that store for the peak moments. So we need a 3P delivery for that occasion. And that brings me to our franchise network. We still have a very, very big franchise network, a very strong franchise network here in Japan.
We decreased it from 133 down to 124. It's mainly because our existing franchisees are building out their total enterprise. The average enterprise right now is, on average, five stores per franchisee, which is one of the highest in DPE markets. I'm still actually very confident that with this strong base of franchisees, we have a strong core for our future growth because now these franchise stores are also breeding new franchisees. Also this year, we are entering, or a few new franchisees are entering the system from existing franchisees, which is a good signal. We started this growth roughly five years ago, as mentioned, in 2017. We looked at some changes there back then.
So we were not able to open all these stores in all these markets because we simply were not able to deliver the goods to those areas. So we said, "Okay, let's focus on three things. Let's focus on dough projects," or as we call it internally, back-of-house dough. We are harmonization of the freight cost and strategic refranchising our business. And that gave us a lot of opportunities to open stores, especially on these dough projects. As said, we were not able to open stores in those locations because we simply couldn't get the dough into those locations. And with the BOH or back-of-house, as we call it, we're now able to make the dough in the store ourselves. And that will give us a lot of flexibility and variety to open those stores in those locations. So what have we done?
So as you can see here, since April 2019 versus where we are right now, you can see a lot of white spaces, especially in the north of Japan. And we actually opened all these prefectures by prefecture in the past five years. So we were not only forecasting our existing market. We were looking for opportunities outside these areas, outside these areas of Tokyo, Osaka, Nagoya, where we were already highly penetrated. So we saw the opportunities, and we still see the opportunities outside these bigger cities. The downside is that we see that all these areas are now still immature because, as you know from the past, that our existing mature rate or our mature rate in this market is much longer, much higher than other markets. So it takes some time for those markets to develop themselves.
But with all these projects we put in place, we were not able to open those white spaces in those areas. What is important here is that the franchise business was actually delivering the majority of that growth in those markets. And the other misconception I would like to address is that, or the question I get often is, "Is pizza growing in Japan?" Well, the short answer is yes, it is, because this is only an overview of the three biggest pizza chains in this market. But yes, we grow to 1,015 stores, and the majority of that growth was during COVID. But as you can see, our biggest competitor, Pizza Hut, is also growing. Pizza-La is steady for the past seven, eight, or 10 years in their store growth. They have a different approach.
They are part of a bigger group, which has multiple restaurants there, and Pizza-La plays a small part of their group. They have a different approach of how they would like to see their store network. Pizza Hut is following the same path. They're also seeing opportunities. If you go deeper into detail, if you go deeper into those prefectures, you actually see that in a lot of these prefectures, the local brands are growing as well. Some brands have only six stores or 10 stores or 20 or 50, but they are growing their store network in those specific areas as well. We see that expansion happening there, which also is confident for us that the pizza market is growing. That's not only Domino's is expanding their business; all other pizza chains are expanding their businesses as well.
So as we are the number one pizza chain, we are not the number one in all prefectures. So in 2013, we were available in 17 prefectures, and in none of them we were the number one in the market. In 2019, it shifted. We were available in 36 prefectures, and we were the number one in 8 of them. And by today, we are available in 47 prefectures, and we were the number one in 27 of them, which is good, but still some room for opportunity because that means that in other 20 prefectures, we are not the dominant number one. And it can be that one of the local pizza chains is the number one there, but also one of the biggest competitors can be the number one. So there's a variety of who is the number one in that market.
But there are some opportunities, and there are some opportunities if you are the number one in the market because you get more brand awareness, brand presence. You get easier on television, which is also gaining you a lot of extra growth in orders and sales. And we potentially like to close some stores at some prefectures because, to give you an insight, in a few of these prefectures, we only have between one and five stores, which is, for us at this point, very inefficient because we need to grow that store base in that specific market drastically to go on television and to grow that brand awareness. So we predominantly want to focus on these markets where we are already highly penetrated or can we expand our store base there to go on a higher tier on television.
Because during the past few years, did we make some mistakes? I think we did. The expansion of all these stores, I think, was the right thing to do. Growing the brand was also the right thing to do. But growing in all these directions was maybe not the right thing to do back then. But it still gave us the opportunity to grow the brand awareness in the whole market. But we see some opportunities there for the upcoming years. So as you can see here in this slide, it's an overview of our store network where we were in 2019 and where we are right now. The important thing is if you look at the AWOC and TV market tiers. And I would like to give you a little bit of insight of what AWOC and TV market tiers means.
It means that there is a strong correlation in AWOC growth, and AWOC stands for Annual Weekly Order Count, and being presence on television. And we have four tiers. Tier 4 means there is no television available, and Tier 3, a little bit more too. And in Tier 1, you are almost daily on television. So the presence there is much higher. And as you can see in this fabulous overview, you can see that in the markets where we were on Tier 1 television, we are also having the highest AWOC growth. But also, you can see that in 2019, we had a lot of white spaces, especially in the north and the south of this market or of Japan. And those areas, we are now available, but they are still immature.
And as told before, the mature cycle of a store in Japan is much higher than other markets. So it needs some time to build that. So we also need to build some more stores in those regions. And as Don told you guys in the past as well, if you get more stores in those regions, you get more television. If you get more television, you get more ad fund income. You get more AWOC growth, and you get more brand penetration. So it's really important for us to focus on the right market to grow and in which market not to grow. So because it's so important to grow from an average 500 order count to 600 AWOC per store per week, that's our focus point at this moment. How are we going to achieve that order growth and also growing the profitability there?
Our strategy is still delivering, and our strategy is still towards how we are going to achieve that. And how we are going to achieve that is focusing on some key points there. And it's actually in line with what we showed you a few years ago. The solo consumer is still the biggest growing consumer in this market. And with the My Domino's Box, which we launched last year in February, we have a very strong position, which we can grow still. And we are still seeing some good numbers there. We're still seeing lower double-digit week on week on the My Domino's Box. And that's a very strong message to us that we can grow that even more. So what are the right occasions? How can we unlock those right occasions? How can we unlock the lunch and the late night?
Also, how can we make sure that the My Domino's Box is growing towards dinner time? The pricing strategy, as discussed, we had a lower entry point, stopped at 1,000 JPY, which we launched a few weeks ago, so we keep building on those initiatives. Also, what can we do with late afternoon? What can we do with child-friendly weekday? All these occasions are important for us. But speedy lunch pickup as well, so we are testing at this moment grab and go, which means a customer comes in, has a few options to choose, and can grab his product and can go straight away, which also gives the customer the opportunity to leave the store immediately.
The other thing we are focusing on is we are now filling up the marketing calendar, as said, with proven promotions, setting the barbell strategy right there, and make sure that with that lower entry point, the seasonality on one end and the right promotion with inspired products to be delivered. That's really important for us at this moment. And growing on the aggregator platform as well. So we are continuing to implement the long-term strategy we outlined on acquiring the business, which is delivering results. We acknowledge we have had some short-term issues, which we need to work through, and we believe we have the plan to do so. So our near-term focus is identifying or working on the challenges we already identified, which is rapid expansion during COVID has resulted in a larger widening of immature stores.
The breadth of our expansion resulted in some of these immature stores operating in under-penetrated markets. Improved unit economics, corporate and franchised, relies on higher average weekly order count. AWOC should grow from 500 average to 600 average per week. Higher AWOC requires a small increase in frequency through new occasions and primarily reaching infrequent customers with successful promotional offerings. Sales-building initiatives are in an environment of lower available media spend per store. So what are actually the actions to overcome these challenges? So working with franchise partners to accelerate store maturity and profitability. Review and test prefectures with sub-optimal AWOC to determine whether stores require an improved store execution of local marketing. Additional DPJ marketing spend to support growth for the entire prefecture. In a smaller number of cases, we need to have the consideration of ongoing viability of the store.
As a promotion-driven market, a detailed and ongoing inspired product pipeline is essential. Under the leadership of a new Chief Marketing Officer, or who we are going to appoint shortly, we are going to achieve that. And additional incremental frequency will be gained through building occasions through products such as the My Domino's Box. Where do we see our future outlook? This is still where we see our market can be in the upcoming years. It actually means doubling the system. And we have to build out this opportunity. There will be some fits and starts, but we are building in, as said, we are building in maturity. We make sure that our franchise partners have the right support to grow into that maturity and to get them to the level of the order count we want to be for at least 600 orders per store per week.
That's actually our focus point at this moment right now. The long-term opportunity, as said, is in front of us. The long-term vision is clear. We have some work to do to build maturity in all these markets. With that said, I hope this presentation has given you a little bit of better insight of what the current status is of the Japan market, what the opportunities are, and what we are going to unlock in the upcoming weeks, months, and years. Thank you very much. And if there are any questions, I will be available.
Thanks very much. Thanks for the presentation.
Given the amount of upside in Japan compared to other markets, and you take that into account with the balance sheet constraints you have at the moment, are you not better off exiting capital-heavy markets such as Malaysia and investing that capital into Japan to scale up some of these less mature prefectures?
Yeah, it's an interesting thing with Malaysia. And so the question is whether we should be exiting, well, what could be interpreted as capital-heavy markets. Actually, they're not capital-heavy in the sense that Malaysia and maybe Singapore. We haven't made a decision on Singapore. We haven't started the franchising program until this quarter. So actually, as we sit today, we'll be franchising before we open stores in Malaysia because, obviously, Malaysia's got the external influence right now.
But when we look at our balance sheet, there is pent-up capital sitting there to release stores still out of Japan, out of Malaysia, Singapore, Europe, Australia, New Zealand, and even in Taiwan. So when we're in this phase, actually, one of the reasons that we're still showing quite confident is that we're not opening as many stores, and yet we still will be selling stores. And you'll see that in the corporate store numbers out of Australia. So one of the ways that, if you recall that I tried to explain it at the full year and half year, is that when you see how these businesses work, is that, obviously, it always starts with the customer. Everything starts there. If we delight the customer and get the right margins, that flows into our franchise partners.
If our franchise partners have had a period of stress, then there will be still a gap moment where we'll be improving the balance sheet, paying down any bad debt, super, taxes, all those sort of things, and then the next lot of demand, normally, it goes to immediately the store access, so whether somebody says, "Look, DMP's interest is premium interest because we're not wanting to be the bank in the long term, so I may go to a bank and refinance my existing network," or I may look to the corporate store network as an availability because that's a site I can see today, and I might be opportunistic, and then the final leg of growth is then store growth, so that's typically the order.
And you'll watch that happen when you see the numbers in Australia, and you'll see we don't break out Germany, but that will be reflected from Germany. But as a micro Petri dish, you'll see that flow in that order from Australia. And our margins work that way too. The first recovery starts with the customer to the franchise partner. And as you saw in the last half, for all of that growth, not as much comes to us, but then you start to see it in the next window as in that's paid back. We start reducing any support. The business is growing. Our incomes flow through, and so on. So yeah, I hope that answers your question that there's no intention because we don't really see Malaysia as capital-heavy.
Just on Japan, I'm just trying to work out, is today a bit of a major culprit that you've rolled out too quickly? Is there anything because it feels that today's sort of ignoring that you've seen reduction in franchisees, you've got to get the average orders up. I think you mentioned on the presentation that you cut the, obviously, you put pricing down to 7.90 if you hadn't seen the frequency lift. But the strategy feels very consistent. That's good to say, not say the strategy changed, but does it need to change? You need to support the business more. You need to put more pricing. I'm just trying to understand the significance of what you're saying today. Are you saying there's been no change, or are you saying you've got to rethink and recalibrate?
So just checking, Josh and Martin, did you hear that question from Ben?
Yes, I did. And I think I can answer the question quickly without doing everybody. I think it's very healthy to look at your strategy during the year and say, "Okay, as I mentioned in my presentation, I said, okay, the JPY 790 or JPY 750 range, we are just introducing. It's only live for a few weeks now." So it's hard to really make a decision there based on if you are on the right or the wrong track.
But that's aligned with what we should do, also because we saw the biggest drop of our customers in that first two ranges. And we saw that JPY 1,000 pricing tipping point was actually the tipping point of customers dropping out. So I think we made the right decision there. And the first part of your question, if I remember correctly, was about if we opened stores too aggressively. Is that correct?
That's correct.
Yeah. So also in my presentation, I talked about a few stores we are currently reviewing, saying, "Okay, are these stores necessary? Do we need to put some extra marketing against there to increase sales? Is it maybe because of bad operations in the area that we need to improve the operations of the store to increase sales? Or do we need potentially to close that store, as I said earlier in my update?"
Josh, anything you want to add to that? I can close that out.
I think it's just where you want to pick your point. I mean, we opened rapidly. We saw opportunities to do so. We've got to build out prefectures, get to what we would view as critical mass in each one of those. We'll optimize the network where we can. It's hard to sort of 2020 hindsight.
We probably would have concentrated on fewer prefectures, but we're there now, and now we need to sort of continue with our strategy. And that was really what Martin was saying, is that it hasn't changed too much from when we started. We're going to keep going on that track and keep pushing through. That's really where we are.
Yeah. So one of the things that we think about is that, obviously, there's a number of stores now that are immature in the cycle, right? And then predominantly in these new prefectures, as the chart showed. So the question you ask yourself is that, what is the timeframe to get further up that curve in the maturity?
If it was going to be too long, because if you saw on an outline, it was a prefecture that it seemed so distant away, that could even be considered that it could be a close. But you're talking about us talking about a relatively small number on the scale of our business. Because in other cases, we say, "We've already sunk the capital there now, and if the bridge is one, two, or three years, what might we do either to support or just hang in there and go through that cycle?" So yes, as Josh said, in 2020 hindsight, you probably would have entered less prefectures in that growth phase. But now we are in some of those prefectures. Are we going to keep infilling over the next two or three years as we see the recovery, as stores cycle up the maturity curve?
Or is it just too long, so it's just about letting the business grow before you don't need to suddenly put a whole bunch of dollars in if it's going to rain back down. No, but in saying that, sometimes, is it better to give the market support financially, or is it better to inflate the NAF? In other words, spend the marketing dollars, and that's a question that, for various different reasons, is a bit dynamic, and so yeah, we look at both case studies, and we're also partnered with DPZ. And they also see Japan as one of the biggest markets in the world of the future, so they're also sitting with us and doing the same analysis to support us. Because they would, we're a high-performing franchise partner. Japan's a high performer in recent years and long term.
And so together, we're both doing this analysis and checking each other to say, "Well, what is the right thing to do here in these decision-makings?" But it's not like it's. We're not talking about a significant number of stores here. You're talking about a smaller number of stores that would ever go to the most extreme where we'd say, five, seven years, is that too long for capital? Or is it really one to three years and let's put money behind it or support the franchise partner?"
Oh, mine follows on, so it probably makes sense anyway. We don't really get the numbers, but it looks like your average weekly sales in Japan is maybe 5% below pre-COVID if we look at the whole country.
Can you talk about what that metric would look like if we look at the mature prefectures so we can kind of isolate the impact of the immature stores in the immature under-penetrated prefectures?
Yeah. So I'll start on that, and then Martin, you can add, or Josh, you can add to that. But the mature prefectures are predominantly Tokyo and Nagoya, Osaka. That's what the business was for most of its life. But in those markets, you've also got a higher cost structure. So historically, you've got a higher rent. You've got higher related controllable costs that go with that because they are the big cities of Japan.
Just like in most of our markets, Paris, Amsterdam, Berlin versus if you go Tamworth or Brisbane versus Sydney and Melbourne, there are different cost structures that relate to that, including in some cases, even in some markets, labor is also different rates by different markets around the world, so a store in a regional or smaller town potentially has a lower break-even as well than a just the one input alone of rent would and especially even in Tokyo, it's so big, 20 million people. As you get down more, really downtown urban, the rents even go up even more, and you find out locations get smaller and smaller per square meter as well, and that dynamic plays out here too, so looking at those mature markets, they're mature in more expensive markets. We're immature in typically, on average, a lower-cost market, so the differential is not the same.
They're not apples to apples. So we've diluted even our AWOC numbers by opening into markets where immature, but we'll get to break-even a lot faster than if they were just downtown Tokyo, Nagoya, Osaka.
Sorry.
Yeah, that's helpful. Can you compare the mature prefecture AWOC with what it was before COVID, just so we can get a sense of how far off that people are now?
Yeah, Martin, maybe you can just give some generic commentary there. Not a market update.
If you look at my presentation, prior to COVID or pre-COVID, we were not available in more than 36 prefectures. So the immaturity is in these prefectures we opened in the past few years. So Hokkaido, for example, we didn't have any stores in that region before 2018 or 2019.
It's that mature cycle we need to build out in those areas. We see a lot of opportunity actually in those areas because, as Don mentioned, we got a lot quicker to bring people into those areas, not only due to rent, but also due if you look at the percentage pickup and delivery. That's a big shift from these bigger cities to these more urban areas.
Higher carryout in the country.
Yeah. Yeah.
They're not all the same too. Part of what Martin's presentation said is that there's also different competitors.
So there may be a long-entrenched mature competitor that's just regional, only exists in those prefectures, and we are the new player in those prefectures, versus we may go in and it's been a weak competitor or no real competition, and we've actually done better straight off the bat because we've become a national player immediately and shown that through. Josh, anything else to close that question out?
No, I think it's something else. But mature prefectures, I'm also looking at mature stores, and we've carved out even that big prefectures. So I'm not sure what currency you're looking at, but we're pretty close. We've got we don't need 200 stores per prefecture to be a great business, as Martin sort of said. We're very close. So yeah, we're just getting on with our strategy here.
And it's a really important comparison because I notice sometimes an analyst will compare a DPE business to a DPG or DPZ. We're now quite heavily weighted in Asia, and the Asian markets have a much lower order count break-even because they're designed with lower frequency. So typically, globally, 1,000 orders was the dream. Domino's would say, "Go to a market, get to 1,000 orders, you're going to have a successful business." But in parts of Europe and Asia, the dreams could be 600 orders or 650 orders. And we may have bought a business doing 400 orders, 350 orders in Taiwan's case. And actually, Taiwan was making a little bit of money at 350 orders.
Some of these comparisons are not apples with apples because lower-frequency markets have built in different cost structures and different price points to their menus and actually thrive at lower order counts than other westernized markets.
Maybe a question for Michael. In terms of our sort of next-level or more dynamic marketing strategy, if we look at globally, a lot of our competitors or peers in the industry are really trying to amass much more first-party data from different channels and then trying to do a little bit more targeted or personalized to up the conversions. And often, it's hand in hand with potentially an app strategy or a loyalty strategy because that's private domain. We didn't really talk much about the app strategy or the loyalty strategy. Where are we sitting in that? I know that at points we tried to really build out.
Yeah, definitely.
I think if you think of loyalty, don't think of loyalty per se as a loyalty program because we've got to think about loyalty as retention of consumer. When you talk about retention of consumer, it's about how do we continue to both increase frequencies. I'm trying to get the team to think about buckets. You've got your new bucket, new consumers. You've got your low, medium, and high frequency. How do we continuously look at what takes a new customer into a low? Because new customers just don't jump to a high frequency overnight. What takes a low to a medium and a medium to a high? How do we segment our communication, not just based on that, but then what are the little tweaks we need to do?
Could that be as subtle as I'm a delivery customer personally, but I might get pickups sometimes. And we had some markets go too far down the track of, "I just want to receive delivery." They're a delivery customer. I'm just going to tell them delivery. But there are times when they want to do an alternative. So coaching the teams, do we look at a delivery as the headline price? But you still have a subtle pickup price. So there's still an alternative option for that customer. So you've got the pricing that can be targeted based on the outcomes. And then we've got the experience. So going down to something we're looking at and tested is in your basket. We've got 80% of our sales digitally. We're even rolling out.
We were laggards in kiosks, but we weren't where we were early players, and we got so many customers into the digital space before competitors. That kiosk sort of were a secondary item for us, and we're rolling that out. So a lot of our learnings we're talking about now, even down to personalization, can also be basket-based, not just knowing the consumer from pre-purchases. How do we actually target consumers that are new that we don't have history on, but we're looking at their basket through that 5-10-minute ordering cycle? So we're looking at targeting across all those, do-do targeting. And then on top of that, you can overlay a loyalty program if it makes sense financially. And Europe do run loyalty programs. In some of those markets, it's highly popular. And then what they do is reward based on purchase consumption and frequency.
You've seen the US do that as well. And they've played with tiers now where you can get small things for less purchases. So we are reassessing all the time, is loyalty making sense in our current markets from a loyalty program? What makes sense in our other markets that may not have loyalty now? Is there a chance to adopt it? Is it points-based? Is it service-based? But primarily, every communication that we do, whether you're new and existing, will continue to become more evolved around personalization and your unique experience in your basket.
One of the differences between our other major QSR competitors is digital is a four-year experience for them. So you'll hear them vocally banging the drum of drawing people into their digital. We're at 2005 digital business building to now 80%-83% digital.
In a presentation like today, a lot of what they're talking as new news is already old news. It's not like I even remove things from Michael's presentation. I said, "Michael, that's staying in business that we've been doing for years. It's not a new news for a strategy presentation." What you'll hear a lot more from Michael is the next generation of what we're doing, A, for that 80%-83%, but also that last 17% mile and what we're doing to that.
I guess if I can maybe try and understand it in the context of Japan. I know all their people around us are performing fine. What have we dissected? What's the potential consumer segmentation? What's the issue? Is it a recruitment issue? Is it a leaky? What's a retention issue? Is it an upsell issue? What are we doing specifically?
Because if I hear Martin speak a lot about Tier 1 TV driving sales volumes, but is it TV awareness and top-of-funnel? Is it a conversion thing? What specifically are we doing to fix Japan?
I think it's a great point, and feel free, Martin and Josh, to add to this, but ultimately, it's still the same approach we use across all markets. We've got to look at the frequency in Japan is the least out of our markets, okay? So you've already got less chance for you're going to have less repeat purchases. So even if you win new customers, you've got to wait longer to know that customer's coming back, A. But what I believe that offers is a great opportunity to one extra order from every Japanese customer is transformational to the business because you're off a lower base.
So what we're looking at now is looking at the last year, year and a half, and the current data, and looking at you've got price elasticity to take into account, whether that be voucher, voucher, and menu price. The products that were released most recently, have that brought new customers in, or have we traded up existing customers? So a lot of that analysis happens. We feed that back. We work with the local team and then adjust that to win new customers. And when we get those customers in, keep them. Like I showed you that last and so forth. And something that's really, really important to a low-frequency market is that media does buy a lot more acquisition than a high-frequency market. So it might be recruit. Are we? But it's not even just recruit. It's a constant yes, recruit's a one-word of saying it.
But it's a proportion of sales historically through a low-frequency market. It's literally—I mean, it's amazing how effective still TV is in Japan. By the way, still effective in Australia, but it's always diluting. So these media mix models, and Josh is an expert on that, so he can probably add color to this. But these monthly media mix models also is really helping us and trying to watch these customers in and out of the channel funnel. But I mean, it's nearly twice, isn't it, Josh? Twice the numbers of customer acquisition from media versus a more mature market like Australia or high-frequency market.
Yeah, that's correct. It's a very media-heavy market. And I think TV and print, that is the number one things that we're going to do, which is surprising in this digital world.
In some respects, I think it's more cut through now than we ever did in the letterbox because there isn't many people doing it, and then it complements each other, so as soon as you're carrying the messages up across a number of different media, you can imagine even TikTok down to three seconds, at least when you get it in the letterbox. You walk it, maybe people walk it to speed, but at least you get 15, maybe 15 minutes before that actually happens, and that's quite an important thing, and we hope that it goes on the fridge, which we're actually seeing great numbers on, but what I always describe as we're not in the lexicon of what do you want for dinner tonight to your family, so you have to be sort of out there saying, "Have that pizza. Have that pizza.
Have that pizza." Because it is that sort of market when you are not a very eaten food. With a chocolate bar at the checkout for the Australian viewers, we have to be there. That's TV, that's print, and that's also all digital and connected TV as well. So yeah, we have to spend more in media just to attract the customer. And then Michael's job is to then convert them through at a higher rate.
And even because sometimes we're not sort of going to basic one-on-one marketing, but media is one thing, product, and promotional price, right? So we could go out there and blow the airwaves of Japan. We're going to put another AUD 50 million on television. But if we didn't have the right product and promo, we'd be really diluting.
Vice versa, some of the product pricing, like the Volcano, looks really weird to an Australian, but very entertaining, very much in tune with Japan and overrates the media spend then. So in a market like that, we also track sometimes when we're seeing winning things and we pursue those even more than, well, I went back to that earlier. When you have inspired products, you sell at price you sell out. Otherwise, you've got a discount. And that's the flows that go through. Japan's a bit more extreme.
Maybe I can do a small addition to your question on the importance of TV in Japan because I talk a lot about TV, but it's more about balancing it out. As Don mentioned, right? It's TV, it's print, it's digital, it's the appearance of the store in the local community.
But to give you a little bit more of an insight on TV, the third or seventh day of March, we were on a special television show in Japan which is called Jobtune. And we were three hours on television, and it was only about Domino's, and they were judging 10 of our products. And the impact the days after that was actually massive. And it was free marketing for us, but that was really, really massive. So that shows me again that the importance of TV, especially in Japan, and also due to our media mix modeling, is really significant.
Thanks, Don. I'm going to explore store rollout or opportunities, mainly on Australia. And that's a market that's obviously doing well on a number of levels. Can you clarify the store rollout?
It looks like it needs to be about 60 stores a year of openings for Australia and New Zealand. You haven't really done that in the past. So what would drive the acceleration? And you hinted at the store payback getting down to three years. So can you just confirm some of the metrics around that?
Yep. So we're not, just to be really clear, we're not at three years as this very day. And we have the seasonality, and our best months, some of our best months as we end 40 seasons now are right in front of us, and that leverages into the whole average. And that's when we predict numbers. I'm walking from this meeting to a franchise advisory council where we're also mapping out the next few months of how all the margins are hitting that we think will happen.
Coming back to Australia, because we've gone from a rebuild period where we've been really slow, how many stores have we done this year so far? I think 17 or something in Australia. It's a small number. That we will build. So it's all going to still come down to delivering on the profitability. The deeper we get into making the stores more profitable, we think we've got a unique position right now, as we've talked about in our strategy. If that continues, it's an if. If that continues, the way we're laying it through, then you'll see those stores ramp out. The only other caveat for Australia is, as I mentioned earlier, is geographically, infilling the stores is challenging. Because in most of Australia, we do service it, but we don't service it as well.
And any of the comparisons, if you live in those areas, they'll make sense as soon as you go, "Yeah, yeah, you're right. I never wouldn't have picked up from a Domino's, but now it's in my neighborhood I do." Those sort of things. So yeah, there is a bit of timing alignment to that. But we'll come back and update as we're a bit more clear. All of those dates at the moment, as we highlighted at the half-year, are up for review based on how quickly the business recovers and to what depth it recovers.
Just back on Japan, the 20% uplift from 500 to 600 orders per week, how does store rollout play a role in that? Obviously, stores can help by getting closer to the customer and driving a better customer experience. But at the same time, it dilutes the personal numbers.
So should we be expecting further store closures in Japan, maybe a pause for a while, or do you actually need that store rollout to achieve that 20% uplift?
Yeah. So what we tried to telegraph in February and today is that we are in a pause in Japan. Now, a pause means that there's still franchise partners. We're talking averages. And there's still franchise partners who'll open the odd store here and there. But typically, we're in a pause mode to get our 600 orders plus. And once we can see that that's got a continuity and consistency, then you go back to store growth again because it's innate, right? If we've done that profitably, we didn't just buy the customer, but we did it profitably, then the nature of we franchise partners will go through that cycle I talked about earlier. They'll pay down balance sheets.
They'll start buying our own stores, and then they'll start opening their own stores. It's such a, I mean, we're in and out of it all the time. But what we want to talk about, and we were very clear about this in February, is we need to see it consistently over 600. But we're in and out of it all the time. I mean, Martin just shared a moment where we and way beyond that even. And so, but we need to see it back to back to back to back to back so that's got all the confidence, continuity for banks, for ourselves, for our franchise partners, and so on before we do that.
Sorry, it's Ross Curran. I'm sorry. Just picking up on Brian's question here. Can I come back to the end of your presentation section?
So this is slide 31. And you just talked about putting the countries into buckets. So buckets two and three had Malaysia, Benelux, France, Japan, and Taiwan. Can you just clarify your comments around that, the store openings and how we should think about this path of openings specifically with those five regions over the next three or four years?
Yeah. So it's a really good question. So if you're in bucket two right now, you've just got gradual growth at the moment. If you're in bucket three, really limited growth. So until what we don't want to do is put promises out there of when does a market go from bucket two to bucket one or bucket three up to bucket one.
Because we really need to show a consistency over six months' period to bring it to the market and say, "Now it's either now it's gone from three to two, or it's gone from two to one." Yeah. So right now, you would assume that only bucket one is going back into full growth mode. Bucket two will have some gradual growth. Malaysia is interesting because it's not a broken business. It's a business that's just got an external influence on its numbers at the moment. Huge enthusiasm and encouragement from existing management in the business because it's been a full corporate business. So they want to franchise. And I'm not sure, Josh, if you want to add anything to the Malaysia story? No?
No, I think that's exactly right. We're franchising. We'll see it. We're just franchising. We spoke with Mr. Lee at the half.
We have our previous CEO actually franchising, so that's actually an important step for us in attracting people. People are lining up with a lot of managers, and they can see how Domino's is going to change their lives, and then once all this other stuff dies down, we'll start our expansion plan as per our business plan then. There's heaps of models we're exploring there. We're looking at, I guess Malaysia is kind of a little bit, you've got the KL, and that's a different sort of training environment as opposed to East Malaysia, so you'll see different sort of models stand up there, and small footprints most likely, more than room units. So we are sort of adapting to the market, but it's going to be done through most of our growth, we're envisaging through franchising and also selling the corporate stores in that market.
So you've just got to get the balance right because you've got to grow your managers and grow your franchisees. And one of the learnings out of Japan is we rushed so fast, and now we're chasing that maturity cycle. We're almost through that there, but we're just going to be balanced in how we grow in Malaysia. But we still believe in the business plan. We've just got this external stuff added.
Great. Shaun Cousins, UBS. Just two questions if I can. Maybe just on aggregators, can you just talk a bit about the economics around is it sort of higher value versus percentage margin given that? And then maybe just to be really clear on the store growth. Given three of your two big markets, sorry, two of your three big markets in Japan and France are quite challenged.
We should expect that you don't achieve the 7%-9% organic store growth that is your three- to five-year outlook in fiscal 2025, as well as what you've said in 2024. And is that 7%-9% three- to five-year outlook even relevant anymore in terms of it's just a caveat until profitability gets there? I'm just curious around how you've been really clear on that.
Yeah. Really two really, really good questions. So based on the structure of our new contracts, typically in Uber, it's really surprising to us, but our franchise partners are actually more profitable often with an Uber order than our own platform. Both? Both. And part of the reason to that is that our coupons don't work in Uber. So there's not anywhere near the value offering, and it is slightly, not on everything, but it is slightly higher priced.
And so it's really funny because one of the fun things that we talk with our franchise partners about at the moment is, "I make more money from the aggregator than I do from your platform. What's going on here?" But it is a pure play, and we get a lot more loyalty, and customers enter our funnel, and we have a very high conversion. We don't have a bleed, and there's all these other benefits. And it's still 90% of our business are our own channels in places like Australia, and 80% of our digital business in most of Europe is also our own channels. Now, coming back to your second question was related to. Oh, store growth. Yes. Yeah. So we kept the 7-9 as an outlook because we still really believe when the markets are firing, that's our number.
But we will not achieve that in this year or next year because, as you highlighted, we have too many of the significant markets in bucket two and bucket three. And so the question then is, well, people want to put stuff out there, and we're saying, "Well, we can't put a number out there till we see these businesses into those healthier areas." One of the questions is, and I love all these questions because they're fair, especially as we get a new profile of shareholder assessing us at the moment, is that other businesses are broken. It's a 64-year-old business brand, and we've got a few problems and challenges in some of these things, but there's nothing that says to us that these are not things that we can't fix.
We haven't experienced what's going on in Malaysia, but when you look at how well the management team has responded and the fact that we were just lucky with the timing of the commissaries and so on, it still amazes me, the performance when I see the P&Ls that are coming in. That if that was a pure corporate market in Australia and we lost that much in one big hit, I'll tell you, we may not have been able to scramble as fast with our structures and the way we do things. So yeah, the ones that have the longest hangover to that store cap effect right now are France and Japan and Taiwan.
But I will say to you that the markets that can respond the fastest to store growth are Japan and Taiwan because, for whatever reason, with Europe, it takes that 9-18 months to get a store open. I mean, Japan's had sites open in six weeks from finding a site. I mean, you're talking about a three-month cycle. So when Japan does bounce, and you've watched that. The evidence is in the results. You've seen how quickly, as soon as results hit, the stores just came, almost within the same half of announcing a lifeline. The stores were open as well. We can't do that in Europe. And even through most of Australia outside of Brisbane, we can't do that as well with the different councils. So yeah, hopefully, that gives some ideas. Sorry, we've only got two more minutes. We can talk around lunch, but.
Thank you. The question I had was just on the cost program, which you've reconfirmed today, but you only talked about FY 2024. So I just wanted to understand about FY 2025 because that's going to be an important driver as wel l.
Yeah, that's a really good question. So the biggest driver of '25 is the annualized results of the actions. So the actions from all of the charters were as early as in July in ANZ, but a lot of it happened in September, even in ANZ. And you went throughout Asia into Europe. And only as recently as 10 days ago, we had the workers' council sign off on the plan in France, which was the last market.
So if you can imagine, and now that's being implemented as we speak, so you then get a full 12-month flow-through of those restructures and also the migration to the new support office, shared services. So we've already got a head of shared services, and he already has 80 team members that are getting up to speed. The shared service office will be something like 200 to 300 people. Those roles are being hired and replaced and filled. So the benefits start to flow through into next year. And of course, then in the 2026 year, you get the full annualized of both that have come through. Yeah. So that's how, and at this stage, as far as Michael, we're on track with the shared services. David, these two guys run that.
Yeah. Yeah. Thanks.
Just quickly, on the comments on third-party delivery opportunity in Japan, can you just talk a bit more about that? Like how material could that be? Which regions do you think it's a big opportunity? And just, I guess, the pros and cons of doing that.
Guys, just for the essence of time, I'll close out really quick. 3P in Japan isn't as profitable as it is in some of the other markets because of how actually low-cost our own wage model is. But the 3P is picking up out-of-time businesses. So that's when we do extended trading hours, and you only get these ones and twos. Low-order market, they still add. And it's when a time we don't have our own driver there.
But the 3P delivery is far more material in places like Australia, New Zealand, and Europe where you've got big penalty rate moments and also out-of-trade moments. So it's been really helpful. In France right now, our business closes between 2:00 P.M. or 2:30 P.M. and 6:00 P.M. and 6:30 P.M. And when Andrew Rennie and I, being naive Aussies, first went to France, we opened all our corporate stores and said, "What do you mean people don't eat in the afternoons?" And we were wrong as we bled those corporate stores for nine months. Nobody ate in the afternoons. That's changed. So since 2006, when we arrived in France, some 18 years later, we've now got high consumption of relativity or more familiar. And maybe that's been grown by aggregators, it's grown by migration, it's grown by youth changing from traditional French culture.
We are now rolling 3P and opening our stores, which then leads to once we get enough volume, we then open up our own OLO, and then we can bring our own drivers in. Also during COVID, we closed a lot of our stores early because you can imagine everyone went to bed. In a low labor employment market, it's been hard to get markets to open. We're leading that with 3P. Places like Australia were already reopened, and actually we've got longer hours. That's how we look at 3P as a testing place for us. We do monitor NPS. We do monitor product quality. We're constantly talking to the partner of 3P. We even threaten to pull it if we don't think it meets the standards because this is a transition place. It's a pivot to the next place, not replacing our own driver.