Okay, well, thank you for that. I can see now the attendees are in the webcast. Good afternoon, and thank you for joining the Domino's Pizza Enterprises CEO's webcast. Today you'll hear from management from multiple markets joining from different locations. As is our usual practice, we will not be providing a trading update regarding same-store sales, and our policy is not to provide guidance. Today's presentation will be recorded and available on our investor website. There will be a Q&A session at the end. You can type written questions into the Q&A box, and I'll then announce those during the Q&A session. I will now hand over to our Group CEO and Managing Director, Don Meij.
Thank you there, Nathan, and welcome everybody. Thank you for coming on our Zoom call this evening. Tonight with me, I've also got André ten Wolde, who's sitting in Germany right now as our European CEO, sorry, our European CEO. I've got Nick Knight, the Australian-New Zealand CEO, Josh Kilimnik from Japan. And we've also got John Harney for the first time talking about procurement and our partnerships, as there's been a lot of questions around procurement and supply. And later on, Richard Coney is available for questions as we go.
So, next slide, Nathan. Okay, one of the things that we learned very early on in the crisis is that for many of us, we would have thought in all the nine democracies we trade in that we would have had a right to open if we paid our taxes and followed all the policies and rules of those different economies.
But what we quickly learned, and it happened very quickly, is that any retail business that was trading was actually a privilege to trade, and that became very much an underlying theme in our business. Next slide, Nathan. We also decided to use this opportunity. If you recall, we shared both at the AGM last year and our shareholder update up in Brisbane. We released our updated purpose and our values as a business, and we really made sure that these were the guiding line. With so much uncertainty, one of the ways to aggregate the minds and the hearts of our franchisees and tens of thousands of team members around the world was to be guided by this purpose and our values. Then, on top of our purpose and values, we also used a number of guiding principles.
The first one is that each of the nine countries would have different government and national health authorities, and we made sure that we were referring as quickly as possible to each of those policies as they were being brought to market because different countries were going through different variations of their lockdown, and it just became a nice central way for us to be able to make decisions and feel comfortable considering everything around us at that time. We also made the decision that it was better to be safe than to fall short. So, we were about to have a rally in Australia and New Zealand and another rally in Germany, and there may have been up to 1,500 franchisees and team members at our rally in Australia.
The risk of even just one person attending that rally and then maybe putting our whole system in Australia and New Zealand at risk was just too big a risk to take. We were early in canceling that rally, and we took the risk that in the end we could have been called Chicken Little or overnervous, but we just felt that when it comes to our team member safety, our franchisees, and our community, that it was so much more important to make sure that we were acting, if anything, to be too safe rather than fall short. We also had five different individual groups that we saw as a way of keeping our privilege to trade, and that was, first of all, our team members, then our customers, our franchisees, the community.
And typically, we haven't really engaged much with government as a business, but because of the nature of the government's good lockdown, and we saw that in New Zealand, then we also started engaging with government to make sure they were aware of what we were doing. Also, very early on, and we learned this largely from France, that in the end, France could have had most of the stores trading, but the way both it was presented by the government and then the immediate reaction in our system, it led to a mission mentality, and that became a guiding way that we've operated ever since. And that is that for a lot of people, they expect a public company to always put profit first, and in a crisis like this, there can be great consequences when you put profit before people, before franchisees and customers.
So we rose to that moment to say, first and foremost, it's time to do good for the brand, for the health and well-being of our franchisees and our team members and our customers, our community, and also in government, rather than just think of doing well. And an example of that was with JobKeeper. When it first came out, if you were a franchisee in a certain area, you may have been down 15% in sales, and maybe you would have thought for a moment that it was appropriate to go further down to get JobKeeper. And we said, rather than do that, let's try to get your sales up so that we weren't relying on the government purse strings where it wasn't necessary.
But each of these, it was first our mission, and we rallied the hearts and minds of our franchisees and team members, and subsequently, our own internal surveys and also even our brand surveys to the customer have shown that that paid off. If there was ever a time to know the benefit of being part of a franchise system, it was during this crisis.
It's not lost on DPE that we're a franchisor and a franchisee, and I can absolutely tell you over the years, many shareholders and analysts have asked me, DPE pays so much royalty to DPZ, and what do you get for that royalty? And I can tell you in this crisis, it really comes to how much truer it can be that we were fortunate enough to be able to see the trends and how China was dealing with the different going into lockdown and coming out of lockdown, or whether it be Italy or whether it be South Korea.
And what we quickly learned is that when similar circumstances were applied to each of our countries, we had similar outcomes, and that gave us some comfort of how we could guide our franchisees through the curves as we went into deeper and deeper lockdown and even more lockdown in some countries than others, and then as we've come out. And it also gave us some tools and processes, and we not only took a lot from the Domino's network and learned a lot, but we also contributed a lot, and there was just really frequent communication through the network. We've been very proud as a business at Domino's to be a business that moves fast and be agile, but what we learned in the first four to six weeks of COVID-19 is that we had to be moving faster and more agile than ever before.
An example of that was with Zero Contact, where our first analysis of implementing that business was coming back. It would take us three weeks, and we said, "Well, that wasn't going to be appropriate. We needed three days." We went back to the old idea of putting a prototype out that the customers build it right, and then over the subsequent weeks, build it right. So many times when we're putting our team members first, our customers first, and safety first, it was very much about getting it out to the consumer, to our team members, and then building it right for the longevity as time goes on.
And we're now living with COVID, and this particular slide here shows just how many significant decisions were being made at such haste, and in hindsight, appeared to have been right, and the business has now benefited from that. But just when you look at the significance and the size of some of these decisions, it showed the pace we were moving at and how early we were moving at as a business. From our customers, our customers have moved rapidly from really different phases, and I want to walk through these phases. In the very early phase, there was skepticism both led from the public or from government, from media that was being shared about the seriousness of COVID-19.
In that time, when we were rallying as a brand, we were trying to do as much as we could, shaping that mission mentality with our team members and our franchisees, that every meal we served the customer meant that that customer didn't have to leave their home, and with our Zero Contact processes, we were keeping customers safe, and with the way that we were managing our stores, we were keeping our team members safe in an environment of skepticism, which was often challenging in that when you're bringing out Zero Contact as early as we did, it was so new at the time. Was there something wrong with the product that you had to do a process like that? There was a little bit of fear in the business.
What we quickly then moved to, as in days, countries were going through into deep lockdown, there was real fear in the community, and so our communication was evolving week to week, and we were putting safety advertising on television. We started putting a safety seal on our packaging to reinforce to the customers that because of the kill step with our ovens, where our ovens cook between 235 degrees Celsius-265 degrees Celsius, depending on the market, that once that pizza leaves that oven, which has a kill step, that the only hands to touch those products are the hands of the customers post that and make sure that we could just reassure the customer. At the same time, we were doing a lot of training and development, as you'll see, inside the business.
And now we're moving to a place of, this is the consumer's words, of a little bit of fatigue, and we have to be careful also of fatigue and complacency in our own business, that there's been so much noise for so long, and our customers are telling us that we get it. We're all in this together, that this is unprecedented in time. We've heard that over and over, but what are you doing as a brand? And so this is when we've now researched and found that we have the license to go back and talk to more joyful experiences and some of the fun that we can bring and live our purpose and our values even more again.
And good advertising that would have worked pre-COVID, if it's good advertising and it still respects some of the things like social distancing and so on, it's still good advertising today now in the current world. And so you'll see that when you see some of the ads we're about to show you. The next few slides are slides that came out of the Financial Times that we've been able to refer to, and it showed the world in various different lockdowns. And we use this as a reference because depending on how locked down a business was, we were able to, that showed us the behaviors in our business. So as we were either locking down further or releasing lockdown, as we've now seen, of our communities, then we could predict, and we were rallying our communications, our marketing, our systems to meet that.
This next slide shows you the breakdown of our own countries, and you can see Japan, as we went at this particular time, was the least locked down, and you can see France and New Zealand was the most locked down. Then in between, you had the other markets. In the least locked down market of Japan, we saw strong, and we talked about substantial in our previous update. We saw substantial growth in that market that was both delivery and carryout. We're able to refer to the carryout because the markets that were trading in between, like say, for example, Australia, we had really strong delivery growth and less carryout growth. As we see markets unlocking, as we are now seeing, we've seen the rise and return of carryout. For whatever reason that we can talk to, that delivery is remaining strong.
And as these markets, France and New Zealand, came out, and they worked with those same lockdown modes, then we see the same sort of trends between delivery and carryout. So it was just a third-party reference that we could use because it actually is how it worked in our business, and it was a good reference for us to talk to our franchisees. And it also allowed us to be ahead of the game so that we knew a government was likely to announce something on a Sunday, and we were aware of it maybe on a Monday before, and we were preparing already of what we thought that would mean and how the shift of communication for operations and marketing would take place in the business.
So at this point in time, I'm going to hand over now to André ten Wolde to talk about Europe specifically. Over to you, André.
Thank you, Don. Good morning, everybody, from sunny Hamburg. I'm really happy that Europe is unlocking a bit. I'm able to travel again across our European countries, but also doing a lot more through the technologies that we're using today, Zoom, which has helped us a lot to stay in business and keep communicating between our different countries. Nathan, can you go one slide back at the unlocking Europe? I don't seem to. Yeah, thanks. So while we're unlocking and we're in different phases in different countries, as we were at the start, the initial reactions of the European markets were quite different, once again showing that there's no real Europe, but it's a collection of markets with different cultures and different reactions, both from governments as from people in the markets to these situations. To Don's point, the strongest reaction was in France.
We closed the market, not because we were mandated to, but because of the government saying that they would look after any business that is closed and mainly telling people to stay home. So also our staff stayed home and didn't think that we were essential enough for them to show up. But I'm happy to report that all stores are back open in France. We did that in a record time. I think we were well ahead of most of the QSRs, and the team has done a great job in reopening all stores in France. Looking at the summer ahead, Nathan, next slide. Sorry, I'm trying to move ahead. Yeah. I think we're going to see a vastly different summer in Europe.
Normally, any given summer week, 30%-odd of the population would be abroad, whether that's in the south of Europe or even flying intercontinentally to the U.S. or Asia. We are expecting a staycation this time, and we think that it's going to be a vastly different summer with more opportunities for us to build sales, and we're doing a lot of marketing things and product things to talk to the customer and still making it a great summer for them. One of the things is the big Barbecue Range, talking to people that normally would go in the backyard and barbecue or at the campground in the south of Spain, but now doing that at home with a beautiful Barbecue Range that we are launching in France and Germany, and we will change our offers on rebuilding the carryout customer base, which we've seen decline during COVID-19.
Also here in Europe, we saw a big uptake of delivery orders, but especially in markets with high pickup percentages, we lost a lot of customers not trusting themselves to go out there and pick up pizzas. And as we did over the last three months, we've increased our share of voice on media. We were able to buy media at better rates, so that already increased our share of voice, but also we saw our competition investing less, where we invested stronger and saw the results of that. So we were expecting a different summer, and we're geared up to tackle that different summer. And the good thing, obviously, is also that if our customers are not on vacation, that means our staff is not on vacation too, so we can staff up for a really big summer.
Just to show what we're doing as the market is turning into a new now, we're doing a lot of research on our customers, and we feel that customers are getting a bit tired of all the commercials that are around COVID and COVID-only and all the measurements we've taken. They had its place before, but now they want us to talk to them about how we can make their lives better. And the first commercial I show you is a German commercial talking to the fact that football is up again. The competition started two weeks ago without any spectators. So normally, our customers would go to the stadium and have a typical German Wurst, Currywurst, at the stadium, and we're giving them a great alternative where they can sit in front of the telly and watch a good game while obviously eating a Domino's Pizza.
So let me show that commercial to you now.
[Foreign language]
So as you can see, we still reinforce our contactless delivery and pickup, but it's not all about that anymore. It's about living life with COVID, and that means some things are still different, but we're also getting back to normal. Football's on, and we can enjoy that with a great pizza. The second commercial I'd like to show you is a French commercial. And to Don's point, those commercials that used to work before COVID, we can now bring them back if they deliver the value for the customers that they should. This is the commercial that we ran for the Crazy Tuesdays and Crazy Thursdays we do in France. And you'll see it's quite a crazy commercial.
You'll see a unicorn, but the point of the whole commercial is that there's lots of crazy stuff going on, but the person in the commercial sees that the craziest thing of all is not the unicorn, but it's the low price point, the value we're delivering for them in France. So if I can.
[Foreign language]
Very culturally aligned with France. I'm not sure if a shouting guy would even work in the Netherlands, but it does absolutely work in France and shows the customer how crazy it is that we can have EUR 7.99 large pizzas pickup, which is a very low price point compared to other QSRs in France. Our Tuesdays and Thursdays have worked very well. On the store rollout, we've seen an initial low when COVID happened. Franchisees paused, but it was even more caused by local governments and councils closing down and so not processing our permit requests. It was with the utility companies that had issues getting out there and making sure that we have enough electricity and gas in the store. That pause has gone. We still managed to open a couple of stores per market in that period. We're now back full on.
Councils are working. Utility companies are back on it, and franchisees have the confidence to reopen stores. The good thing is that among this all, we were able to open our 300th store in the Netherlands, which is obviously a big milestone for that company. And I'm expecting a different summer for sales. I'm also expecting a different summer for store openings, where normally in July and August, we wouldn't open a lot of stores. But I guess this July and August will show that we open more stores than normally. And obviously, there's opportunities for us out there. It's not very visible yet, but we do expect real estate rent prices to come down in the future, so giving us more opportunities for new stores, but also talking to our landlords for current stores to get better deals.
And then, my last slide is on. We've announced that we're investing heavily in a new commissary in the Netherlands. I'm happy to announce that since this weekend, the commissary is fully operational. So we started delivering out of this commissary more than a month ago already, but the dough production was still done in the old facility. This weekend, we moved the dough production over, although that always goes with some teething problems, but we managed to deliver all stores their dough out of this new facility, which is an absolute state-of-the-art facility. And we're hoping next weekend to move the office. It's still going to be quite an empty office because people are still working from home, but at least we move over from the old location, and everything will happen from this new location in the Netherlands after this weekend. And that's it for me.
I'd like to hand over to Nick Knight, the CEO for ANZ. Thank you, Nick.
Thanks, André. Hello, everybody. If we move on to Australia and New Zealand, one of the big strengths of the Domino's model is that we operate two separate businesses, really, and that's a delivery business and a carryout business. Very rarely do those two occasions cannibalize each other. While we've seen a big increase in the delivery business broadly and a decline in the carryout, especially in the early stages of this, what we have also seen is a lot of those delivery customers are new customers. That's why our goal is to retain a lot of this delivery growth as we focus on making sure that we execute for these customers and we continue to provide a value proposition that makes sense and is relevant.
And as we're now seeing a lot of the initial changes in customers' behavior, such as the weekends were quite dead with no sports and late nights were quite slow and peaks and dinner rushes moving too early in the day, a lot of these behaviors are starting to unwind as we get into this next phase, meaning that a lot of that carryout business is now returning. And while a lot of things have unwound to a point, some of the new practices and learnings that we have developed, we're going to carry through potentially into the future, such as Zero Contact delivery. That might be here for a while yet because customers are liking that aspect of our service.
And as we return to this new now, return to sport, those kinds of occasions, one of the things that we talk about is that actually when we sit back and look at a lot of these trends that have developed and are now sort of becoming more popular, it's more of a great acceleration of things that we were very focused on already, so it gives us good confidence that the strategy and the plan that we had before this is still the right plan moving forward, so Don mentioned earlier the customer psyche around fatigue, and that is very much around the safety messaging and all of the very like-for-like advertising that we're starting to appear, so we took that insight, and I want to share with you now our current campaign.
It's been on air for two weeks now, and it's for the New Yorker Range, which is a very popular range existing in the Domino's range, has done for a while. We refreshed that, very conscious not to give stores any extra complication during these busy times, but we also tried to add some light-hearted escapism. So I'll play this for you now. See? See?
Domino's is bringing New York to your living room with the new Tastier New Yorker Range, now with even more authentic ingredients like huge pepperoni on a giant-sized New York pizza. Try one from just $19.95 delivered from Domino's.
So, as we look forward, thankfully, our business, as I mentioned, is largely carryout and delivery. We don't have a lot of dine-in facilities, and the facilities we do have currently remain closed, so we can facilitate the reopening and safety of carryout as we move forward. But we're also learning a lot. We've learned a lot from our highest volume stores in how we can take a lot of these efficiencies into our operations permanently. And to that point, our unit economics and franchise engagement throughout this period has been really strong in this last period, in large part due to how quickly we were able to meet the needs of our customers and the way that we've been able to communicate with our franchisees on a really regular basis. And it's, again, really illustrating just how important it is to have strong franchisees who can execute the model.
It's one thing to be able to move really quickly and come up with strategy to be able to change with what's required, but it's quite another to be able to operate that in hundreds of stores with thousands of team members. So I want to thank our franchisees for how quickly they've moved with us to these changes. To that point, while people were very busy handling lots of change, some franchisees paused their expansion plans, and we also paused our new store rollout plans. And we're already back underway with those things, but as you'd expect, even if we wanted to be opening stores, it would have been almost impossible to be doing that during that period.
And if anything, this increase in the deliveries that we've seen has really just reinforced that you can't beat from a customer experience point of view or a unit economics point of view having stores close to the customer. And this reinforced our strategy around that. So I'm going to move now on to hand over to Josh.
Good evening, everyone. Sorry for my slides to catch up there. I want to give you some color around Japan and what happened there. It's probably one of the first countries to take some big measures against COVID. In fact, it was in February where Prime Minister Shinzō Abe suggested that schools should be shut and restaurants and karaoke and department stores. Of course, with the growing anxiety and the uncertainty, that's exactly what happened. Then it moved from there to a full state of emergency. That started in early April and went for about seven or eight weeks. During this time, a lot of sit-down restaurant chains closed along with all the standard, all the smaller single sort of beef bowls and coffee shops all shut down. In fact, I think Starbucks shut down, well, I know Starbucks shut down over 800 stores through this period.
What we can see in the public numbers is that there's a sharp decline in sales. Now, we only have it to April, but because the state of emergency actually went through to the end of May, it's safe to assume that those numbers continued on that same trend. One thing to remember about Japan is that while people live in Japanese apartments and they're not really equipped to cook in those apartments, they obviously still require food. As they started to move their patronage towards trusted brands, and they actually started to move to delivery and carryout options. Thankfully, we're actually really good at this. If you just go to the next page. Okay. Oh, sorry. One before that, sorry. One thing that was asked at the previous update is that has the sales growth in Japan been significant?
Now, it has been, and it's our view that this was a result of the local conditions. But more importantly, it's more about how our management and our stores really prepared for this. COVID was a great test of all our previous strategies, which was spoken about at length in previous updates. So when we talked about fortressing stores and we talked about building a Barbell Strategy, offering the right product, service with the right image. And of course, Project 3TEN, they've really been tested through this period. And after seeing the results, I'm even more confident we're right on track. Now, during this time, we've also been listening to our customers. In fact, every three weeks, we're doing focus groups on Zoom or on MS Teams. And a lot of the responses we've had have been in the in-store responses has been a result of hearing the customers.
Things like zero-contact drop-off and zero-contact carryout, we're part of that, and we've also been able to tailor our marketing messages much more frequently, but there's a couple of things we've learned. When we looked at zero-contact drop-off, we actually uncovered a couple of other things. We uncovered that people actually like this option anyway, and they like it because they actually just don't want to deal with the delivery driver at their front door, so one of the key learnings for us is that while people want to customize all their pizzas and all what's on the menu and get it delivered, they also want to customize the service options, and we're going to remain really close to this and just make sure that we've got all the service preferences that our customers want, even post-COVID.
Now, moving on to the question of growth, where's it coming from, new or more frequent customers? Well, the answer's both. We can see that even some of the other chains are experiencing exactly the same thing. Our job now is to retain them. And we do that by our standard focus around high-quality meals, lower delivery times, and the whole business has been focused on that. Now, part of this relies on having a lot more team members. And we've been fortunate enough through this time to be able to recruit more than enough team members that would ordinarily come. Normally, we're constrained through labor. We've actually updated the markets on that many a time. But one way we think about this influx of people is that it actually serves us for our future strategies as well.
As you know, we only employ people from within, largely, and those people normally go on to be our franchisees. We do not take external franchisees in our business. So more people suggest that we're going to have more managers and therefore more franchisees in the future. In terms of our broader strategy, there were questions at the half-yearly update as to whether we had the right pace of rollout of new stores and whether they'd be franchise or corporate. Really pleased and encouraged with the engagement of our franchisees. They're very eager to open stores and to buy stores from DPZ. But one thing to note is that we're going to continue to open new stores and to own corporate stores. We're also pleased with our strategy of more stores, having more kitchens closer to the customers.
And this will continue to help our Project 3TEN strategy. And we've seen this in our service results. In fact, we've had a couple of weeks of record results in certainly average delivery times. And it's not just us marking our own homework here. It's actually we see this in the response from our customers through our NPS scores in which we've seen record NPS. Just moving to the next point, we've also really bolstered up the team here. We're looking for further engagement. We mentioned last time that we had Ben Oborne coming across from the ANZ market, who's a bit of a seasoned expert here. And he's really been helping with that engagement piece and really activating sales on a store-by-store basis in Japan. Next slide, Nathan. So moving forward, I guess the question is, how do we continue to grow?
I wanted to recap on a presentation we did some time ago. Doesn't seem to have gone to the next slide there, Nathan. I'm not sure if it's me. We talked about a large segment that's growing in Japan, and that is these single households. This trend, certainly through this time, has not reversed. This group has been very vocal to us and basically told us we're not priced in a way that's relevant or meaningful to them. In our current pricing strategy, we had a lot of deals focused at two pizzas. If you look at our Big Wednesday, it's three pizzas. We have suggested add-ons of more pizzas, so mainly for big groups.
Our strategy now, as we look to really answer not only those big groups and move it from a special occasion meal, but it's to really provide an access point for these consumers. So we've done a couple of things. We've added a few layers to our business, and this actually launches this week. We're actually adding Hangaku, which is half-price carry-out. And just to balance that up, because we are a delivery and carry-out business, we're actually offering no minimum spend on delivery. This answers the various consumer tensions, not only with the single households, but also the other households that often wonder about our pricing strategy. It's a very clean pricing strategy. We're very excited about it, and we're hoping that we envisage us benefiting from the first mover advantages through this differentiated structural pricing change in the market.
So keen to update you more on that in the full year. But we're really proud about how we've operated through this period. And I might just hand over to a new face now, Mr. John Harney, who is our Group Chief Procurement and Partnerships Officer. Thank you.
Thanks very much, Josh, and good afternoon, everybody. I wanted to give you a brief overview of how we manage supply in DPE globally, and especially how we manage through the height of COVID and the impacts it had on us. But before I get to that, I just wanted to give you a brief overview and a little bit about me. So I've been with DPE now for nearly 15 years, and this photo was taken 15 years ago.
When I joined, we just had, I think we were just getting up to 300 stores, and we just bought the New Zealand market, starting our international expansion, so it's been a hell of a ride from then till now where we're nearly 2,700 stores across nine markets and multiple continents. Before I joined DPE, I was working with Unilever and ICI, managing their regional procurement up in Asia. A key point for me is I've recently relocated to Europe with DPE, and I think that's a testament to how multi-regional this business has become, and also a testament to the fact that we're investing and resourcing to ensure we grow the business across the globe. Today, a bit like André, I'm coming to you from sunny Utrecht in the Netherlands, and after this call, I'm about to go down the road for meetings in France.
As Europe continues to open up, it's allowing us to travel as it has done for André as well. Honestly, no matter where I sit, I'm ultimately responsible for buying it, shipping it, and ensuring that it's safe for consumers. Really, how hard can that be? It's just dough, cheese, and sauce. It's pretty complicated. Don's already mentioned speed and agility is a key part of our business. Of course, an agile front end requires a very agile back end to support it. That requires a lot of hard work. Agility is not something you do on day one and then it stays. It's a constant requirement. It's not a set and forget. Domino's and DPE, especially, is a relentless business. It never stops. The flow of goods never stops.
Somewhere in the world, there is a delivery truck pulling up to one of our stores every minute of every working day. And that's to support the fact that we sell a pizza every couple of seconds. So it's an absolute relentless supply. But to be relentless and to be agile, of course, we need to be lean. And to be lean, we need great partnerships and great relationships with our key suppliers. And that allows us, working with those key partners, to drive efficiency and innovation to maintain that agility and speed. Next slide. Thanks, Nathan. This map just geographically showing you where, in terms of supply chain and distribution, where our centers are. So no surprise, we're spread pretty evenly across the markets in which we operate. But in all of those locations, there are three key areas we're always trying to maximize.
Agility, as we've discussed, but obviously value. Delivering value to our stores and ultimately our customers is a key requirement of our supply chain, and for our franchisees, we always have to be the best place to shop. So we drive value for our franchisees, ultimately value for our consumers. While doing that, we obviously have to maximize food safety. If anything, this crisis has reinforced the need that people want to be comfortable at everything from the very source where we buy our foods through to that end consumer, is secure and safe. We need to secure supply. So obviously, we're relentless, we're agile, but we simply cannot run out, and we don't. And by maximizing all these areas, we hope to maximize that customer service at the end of the day. But to be clear, with this geographic spread, it's not a one-size-fits-all in DPE.
There's a variety of factors that impact our route to market, so customers in some markets prefer a pan dough, like Germany, whereas France is more a hand-stretched dough. Best results for pan dough is to make that fresh inside the store every day. We do this in ANZ and Germany. Where we have high-density stores, as André already mentioned, we've built a new commissary in the Netherlands, and it's a great example of high-density and a very small geographic area that lends itself to us owning and maintaining central dough production and distribution. Then when we have markets like Australia, which are much more spread out, we would lean towards, and we use third-party logistics to maximize our ability to service our stores in an Australian environment.
And then finally, we also have hybrid versions of it, like Japan, where we have a mix of high-density, imagine a Tokyo or an Osaka, but then harder to get to areas in the north and to the very south where we would use. So in high-density areas, we're using third-party logistics and centralized dough making. And then as we get further out, we go to making in store. So it's not a one-size-fits-all approach. It's much more about finding the best fit for the market. And at all times, we're trying to maximize those five key areas to drive value all the way through to our customers. Next slide, please. Thank you, Nathan. So our response to COVID, I mean, no surprise, our first absolute step was to secure the safety and hygiene of our own people and, of course, our customers.
It's not as simple as it sounds because in lots of cases, we were buying personal protective equipment for the first time or existing equipment in quantities we'd never had to buy it before, so you can imagine masks and gloves and sanitizer, even the Perspex shields that were appearing in stores at that customer interface in some markets. A lot of hard work to find and access those materials because, as I say, they became absolutely scarce as hen's teeth overnight, and to put it in context, without sufficient sanitizer and hygiene products in a store, we simply can't trade. Getting those materials as required into each market, each market had different requirements depending on government requirements, was quite a challenge, and as I say, an enormous amount of work to keep our stores operating from a hygiene point of view.
And then really step two or really step one A was securing supply. Obviously, where we could sell a pizza, we would sell a pizza. So our intention was always to be able to trade. And with our logistics and supply partners, all of which continue to operate and still do through the crisis, food in all our markets was considered an essential service. And we were able to, through our partnerships, access continuous supply. But again, it's not luck. It's a lot of hard work and a testament to those relationships and structures that we have in place where all of our partners were under a lot of duress but chose to certainly ensure supply through to DPE in all our markets.
So at no stage through the crisis has any of our stores been forced to close through a lack of supply of ingredients, which is an incredible achievement. Equally not to be underestimated is we ran full pizza menu in every market throughout the crisis and still do. So effectively, what that meant is at the height of the crisis, our customers could access their favorite products as they had always done and get them delivered contactless and safely throughout the entire crisis. So incredible results and again, a result of a lot of hard work. So then what does our medium to long term look like? As you've heard from all of the CEOs, we're seeing and expecting changes in consumer expectations. So this could take the form of an increase in value expectations. Sustainability is obviously an area that people are beginning to discuss.
And of course, that supply line of local versus global and where that sits. We're working with all our markets and with the CEOs on this call to ensure we're meeting those changes head on and accommodating them where we can. And no surprise that requires our partnerships to be more than ever working with us to help us achieve those changes as we go forward to drive, obviously, continuously driving agility and then ultimately driving innovation to meet those new consumer requirements. And if I can just finish by saying if I've learned anything in these last few months is that you can only plan so much. What we really need to be able to do is respond and respond fast, which we have done and we continue to do. Thank you. And I'll pass you over to Don.
Thank you, John. Incredible. Get everybody supplied. Thank you. I just want to talk now about living with COVID, as I close out on where we are today. At DPE, we take the position that we don't know how long we're going to have to deal with COVID and are we going to go through second waves in parts of the world. But we do operate with the strategy that we do believe it's going to be in place for some time. Many of our strategies are more long-term rather than just short-term when it comes to some of the systems and processes that we have. We continue to put team member and customer safety first.
We're very conscious of the fatigue, both with customers that may want to walk into our stores and are just over some of the restrictions or to even our own team members who might come complacent. So just staying alert. We don't want to be a super spreader. We don't want to be contributing. We want to be able to be as safe as we possibly can for our people and our customers. As a team, we've had economists come on calls. We obviously read and all the speculation and you're all the sophisticated analysts and investors, so you probably have all your own individual views, whether it be a fast snapback or a sustained downturn. DPE, we're preparing more for the worst. Hope's not a strategy, but if it does snapback, then that'll be fantastic for each of the countries and economies.
But otherwise, we're making sure from a marketing, from a unit economics, and from a value perspective that we can say really primed value that the messaging is in tune with where the customer is at. And at one point, there's moments where people want that relief, but also understanding that people may be more conservative with their spending or just cannot spend as much because they may be unemployed. So that's a perspective we take right now. We've worked very, very hard in this window to improve the unit economics, which will be flowing now and into July and August, just so that we're ready that if we need to go deeper on price, our franchisees can viably and profitably do so. And that's what we're committed to with the team. Next slide there, Nathan.
We also now are shifting a little bit that we're going to continue to do good, but it's also important for our stakeholders, being our franchisee and you, our shareholders, that we also do well. There are a number of things that from a macro point of view that we can now go harder after, and we are going harder after for the benefit of our franchisees and for our shareholders. And we call that it's a time to do good now and well as a business. So I talk a little bit about this.
Coming into COVID-19, the same strategy is serving us well in that our view is that the Internet of Food, that delivery as a whole, digital delivery as a whole, has been the engine of DPE for the last decade and is definitely the engine that we're firing and continuing to support and drive as we are now. If anything, COVID-19 has brought forward delivery. Whether it's sustained is still yet to be known. We can only speculate, but without a doubt, the delivery of everything has increased quite significantly in the windows that we're operating in for all retail, and so the size of the pie has got bigger, and therefore it's for us to go after and make sure that we're putting our best foot forward. With that in mind, Project 3TEN is an absolute differentiator for our franchisees, our store managers, and for our investors.
And so we continue to invest in Project 3TEN, both from the technologies that enable it, and you'll see new technologies come out into the market in the next few months, but also continuing that strategy of getting closer to the customer with more stores. We can see some distressed retail there, and so it's a time when we can even look to improve our portfolio with relocations or lean forward and make sure that we're getting as many of the appropriate locations as possible in this moment in time. Franchising has once again shown that it's a huge importance to DMP. We mentioned that in our prospectus when we listed the business, and it continues to be true today. I'm very, very thankful to be part of the Domino's network globally and all of the learning that we continue to share.
The frequency and the constants of learning throughout the world and what we're all seeing and how we can do better as a business and for the betterment of our franchisees continues to happen from an individual franchisee all the way through to the global network, and we're telling our team that this is one of those moments to be bold, to be creative. The customers are fatigued of just the repetitive, that if you squint, it seems like everybody's doing this. It seems like a good idea at the time, and then everybody rallies to do the same thing. It's those that are more in tune with consumer feelings, both from a product, a technology, and a communication, are the ones that are going to do better in a time like this. Back yourself. Be bold. Be brave. Invest in that distressed media.
Why wouldn't we for our franchisees and our shareholders that if you normally invest $1, right now we're seeing that there's people that have removed themselves from the market, so that improves the share of voice. But also you invest $1, you might get $1.15, $1.30, or in extreme case, $2 for your normalized investment. So it is a time when we do have the right message and to back ourselves and go after that to reinforce that store growth and to make sure that we continue to work on our people and culture that while we've done well with that in the last three months, not to take that for granted. People and culture is investment that's ongoing and constant and that we can always do better, and we will continue to try and strive to do better as a business.
So at that point in time, I'm now going to hand over to Nathan for Q&A, and I'll be the center of that from Nathan, and we'll farm it out to each of the CEOs. Thank you.
Thank you, Don. We've received a number of questions via email and then live in this session, so we'll get through as many of those as possible. If I could start with Joe Little from Morgans, who's asked, Keen to hear thoughts on how quickly the store rollout can ramp back up again. Obviously, there's a pipeline in place. And similarly, Craig Woolford has also asked, noting that 55 net stores have opened in the second half. And can you quantify how much the store opening program was impacted by COVID-19 and how many corporate store openings, and do you see COVID impacting store openings over the next 12 months? So wrap up with those two questions.
Yes. So none of us have that full crystal ball to what might happen in the next six to 12 months ahead. But what I can say is this, as you've heard from the CEOs tonight, there was a moment of pause in that March and April and a little bit of May. And then now, as you've heard from all the CEOs tonight, it's back to business as usual. And so you would expect more stores to open in June. You'll expect more stores to open in June. And I apologize that as you saw in December, many of these will happen in the last week. It's just how the business flows. And you also heard, and I can hand over to André, that Europe is expecting to have a stronger summer than we would normally have.
But it's pretty well back to business as usual with the mindset of trying to go harder against some of the leases. But André, any color to add to that for Europe?
Yeah. I think after the first pause at franchisees who were just waiting to see how this would pan out, I think they see that unit economics are still strong. I think it cemented their idea that the delivery edge is even more real than it was before. So they're keen to open more stores, and we will over July and August, which normally we wouldn't. It's still a difficult month because some of the local councils shut down for a couple of weeks. But we will open most of it. It was a pause. It was a delay and not opening less stores. That's what I can see in Europe.
Yeah. So from a shareholder's perspective, between now and when we report, you'll see a notable number of stores that will open, and especially in July and August, more than normal. Thank you, Nathan.
Thank you. We have a question from Grant Saligari who's asked, on the status of any subsidies to franchisees, has franchisee trading normalized to an extent that the additional COVID-driven subsidies can now be reduced? And at the same time, were franchisees eligible, or did they benefit from COVID-specific government subsidies?
So the answer is the first question is that yes, we're now back to a more normalized environment and into the new financial year. What happened during COVID-19, the core period, has mostly been and will be all unwound by July. Of course, we've got another whole year ahead. I don't want to speculate because we may go into second waves and so on. As far as I might hand over to Nick to talk about JobKeeper as that's a specific question on Australia.
Yeah. So obviously, there are a small number of stores, city and tourist stores that were affected, and some of those stores would have qualified other franchisees in their own right. But broadly, we haven't accessed those programs because we haven't needed to. And we're proud of the fact that we've been able to keep trading.
Thank you, Nick.
A question from Michael Simotas. One of the challenges in Japan has been to capture more dining occasions. Has there been any sign that Domino's is starting to capture more dining occasions, and will this be sticky?
Hi, Michael. So I assume it's dine. We're not talking about dine-in or sit-in because that is actually not available right now. I mean, it's just starting to be reintroduced back in. We honestly feel that the new pricing changes that we have will actually open it up to a lot more occasions. So if you're talking about different dining occasions, it just allows access to everybody. We can then bundle that up, and certainly how we message to the various different occasions and segments of our society will help us open up and really target those consumers. So I actually think we're actually seeing a lot more layers possible in our business, and I think that's very positive for us as we move our marketing strategies forward.
Thanks, Josh.
Great. Thank you. From Andrew McLennan, directed to André, how has the distressed media market shifted your strategy around TV media spend versus the prior plan?
Yeah. Specifically to TV, obviously, we changed our media mix considerably. Right from the start, we saw radio being less effective because of less drive time, and we were very agile and very quick to change. I think media businesses tend to be slow in changing their rates, but we now see that they did, and they have to. And we're definitely investing a lot more this summer than we would normally, also because people are at home. And we also changed the timing over the day because people are working from home, are at home. We see that there's a change in consumer behavior on how they consume media, and we're fully in tune with all the changes and adapting our media mix modeling and our media strategy accordingly.
Thank you, André. A question from Shaun Cousins, directed towards ANZ, in relation to the comment that unit economics and franchisee engagement have improved and will be a key focus to fortress our market. The question is, how are unit economics improving? Is it more franchisee support, or is it other cost savings, or is it operating leverage? And at the same time, Grant Saligari has asked, relating to the same thing, are franchisee subsidies discussed in the April update reducing?
Yes. Thanks, Nathan. And good question. I think Don already covered off in regards to subsidies, but just to reiterate that we're broadly back to business as usual and definitely will be by the end of this month. So with the exception of a few CBD stores and stores that are dependent on tourists and the like, our stores are seeing some good uplift in sales, and that leverage is driving unit economics at a store level.
Thank you for that, Nick. A few people ask a various format of the question in terms of will franchisees be as willing, or will they have the capability in terms of access to capital and profitability to be opening new stores? And will Domino's be expecting to provide any more incentives or subsidizing to encourage new store openings?
Yeah. So as you've heard from all the CEOs, there is a growing appetite and that franchisees can see the opportunities that our platform is providing. So we do see that interest, and you'll see that in our store counts in June and July and August as we report. From the banking environment, it's still too early to say. Most of this was already in play, so it's already approved and is continuing. And so we keep an open mind about what might happen and does DPE need to lend more money to franchisees? That's something that the board would have to consider at that time. But at this very moment in time, it's not required, and it's business as usual, as you've heard, that we're trying to, with the exception of summer being a little more unique in the northern hemisphere this time around.
Another question from Joe Little in terms of costs for new stores. The question is specifically in relation to corporate stores, but perhaps more broadly, what the outlook is in terms of rents for stores.
Yeah. So once again, that's a little early, but we do take the view that we're seeing a lot more distressed retail around us, and we have seen some landlords come to the party to look at new leases when we're looking at new stores that are lower than we would have experienced previously. It is fair to say that in some markets like Australia, that trend was already happening coming into COVID-19. It's just sped up. So we were already in Australia, a little bit different in Europe. We were already seeing rents come down for the sort of sites that we had, so that's just sped up a little bit more. But it is our expectation. With the amount of distress in the centers that we're in right now, that we would expect that, but it's still too early to say how long that lasts.
I mean, if there's a snap, things may change. So we keep an open mind, and we're only speculating beyond where we are now.
Two related questions from Ben Gilbert. Can you please give us some color around the level of new customers versus uplift in frequency of orders through COVID-19, and how do you think about monetizing/capitalizing on the new customer usage throughout the period? Ben's also noted that some of our competitors have put up prices during COVID. Have you not done this in the interest of focusing on customers, communities, franchisees first?
So I'm going to hand over to Josh because we talked about Japan having the most significance. So whilst all the business reflects new customers, Japan has the highest number. But before I answer that, one of the communications we've been consistent with as a system is not to put up prices because we didn't need to. We had enough savings in the business. We had the privilege to be open, and we were very aware of the media looking at pricing, and it would have been quite disgusting if we took pricing when people were suffering and we had the privilege to trade. Of course, we're a large network, and our individual franchisees do control their pricing.
So there may have been the odd case, or there may have been a market that shifted something, but by and large, I'm pretty proud that we've been able to hold pricing and stay great value. I'll hand over to Josh to talk more about the new customers as an example for our group.
Yeah, and just on your point before, Don, I mean, the other thing is that, well, I think for us, new customers, we've got an influx of new customers to our business Carryout, there's certainly been with all the restaurants shut, people needed a place to eat, so they certainly did start flocking and looking for trusted brands, so we've seen both. We've seen this influx of customers, people that we'd never seen before, and then we saw frequency. And probably more than that, we actually saw an increase in a thing that we track, which is recency, and that is the time between orders. And that's a very important metric for us as we look to see how quick people return to our brand and gives us a leading indicator on whether they like the experience they did.
All those numbers marry up with NPS scores in which we, as I mentioned, were some of the highest, and some of our service scores, which were some of the lowest, which is a good thing for our business. I'm pretty sure largely that's how it was in Japan and pretty similar across the other markets.
Yeah. And I think one of the most important things for us is that as we've been building our digital network over the last 12, 15 years, is that that first buying experience on a digital platform is the most important for us because it takes the longest. But once somebody has likely tokenized, in other words, they've put their financial details, they might use PayPal, or they might get familiar with their credit cards. We don't hold credit card details, but they get tokenized into the system, and they get all of their own personal address and so on and their telephone numbers. Then they've done a large piece of the work, and they've now got more familiar with our own experiences that they have a high likelihood of returning once you've done that first step.
So we've got, across the system, a big increase in new customers, and therefore we've got all that tokenization that's taking place, and now we can also communicate one-on-one with those customers going forward.
Question from Ross Curran. In New Zealand and France, post the reopening of stores, has consumption returned to normal levels, or is it still rebuilding?
Nick, you can talk on New Zealand and then André on France.
Yeah. So in New Zealand, with the exception of international travel, we're almost fully unlocked. So they've done an exceptional job of that over there. So seeing very much a return to normal in a lot of senses. And yeah, it's been fairly similar to how before.
André on France.
Yeah. On France, initially, we saw the same way what happened in Alsace. When we reopened, we had high delivery sales and lowered pickup sales than before. What we're seeing since is that the high delivery sales remain, and the pickup sales are slowly coming back as people trust themselves to go out there and pick up pizzas. And that's why we have those specific pickup deals out there to entice people to come and pick up. And so far, the delivery sales have held up pretty good. So it's sort of the same as the stores that hadn't closed, just slower.
Two related questions on technology. Has the Pizza Checker technology helped ease customer fears in Australia and New Zealand around food quality prep and hygiene? And then a follow-on question to that, do we expect further rollouts of technology such as the Pizza Checker technology or other technology in the near term to cement the competitive position of Domino's in other countries outside of ANZ?
So in Australia and New Zealand, the strength of being able to see your product as it exits the oven, not only from a quality control point of view but a food safety point of view, in my opinion, has definitely benefited. And one of the things that I can look to is the NPS scores that we're seeing from our customers are at all-time highs. And I think that in part, it's due to all of the extra steps, but this being one of them that we're able to take to assure them of their safety.
And the answer is yes, we are investing in continuing on the operational technologies, what we call these Co-pilots. Pizza Checker specifically is quite an intense rollout, and there's still so many other low-hanging fruit in some of the less developed nations to go to other technologies before Pizza Checker.
Two questions from Grant Saligari. Firstly, just confirming that all stores are back open and trading now. And the second is, to what extent are mobility restrictions impacting the cost of goods? This has been an issue for other products in Europe in particular. And if so, how are franchisees dealing with these higher costs?
So all stores are trading, and I'll hand over to John to talk about our products.
Thanks, Don. Look, great question. Mobility in Europe hasn't impacted us, as I said in my presentation. Our suppliers and our logistics partners have operated all the way through, so we've had no supply issues into our stores.
Thank you. From Michael Simotas, regarding the comment about improving ANZ unit economics, over what timeframe is this? Is franchisee profitability higher now than the same time last year?
Over to you, Nick.
Yeah. So I've talked to this before, I think, but just to reiterate that with the exception of a few segments like CBDs and tourist stores, our stores are seeing some good leverage coming through from the increased volume right now, especially in delivery, and that's flowing through to unit economics.
Nick, two related questions in terms of Operations 360 and corporate stores. Can you give an update on Operations 360? Has it been on hold during COVID, or is it largely complete? And a related question, it was noted at the half year that there were 118 corporate stores. The questioner was asking in terms of current numbers, which I can advise we don't provide a current number, but what is the strategy to divest these stores over the coming financial year 2021?
Yep. So Operations 360 is still very much a focus of ours, and lifting the ability and capability of our franchisees will be something that we continue to focus on for the long term. In terms of that impacting on corporate store numbers, as I've mentioned, our reduction plan there was paused. We're now back to business as usual and still working through our current plan, but the strategy hasn't changed there.
Yeah. I think it's important to note Operations 360 is a strategy that goes on forever. It's a performance. It's for franchisees to benchmark themselves in each country. So the introduction created an increase in our corporate stores in Australia, but it's an ongoing strategy. It's not something that was just only for a moment in time.
Question from Andrew McLennan, directed to John. How do you assess Domino's supply chain from a competitive perspective, and how are you looking to reinforce the advantages of the Domino's model over the next few years of strong growth in Europe?
Yeah. Thanks, Andrew. I think we have the advantage that, as I said, we run multiple routes to markets, so in all our markets. So it's the ultimate comparison to ensure competitiveness. So we're constantly looking at that, and that is a continuous process. And then we have the advantage of being part of the greater Domino's global network, whether it be America, the U.K., China. We're all operating in similar environments and sharing information to ensure we're all competitive. So we're agnostic on how we choose our route to market. It's the best fit, and we're constantly looking at it. In terms of Europe, and I think André touched on it, we're investing heavily in that new facility in the Netherlands as a great example of how we are embedding all our competitive elements in our supply chain to ensure we're built for growth in Europe.
A couple of questions regarding aggregators. How has your relationship with aggregators changed during this time, and how have sales performed on aggregator platforms versus the Domino's website?
There's no change in the relationship with aggregators, but our aggregator expert is André ten Wolde, so I'll hand over to André.
Yeah. We still have a really good relationship with our aggregators, and we stay close to them. What we've seen in countries where we have to close stores is that after we opened, we had a larger share of aggregator sales because that's where customers flock to and understanding who delivers in their market. But we've seen that slowly going back to the shares that we were used to. Now we're back marketing. And all in all, we haven't seen a lot of change in other markets on our aggregator share.
Yeah. I think it's important to note that whether it's an aggregator, whether we get through Facebook or through Google order or through TV or through print, from our point of view, we're accessing all those sort of different ways to get our customers because we built our model that way that only Domino's delivers Domino's regardless of where the source comes from.
A question from Nirasha. Has the disruption created more potential opportunities for geographic expansion, and how has your appetite for this and conversations with DPZ evolved?
Yeah. As always, it's not appropriate to say who we're talking with and so on. I don't think the strategy has really changed, be it in this moment. We've been all hands on deck for the core and focus of the business in that early phase, shifting now to trying to lift the growth with even more locations with markets that we have. But yeah, there are countries we'll keep an open mind to and that we want to work with. But in these last three months, we've been very much selfishly focusing on the business for the health initially and now for the growth of the existing business.
A question from Shaun Cousins in terms of the profit on sale of stores. Will the latest store openings in Europe and the later refranchising in ANZ reduce fees for this half and the next half?
Reduce for this half, but not potentially the next half.
Straightforward answer there. In terms of France, two questions. Firstly, a comment from Graham Rhodes saying, well done, everyone. I'm making it through so well. Graham notes that we've spoken already about the capital access, but Graham would like some commentary on the enthusiasm level from franchisees, both in France and elsewhere, for opening new stores. And also in terms of France, is the share of delivered pizza expected to increase due to greater trial that's occurring, and is summer a way to drive increased sales? So two parts there.
Over to you, André.
Yeah. So on the first part, and I've said this before, I think franchisees are even more excited about our strategy and fortressing the market because they've seen that what maybe was a concept to them through the age of delivery, that they see that is actually happening. Delivery is our biggest growth at the moment. And during times like this, people are really happy with having their food delivered to their home. And they see the unit economics hold up, or with increased sales, even get better. And then the share of delivered, yeah, we expect the share of delivery to go up, but we also see that there's higher unemployment in a lot of markets, so there's more quest for value. And it's no secret that value is more in pickup.
If you pick up your pizza yourself, it is cheaper for you, and you can feed your family cheaper when you pick it up yourself, so we also think that the pickup part will grow, and both of them are profitable parts of our businesses, so we're pretty agnostic on where that happens, but in general, over the next 10 years, we see delivery as the biggest growth market.
A question from Ben Goldsmith. In terms of what percentage of independent or chained restaurants in our markets do we expect will close due to COVID? And also our average delivery time, has that been changing during COVID?
Sorry, the first part of the question, Nathan, I missed it.
The first part of the question was, what percentage of independent or chain restaurants in our markets do we expect will close due to COVID?
Yeah. Look, it'd be too early to speculate on that. There have been closures for small businesses, which is really unfortunate. As far as the second part of the question, sorry, I was.
The average delivery time, has that changed?
Oh, the average delivery time, yeah, it did change. There were times there where the peaks were just extraordinary. Stores were seeing delivery counts they've never seen in their lives. So it took a little bit of an adjustment. Additionally, with physical distancing or social distancing, that you can have only so many people in the kitchen, so we had to sometimes, in some cases, move the foyers, think about serving customers for carry-out outside the store. So there was a lot of shifting around, so that did have an impact on delivery times for moments. But as you've heard from Josh, I'm really proud that because we've also been able to access a lot more drivers, I mean, we've been hiring across the globe.
We've had great access to a lot of new talent that we weren't able to access both from a head office point of view but also from a team member point of view, and we're very fortunate that some of our markets were struggling. We highlighted that in Japan. That was one of the biggest things that was a challenge to open even more stores. That's been removed for unfortunate reasons, but from our point of view as a business, that's enabled us to now improve our delivery time. Yeah, we're really proud of some of the delivery times we're currently achieving that in some of our countries are the best that we've ever achieved.
A question from Nicholas Gonçalves. Related questions regarding the management of food inflation risk. Can you talk about how the cost of food inputs has been trending over the last few months, and generally, how would the corporate manage higher inflation environment? Would it pass this inflation on to franchisees or bear the incremental cost at the corporate level?
John, I'll get you to answer the first part of that question.
Yeah. I think in terms of pricing, I mean, commodities obviously move all the time, and they've been somewhat highly volatile through COVID, but we've managed to hold our pricing through the last few months, and if we look forward, certainly in the short term, we're expecting actually a decrease on dairy and mozzarella and relatively flat pricing through our protein, so at the moment, we're not expecting any large variations in our food costs.
And so typically, if we have, as a corporate, ever taken on any of the inflation, it's only been when it's just been that dramatic in a short window of time. So that's our history that we've talked about in the last couple of years. And so based on what John's forecasting, then that's not expected to happen in the next 12 months.
A question from Craig Woolford. In the most recent update, Domino's noted that its medium-term outlook was unchanged, yet DPZ withdrew its two to three outlook for the business. Can you clarify why there's a difference in view about the outlook?
Yeah. Look, we can't comment on DPZ. That wouldn't be fair because we're not walking in their shoes. But what we can say is that we have the insights to how our markets are operating. And based on everything we know now, and we still always got a good disclaimer, we are, and I think everybody appreciates that we're not out of COVID, that we're still in a pandemic. But for everything we know now and looking at our same-store sales, our expectations of those same-store sales with the programs we've got coming, which we're quite confident in, and we look at our store openings that we've got in the pipeline, then we still expect our two-year to three-year outlook to look the same.
With always that disclaimer that we're still in a pandemic, could there be another pause on store openings if there was a second wave in one of our markets? I would assume shareholders would understand that that's the only sort of disclaimer we have out there. But otherwise, you've heard from all the CEOs tonight. It's buy more media, be bold and creative, go after the opportunity that we have now, and open as many stores as you effectively can.
Relating to same-store sales, how will Domino's report same-store sales? Will stores that were closed due to COVID-19 restrictions be removed from these growth measurements?
Yes. So our sales have always had a store closure removed from the same-store sales measure. It's not a same-store sale for that store. So that will be the same. What we want to make sure really clear for our shareholders when we report is we won't be normalizing, but we'll be breaking out as many of the positives we got from COVID-19 because we have to roll those in the year to come. And we'll also highlight as many of the negatives that we can share so that as a shareholder, you can see the wins we got and the potential costs that we bore as a business, not to normalize our results. Our results will be our results when it comes to COVID.
But at least an analyst or a shareholder will have as much information as we have as we now move into this next 12 months, where there still is some uncertainty as customers are moving in and out of these various lockdowns, some with comparables. State of Origin this year will be in November. Major sporting fixtures are moved around, so those things will be ebbs and flows, and they will have their positive or challenges. We'll make sure as best we can to do as clear a disclosure because I think that's the best thing we can do for shareholders. I want to make it clear so there's no confusion. That won't be normalizing. Our results will be our results and as clean as they can be to illustrate that.
Question from Joe Little. Where is the new mobile app development up to?
Yes, Joe. That's a really good question. We actually paused the new app for two reasons. One is that our conversion rate of our current product is going so well, so don't go out there and spend money to replace something when it's actually continuing to momentum forward across the board, so conversion rates have been really strong, but we also wanted to shift the bigger reason that was second to that was that we wanted to make sure we could put that capital into specific projects around COVID-19. There was specific technology. There's new products that we've already launched in market and we're about to launch in market for technology that might be operational execution or could be consumer benefit, and we moved the money spent into that and delayed the app, so that money's not wasted. It's just put on hold.
At another point, we'll revive that app. But it really just, why would you do that when things are booming, more stability, and spend that money on things that you need to bring to market and should bring to market for a competitive advantage right now?
Coming to the last couple of questions. Can you make a comment on Germany and franchisee engagement?
Andr é .
I can definitely make a comment. I'm not sure what the background of the question is. Franchisee engagement is amazing. We've clearly shown to franchisees that by going on TV for the first time at the end of the last calendar year, we are the big brand there, and TV is really helping them grow their sales. We're seeing the Hallo Pizza stores increasing in sales and really seeing that being part of a professional business during a crisis as COVID is really helping them and pushing them forward. Lots of the concerns they might have had while entering Domino's, where it's all stricter and we had to let go of some of the food categories that they were also thinking they needed to stay in business, those concerns have definitely gone. I think we have really good franchisee engagement in the German market.
André, how do you see competition in the labor market, especially for drivers comparing to aggregators?
Oh, during COVID, obviously, we've been really happy to be able to retain more drivers, which we needed for the increased delivery sales. I haven't seen a competition around getting drivers ramp up in any of our markets in Europe caused by aggregators. We are quite competitive in the way we work. Our drivers are on the payroll. They're not considered to be independents and paid per delivery. So they're part of a team. And we see that that gives us a competitive advantage against the aggregators, where some students might think that it's better to be their own boss. But lots of young kids see the advantage of being part of a business and being secure and having all the social benefits of being part of a business.
Not in any market, to think about it, we've seen that aggregators are actually stealing our staff or making it hard for us to get staff.
Thank you, André. As we close to the end of the time, I've got one more question, which I think has probably been answered, but it's probably an opportunity for just a more general commentary on the business at the moment. Question from Shannelle Hume. Through COVID, has the increase in delivery sales largely offset the decline in carryout?
Yeah. It's varied by market. There were times in the early stages there were certain markets where we weren't getting enough carry-out sorry, enough delivery to replace the carry-out, but we keep referring back to those slides I showed with the Financial Times of the variation of lockdown, that as we came out of lockdown and carry-out rose, delivery was significant. We really haven't seen a decline in carry-outs coming back up, and that's one of the benefits that Japan really experiences. It just had such strong carry-out and delivery growth, where we now are seeing markets that are starting to edge on that positiveness of carry-out, and they've still got the delivery, so that's been a benefit of the group, but when you're starting to look back over three months, there were really the ebbs and flows of all these different lockdowns.
There were moments when we didn't replace with enough delivery over the carry-out. It is also worth noting that we experienced a high ticket average through this. There were times when we were still experiencing strong sales, but we may have still been in a deficit in customer count from a lack of carry-out because our basket sizes were so high that it was compensating for that. You had these sort of ebbs and flows. Interestingly, basket sizes stayed high. We were expecting that to maybe reduce a little more as we came out of lockdown and carry-out were increasing. Even the carry-out basket size has been high. We speculate the customers, when they go out for that one, whether it's a delivery or carry-out, they're doing less experiences and getting more in their basket.
But we've had some really fun campaigns, if you haven't seen them, for the love of leftovers, which are Japan-inspired for our group. And then we've done some great work with that all over the business because we could only speculate how could a house be taking so many pizzas? And so it must have been for the love of leftovers the next day and it's all the fun ways you can revive a pizza on day two.
Sorry, I'm live. There's one more question that came through the chat, not the Q&A. But a question for Josh on Japan. How widespread or concentrated has the strong performance been across the network?
So this sort of relates to what Don said for all the different markets. Japan's made up of a number of different prefectures, and it's driven by the individual prefectural government. And what we saw was some prefectures closed down earlier than others and others opened up earlier to varying degree. What I can say is that the majority of our stores are Osaka and Tokyo, and we saw lockdown in those two markets longer than the other markets, which are smaller markets for us. It's hard to give a definitive answer on that because it was varied across our subset of stores, but our major areas were fine. We're actually in lockdown longer.
Okay, and we've gone through all of the questions. Time is now finished. Thank you, all of those who attended. It was a very high level of attendance and engagement this evening, and I thank all of our speakers as well for giving up your time tonight and this morning for those in Europe, so thank you. We'll draw this to a close, and the recording will be available on our website. Thank you all.
Thanks, everybody. We'll see you in August.