Don Meij is renown for his leadership of Domino’s Pizza. He even has his own website (www.donmeij.com), which tracks his journey from a pizza delivery guy for Silvio’s Dial-a-Pizza in 1987, to general manager in 1993 when Silvio’s purchased Domino’s in Australia. Don then became a Domino’s franchisee with 17 stores in 1996, which he sold into Domino’s in 2001 to become chief operating officer and then chief executive officer in 2002. He went on to steer the company through its IPO in 2005.
Don says his desire to manage and lead come from having such a strong believe in the business.
“We were a market leader [in Queensland],” he says.
[I thought] why can’t we become number one and, of course, that’s what we achieved.”
Don says that having a very good understanding of who your customer is and who they could be, has been key to the company’s success.
“For example, in 2007 the biggest rejecters of our brand were women with children, and young women,” he says.
But fast-forward almost a decade and those customer segments have been some of the fastest growing for the company.
“That’s come about through thinking through what our customers need. Customers don’t know what they need if it doesn’t exist yet.”
Domino’s has also been at the forefront of big data and technology developments. Last year it launched Pizza Mogul, an App and website, which allows customers to develop their own pizza and then earn profits based on how many people buy that pizza. As of 11 February 2015, it had 55,000 Moguls registered and 160,000 pizzas added to the menu.
“I think we’re better than most at it but I definitely don’t think we’re anywhere where we should be with big data.”
“I think we look a lot better than we actually are,” he admits.
The company is about to hire its first data scientist and better use of big data will be a focus this year.
“A lot of large businesses pretend to be in these space and talk the language and in our belief, that’s worse. You’ve really got to be [in it].”
Don describes his management style as very energetic.
“I’ve got a lot of energy and I’m always restless and I’m very impatient,” he says.
“On the other side, our results speak for themselves and I do empower.”
He believes it is important to inspire people and really push employees to be the best that they can be.
He is also very loyal and acknowledges the many “amazing” people within the business including, but not limited to: Andrew Rennie, CEO Europe; Scott Oelkers, president and CEO Japan; Nick Knight, Australia and New Zealand operations manager and Allan Collins chief marketing officer Australia and New Zealand.
“These are very talented people and they make me look very good,” he says.
Staff turnover at the pizza store level is high, but continues to drop and is much better at the managerial level.
“I think we pay very well at Domino’s,” he says.
The company’s main competitive advantage is its ability to not just come up with the big ideas but also the ability to execute them.
“We’re good at the big ideas but were also good at delivering the big ideas,” Don says..
Other competitors in the Domino’s Pizza space are big fast food brands, along with supermarkets and smaller sandwich shops.
“Home cooking has increased. Our current competitors are now the supermarket businesses.”
But fortunately for Domino’s, the “new economy” continues to win over the “old economy”.
Don’s main short-term priority is on delivering the company’s products, although he does not rule out an acquisition in the fast food space.
“We may step into another business in the next few years,” he says.
For now, the intensity is around the products and the staff who deliver those products.
But Don stresses that those products aren’t the pizza but the technology.
“There is so much opportunity and our limiting factor is the ability to execute.”
Domino’s has a strict schedule of upcoming launches, almost on a monthly basis over the next 12 months, in the very aggressive technology space where Don says patents are just waiting to be stolen.
“It’s a very competitive space where ideas that are created today can be worth a lot of money very fast.”
Don says he was “really proud” to recently announce half year net profit after tax (NPAT) of $29.1 million, an increase of 44.2% on the prior corresponding period last year.
He owns 1.84 million shares, or just over 2% of the company, and also has 1.1 million options coming due in the next 12 months.
“My intention is to accumulate,” he says.
Don also recently upgraded full-year NPAT growth guidance to 32.5% (compared to FY14 underlying) from 25% announced in October.
The risks to this are “management execution” and “the things we can’t see”, but overall he says they are feeling pretty comfortable.
The company also declared an interim dividend of 24.6 cents per share fully franked, up 39.0% on the prior comparative period. The dividend strategy is a payout ratio of 70%, which is reviewed on a half-yearly timetable.
For the company’s shareholders, Don has this final message:
“People are going to eat. I will never give shareholders excuses because in the end…people eat breakfast, lunch or dinner.”
“There is so much lunch and dinner to go after. If we fail, it’s because we have failed to execute.”