Domino’s has reported what it described a "solid" performance in its third quarter, as its system sales increased by 2.1% to £382.7m.

In the 13 weeks to 28 September, the takeaway pizza chain’s like-for-like system sales growth increased by 1% year-on-year.

Its total orders dropped by 1.5% in this period, while its number of deliveries fell by 3.4% as a result of weaker consumer sentiment.

However, its number of collection orders increased by 1.7%, reflecting some continued benefit on its national collection campaign.

Domino’s said that trading throughout the period was in line with its expectations, which reflected a weaker market and customers’ lower discretionary income.

As a result, it stated that it has to tactically increase price alongside targeted value deal, in order to partially mitigate higher wages and employee taxation.

Chief executive officer at Domino’s, Andrew Rennie, said: "We have delivered a solid Q3 performance with positive sales and operational momentum despite the continued challenging consumer backdrop. In particular I am really pleased with the initial results from the introduction of our exciting Chick'N'Dip brand.

"Our franchisees continue to lead the industry with fast delivery times and we continue to work with them to mitigate the impact of increasing costs and any potential impact of the UK budget on 26th November."

Looking ahead, Domino’s reiterated its guidance for the full year, with its underlying EBITDA set to reach between £130m and £140m.

Its store opening expectations also remain unchanged in the mid-twenties, with 18 new stores opened in the year to date.

Head of markets at AJ Bell, Dan Coatsworth, said: "Domino’s may have delivered a solid outcome in the third quarter but the main takeaway for the market is that the backdrop is looking dicey.

"This was reflected in a drop in order volumes for the period, partly as franchisees reacted to higher costs by pushing through higher prices.

"A measure of reassurance was delivered as Domino’s stuck with its full-year guidance and the recent problems at competitor Pizza Hut may enable it to improve its competitive position."

---