Domino’s Pizza plans more menu innovations, like New York-style pizza. | Photo courtesy of Domino’s Pizza
Domino’s was struggling before 2008: sales were sluggish, its stock price was trading in the low single digits, and it was often mentioned as a candidate for bankruptcy filing.
The Ann Arbor, Michigan-based pizza chain famously revamped its pizza recipe, admitted in advertising that the old one was terrible, and set off a comeback that lasted more than a decade.
Now the brand is doing it again. Well, sort of.
Domino’s isn’t planning on changing its pizza recipe this time around, but it does want to promote the quality of its pizzas more frequently than ever before.
“The difference between now and 2008 is that in 2008 we didn’t have the tastiest food,” CEO Russell Weiner told analysts this week, according to a transcript from financial services site AlphaSense. “Today we have the tastiest food, but people don’t think of us by that. So we need to change that.”
Weiner is a longtime Domino’s Pizza veteran who was involved in the marketing campaign that sparked the brand’s revival.
The shift was more complicated than just changing the pizza recipe: The company implemented a single point-of-sale system to ensure franchisees could make a profit, then invested heavily in technology, selling that technology and promoting the ease of ordering.
The result: The chain has surpassed Pizza Hut to become the world’s largest pizza chain, a feat that also includes more than a decade of continuous same-store sales growth.
“It’s been a crazy journey, a wild journey,” Weiner said.
But the past two-plus years, in his words, “weren’t Domino’s years for me,” as the brand’s same-store sales declined for much of that time, and the company lost important sales to third-party delivery companies and major competitors.
But the company’s sales have been improving recently, thanks to the kind of marketing that made the chain successful last time.
Domino’s “emergency pizza” promotion last year helped drive strong sales growth that will continue into 2024. It was essentially a buy-one-get-one-free promotion, and customers could only redeem the free pizza at a later date, driving more traffic to stores. “The emergency pizza has performed better than any buy-one-get-one-free promotion I’ve ever run,” Weiner said in April.
Its first-quarter results were particularly impressive. Same-store sales rose 5.6 percent during the period. Papa John’s saw same-store sales fall 2 percent, despite a new advertising campaign. Pizza Hut saw its sales fall 4.6 percent. Rival chains typically rise and fall together, but the first-quarter results show that Domino’s has gained market share.
Weiner believes the company can gain more market share by promoting its product. “We’re not changing anything,” he says. “And I’m not going to change the product, frankly. The product is still great. It’s a great product. But we could romanticize it a bit more.”
How will the company do that? Weiner said it plans to launch a new website next year, for example, which will then feature more in the company’s advertising.
“This is us saying, ‘Hey, pizza tastes great, but what’s the point if people don’t know about it?'” Weiner says. “That’s the big difference. You don’t have to change your product, you just have to talk about it and present it differently.”
He’s also promising more innovation, a departure from his previous take on the chain’s marketing efforts: The company plans two new products a year.
“To be honest, I’ve never really been interested in product innovation because so much of what we sell is just pepperoni, cheese and sausage pizza,” he says. “Every time you launch something, the idea has to be great. So how many great ideas are there here? So as CMO, I’ve purposefully stayed away from new products.”
Instead, he says, the company innovated with consumer technology, but then “this study came back, and we looked at it and said, ‘Hey, you know what? We’re not innovating enough.’ So not only do we need to make our products look better, but we’ve now committed to two product innovations a year,” he says.
Domino’s already introduced its first innovation, New York-style pizza, to compete with rivals who already had a similar product on the market. Weiner said the item will remain on the menu because it targets a different customer who doesn’t like the chain’s traditional crust.
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Restaurant Business Editor-in-Chief Jonathan Mays is a longtime industry journalist who writes about restaurant finances, mergers and acquisitions, and the economics of the industry, with a particular focus on quick-service restaurants.
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