Domino’s Pizza (DPZ) is pulling out all of the stops to significantly reverse a startling trend in its stores.
Over the past year, the pizza chain has noticed a gradual weakening in sales at its U.S. locations. In Domino’s fourth-quarter earnings report for 2024, it revealed that its U.S. same-store sales only increased by a minor 0.4%, missing analyst expectations of a 1.63% increase.
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During an earnings call on Feb. 24, Domino’s Pizza CEO Russell Weiner said that the company has noticed more of its low-income customers in the U.S. are avoiding delivery and are choosing to eat at home due to recent “macro and competitive pressures.” Overall, Domino’s faced a 1.4% decrease in deliveries during the fourth quarter.
Related: Domino’s Pizza sounds alarm on concerning customer behavior
“Delivery is a tougher value right now in this value-conscious world,” said Weiner. “And so, the choice isn’t going to another restaurant. Most of the time, it’s eating at home.”
Domino’s makes a competitive move to attract back customers
Amid this concerning shift in customer behavior, Domino’s has decided to make a major addition to its menu to attract more customers, keeping them away from its competitors.
The pizza chain has announced that it has added a Parmesan Stuffed Crust pizza to its menu, a bold move that directly competes with Pizza Hut’s Original Stuffed Crust pizza, which was launched in 1995. Papa Johns, Little Caesars and Cicis Pizza also have their own versions of stuffed crust pizza.
A worker boxes a pizza at a Domino’s restaurant in Trenton, Michigan, US, on Wednesday, April, 10, 2024.
This is the first time Domino’s has ever launched a stuffed crust pizza, and its version is made with dough that is “buttery-flavored” and mozzarella cheese that’s “sprinkled with parmesan,” according to a new press release.
Customers can purchase a one-topping Parmesan Stuffed Crust Pizzas for $9.99 each through Domino’s Carryout Deal.
“One of the most common questions we’re asked is, ‘When will you launch stuffed crust?'” said Domino’s Chief Marketing Officer Kate Trumbull in the press release. “We’re excited to announce that our first-ever stuffed crust is finally here and we promise, it is worth the wait.”
Domino’s Pizza faces major threat as customers change their tune
The move from Domino’s comes after Pizza Hut recently saw a 2% year-over-year increase in same store sales in the U.S., according to Yum Brands’ fourth-quarter earnings report for 2024.
The increase in sales comes during a time when Pizza Hut is running its $7 Deal Lover’s Menu, where customers can choose two or more items on the menu “for just $7 each.”
Papa Johns, another main competitor of Domino’s, however, saw a roughly 4% year-over-year decrease in comparable sales in the U.S. during the fourth quarter as it also suffered from a dip in deliveries.
Related: Papa Johns suffers unexpected loss as customers switch gears
“The environment is very much value focused at the moment and customers are much more deliberate on managing their overall ticket,” said Papa Johns CEO Todd Penegor during an earnings call on Feb. 27. “And we do expect the pizza category to be flattish to slightly down.”
According to a recent survey from LendingTree, 78% of Americans view fast-food as a luxury since it has increasingly become more expensive. Even 62% of Americans said that they’re eating less fast-food due to rising prices, and 56% said that they choose to make food at home when they want an easy and cheap meal.
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As price-conscious consumers continue to avoid fast food amid their battle with inflation and higher costs of living, major fast-food chains have been rolling out deals in order to win them back.
For example, Domino’s launched its Emergency Pizza program in October that offered its Rewards customers a free medium, two-topping pizza when they placed a qualifying online order. The program lasted until Jan. 19.
McDonald’s also recently rolled out deals such as its $5 Meal Deal and its brand-new “Buy One, Add One for $1” deal to try to reverse declining sales.
Starbucks, which also reported shrinking sales during the fourth quarter of 2024, even paused price increases for menu items.
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