Domino’s Pizza (DPZ) has had a rough start to the new year. The pizza chain appears to be suffering from waning consumer interest, as it recently faced an unexpected loss.
In the company’s first-quarter earnings report for 2025, it revealed that while its revenues increased by 2.5% year-over-year, its U.S. same-store sales declined by 0.5% during the quarter.
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The decrease in sales comes after Domino’s recently made several bold attempts to attract customers. In March, it added a Parmesan Stuffed Crust pizza to its menu. The pizza chain later ran a limited-time promotion that offered customers who ordered menu-priced pizzas online 50% off their order.
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Earlier this month, it even announced a partnership with DoorDash that allows Domino’s drivers to deliver orders submitted through the DoorDash app. While this change is already being piloted at select locations, the pizza chain’s official debut on DoorDash in the U.S. will happen in May.
A person delivers for Domino’s Pizza.
Image source: Shutterstock
Domino’s nails down sources of the problem
During an earnings call on April 28, Domino’s Pizza Chief Financial Officer Sandeep Reddy said that U.S. same-store sales fell due to lower in-store traffic.
The company also noticed that fewer customers are choosing to have their orders delivered and are instead opting for carryout, which usually carries lower-cost transactions.
“Our delivery business continues to be impacted by macro pressures that are impacting the low-income consumer,” said Reddy.
Reddy said this trend may be due to Domino’s loyalty program, which is growing in popularity. The program, which was revamped in 2023, allows customers to earn 10 points on every order of $5 or more, and they can redeem those points for menu items.
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“I think this new loyalty program is structured around the carryout customer, getting live users coming in and really those are going to be massive frequency builders for us as we go along,” said Reddy, “Literally last year, [we] grew by 2,500,000 active members in our loyalty database and we continue to see good traction from that.”
Domino’s Pizza CEO Russell Leener also acknowledged during the earnings call that U.S. fast-food consumers in general are tightening their spending amid uncertainties about the economy and the impact of tariffs.
“I think just in general, consumer disposable income is down, and their confidence levels, they are also down to kind of 2022 levels,” said Leener. “And so just in general, right now, there’s a headwind on the total business.”
He also said that the company recently saw a dip in lower-income customers, who are increasingly opting to make meals at home.
“How they’re (low-income customers) being affected is not really necessarily them leaving Domino’s to go to another brand or leaving Domino’s in general,” said Leener. “It just may be an occasion here or there. And what ends up happening … is they’ll just be eating at home.”
Domino’s unveils cautious outlook on future sales
Despite the recent dip in U.S. same-store sales, Domino’s predicts that they will increase by 3% this year, with sales being lower in the first half of the year, compared to the back half of the year, due to the timing of the company’s initiatives.
“In the event of macro pressures persist, it could put pressure on achieving this number,” said Reddy during the earnings call.
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Domino’s also expects its operating profit, the company’s profit after paying operating expenses, to grow by 8% this year.
Domino’s cautious outlook comes during a time when Americans are changing their tune about buying fast food after seeing prices skyrocket. According to a report from the Roosevelt Institute last year, fast-food prices have increased by roughly 47% over the past decade.
A recent survey from LendingTree found that 78% of Americans view fast food as a luxury since it has become increasingly 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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