Domino’s Pizza (DPZ) has recently been struggling with a dip in sales as more consumers nationwide change their tune about fast food.
In Domino’s fourth-quarter earnings report for 2024, it revealed that its U.S. same-store sales only spiked by a small 0.4% year-over-year during the quarter, which fell short of analyst expectations of a 1.63% increase.
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During an earnings call last month, Domino’s Pizza CEO Russell Weiner flagged that the company specifically saw a 1.4% decline in deliveries, while its carryout business increased by 3.2%.
Related: Domino’s Pizza sounds alarm on concerning customer behavior
He said this is the result of more low-income customers in the U.S. avoiding delivery in an effort to save money.
“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.”
He also admitted that delivery is a “more expensive” option than carryout, but emphasized that Domino’s prices are competitive.
“Delivery is certainly more expensive,” said Weiner. “You got the fees, hopefully tips for our drivers. But still, when you look at delivery, we’re very competitive down to the delivery fee and the price, not only to other pizza, but really other items you get delivered.”
Domino’s unveils new plan to boost sales
Amid this decrease in deliveries, Domino’s appears to be ramping up its efforts to repair its struggling delivery business. The pizza chain announced that it has partnered with DoorDash to reach a wider range of customers on the app’s marketplace.
Domino’s will partner with DoorDash to revive its delivery business.
Image source: Shutterstock
Domino’s drivers will now be able to deliver orders that are 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 take place in May.
“The ablity to connect seamlessly with DoorDash customers means more sales for Domino’s stores, while efficiently leveraging our brand’s robust delivery network,” said Domino’s Pizza Chief Operating Officer Joe Jordan in a new press release.
This change will officially end the exclusivity DoorDash’s rival, UberEats, had with Domino’s, where the pizza chain’s drivers also delivered orders that were made through the app.
Domino’s isn’t the only pizza chain that’s struggling
The move from Domino’s comes during a time when its main competitors are also struggling with sales.
Related: Papa Johns suffers unexpected loss as customers switch gears
Pizza Hut revealed in its fourth-quarter earnings report for 2024 that it faced a 2% year-over-year decline in same-store sales in the U.S.
Papa Johns’ U.S. comparable sales also shrunk by roughly 4% year-over-year during the same quarter. The pizza chain even suffered from a decline in deliveries just like Domino’s.
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“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 a recent earnings call.
Over the past decade, fast-food prices across the nation have increased by almost 47%, and many consumers have had enough.
A recent survey from LendingTree found that 78% of Americans view fast food as a luxury since it has become increasingly more expensive. Also, 62% said they’re eating less fast food due to rising prices, while 56% said they choose to make food at home when they want an easy and cheap meal.
Amid this shift in customer behavior, Domino’s has been increasing efforts to win back customers. Last month, it announced the debut of Parmesan Stuffed Crust pizza, its first-ever stuffed-crust pizza, to compete with rivals.
Between March 17 and 23, Domino’s also offered customers who order menu-priced pizzas online 50% off of their order in honor of March Madness.
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