As the restaurant industry aims to attract modest consumers with discounts and deals, Domino’s pizza We believe we can steal diners from our competitors.
“I think industry headwinds are actually tail winds for us. Of course they’re headwinds, but we’re going to get them. [market] We will share it during this period,” CEO Russell Weiner told CNBC on Monday.
Domino’s reported on Monday that the same store had a sales growth rate of 3.4% in the second quarter in the US, with StreetAccount estimates up 2%. The chain’s first plush pizza, introduced in March, promoted sales, as did the deals offered by Domino. Executives said Domino increased sales across all income cohorts, including low-income clients, hitting industry trends.
“We can lean on value on what people want value,” Weiner said, naming Domino’s $9.99 “Historical” promotion as an example.
“The reason it’s the best deal ever is because no one else is giving you a deal on something you don’t want, something that might be your second option,” he added.
Fast food restaurant, from McDonald’s In Yum Brands ‘ KFC has been promoting value menus and combo meals for over a year to combat slow traffic. Fast food chains usually see consumers swap cheap meals in times of economic hardship, but diners facing years of high inflation have opted to eat at home.
We can’t look for more than Chile’s recent success, which has recorded double-digit sales growth for the same store in the last four quarters. After investing in the management and menu, Chile promoted the food by comparing its prices with those of its fast food rivals. For a few more dollars, customers can get a complete dining experience.
Weiner said he sees him as parallel to Domino’s business.
“It’s systematic,” he said. “This will stay until people’s wages go above prices. So I think it’s the reason you’re looking at what you’re looking at Chilean, and that’s why you see the positives you’re looking at Dominoes.”
Still, Domino’s has its challenges. If the price is too high for Domino delivery customers, they will eat at home instead.
“We lose the opportunity to eat at home, not at competition,” Weiner said.
The pizza chain’s revenues have been hurt by a $27.4 million bill from investments in Chinese licensees, missing Wall Street’s expectations. According to LSEG’s consensus estimates, the company posted a profit of $3.81 per share compared to $3.95. Revenue met Wall Street’s estimated $150 million.
The company’s shares fell more than 2% in Monday afternoon trading.
Domino’s rivals are not expected to share their second quarter results for another few weeks. Pizza Hut owner Yum brand will not report revenue until August 5th. Papa Johns August 7th.
