By most measures, Domino’s had a tough quarter to start 2025, at least in the U.S. Same-store sales declined 0.5% in the U.S. as the company continues to bleed customers from its own delivery channels faster than it can gain customers elsewhere. It likely will spend much of the year pushing discounts to get them to order more. It reorganized its corporate structure, a move that led to the elimination of positions.
But it also introduced a new Parmesan Stuffed Crust Pizza that, in the words of CEO Russell Weiner, was “arguably the biggest new menu item in our history.”
The pizza was launched late in the quarter, not early enough to have much of an impact on first-quarter numbers. But it proves again that consumers today can be motivated by a fun new product, even if they’re spending much of their time cutting back on dining.
Executives believe the pizza will be “a market-share driver for years to come.”
In the pizza business, any new product that can get customers excited can indeed lead to major share shifts in a short period of time.
The sector is largely saturated, with generally little growth overall. Total sales by pizza chains on the Technomic Top 1,500 grew less than 1% last year, continuing a trend evident coming out of the pandemic.
Pizza chains that for years relied on delivery can no longer count on that as an easy source of customers, as third-party delivery takes more of that business. Domino’s had another such quarter. Its same-store sales increased 1% in the period for its carryout business. It declined 1.5% for its own delivery channels.
Domino’s said that its 0.5% decrease in same-store sales last quarter was nevertheless strong enough that it grew market share, another testament to the sector’s overall struggles. Those challenges have been exacerbated by a consumer that is cutting back on dining frequency and is choosy about those visits it does make.
“When we talk about these macro headwinds, it isn’t on Domino’s specifically,” Weiner said. “We think these are QSR headwinds. While [the first quarter] wasn’t what I’d hoped it would be, we still grew market share.”
The quarter included a restructuring that led to job cuts. Domino’s in March made a number of management changes, including a new chief operating officer. But executives revealed on Monday that the effort included a restructuring that led to the elimination of some positions “below the executive level.” The job eliminations cost the company $5 million in severance payments.
The goal, Weiner said, was to create a “faster, more efficient structure” in line with the company’s strategy.
Domino’s strategy to build sales in the market involves a bigger push on value. Weiner told analysts that the company is pushing more price-based promotions through its loyalty program, Domino’s Rewards, and through national promotions like “Best Deal Ever,” or any pizza for $9.99.
Weiner boasted that the company’s value offers get people talking, such as a buy-one, get-one offer called Emergency Pizza and a “carryout tips” promotion to drive more carryout customers. He promised more of that type of offer. “We don’t tell you the initiatives in advance,” Weiner said, “but they absolutely fit with the strategy. And that’s going to continue.”
Weiner believes the company is in a strong position to generate market share by competing for both high-end items like stuffed-crust pizza and on value offers. He referred to the company’s unit volumes, which are at least $200,000 higher per year than any of its closest competitors, which gives it a distinct advantage during a time like this.
“If folks are going to compete with us with less volume through what is a substantially similar outlet cost to keep up rent and all that kind of stuff, it’s going to be very, very difficult,” Weiner said.
That said, the other big strategy involves third-party order aggregators. Domino’s generated 3% of its sales last year through its first deal with such a company, Uber Eats. It plans to go national with another provider, the market leader DoorDash, next month. Domino’s expects the DoorDash deal to be “50% incremental.”
Interestingly, executives said they have limited ability to influence the behavior of customers who prefer to use one of the aggregators or the other.
“I don’t think the decision to go on a DoorDash or an Uber is going to be based on Domino’s,” Weiner said. “It’s going to be based on their loyalty to the platform. We’re going to do everything we can to bring them back to Domino’s. But if they want to buy us on DoorDash, that’s because of their natural behavior on that platform. And I don’t think there’s anything we can do here.”
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