Domino’s is sure giving away a lot of pizzas these days. The company last week announced a plan to give away $1 million worth of two-topping pizzas to people repaying student loans. This came after it said it would give free pizzas to anybody who ordered through its digital channels between now and February.
“Domino’s has been launching a number of brand actions that are focused on giving our customers more,” Kate Trumbull, Domino’s chief brand officer, said in an email. “Doing the right thing and championing our customers are two of Domino’s core values, and you’ll continue to see us launch campaigns that show customers we have their backs.”
Domino’s is hardly the only brand that has been pulling out all the stops to get customers to come in. Marketing efforts have been on overdrive in recent months as companies look to generate sales.
Companies over the summer introduced a record number of limited-time offers. They’ve created value menus, brought in celebrities of all kinds and even turned a trademark registration fight into a months-long marketing effort.
“We’re definitely focused more on marketing initiatives now than we’ve had to be focused on in prior years,” Andy Wiederhorn, chairman of Fat Brands, told investors last week, according to a transcript on the financial services site AlphaSense.
The pandemic and its immediate aftermath kept people out of restaurants. When dine-in service returned, customers did, too. Restaurant sales were not difficult in 2021 and 2022, even as inflation led to generationally high price increases.
“It wasn’t hard to get people into restaurants,” Wiederhorn said.
But that “pent-up demand” that kept sales going during that period is mostly filled. And now those prices look awfully high. “We’ve had to spend more money and more time on marketing initiatives to drive brand awareness, remind people that our restaurants are open and that they should come in,” Wiederhorn said. He said same-store sales in the third quarter were “a little bit choppy” and dependent upon the brand, and the marketing behind it.
At Domino’s, sales have struggled the past couple of years as diners shifted away from pizza, either because they returned to regular restaurants or they opted for other options through third-party delivery. The chain also upgraded its loyalty program, a big reason for its “Emergency Pizza” giveaway for digital orders through February. But the efforts are clearly geared to get customers ordering its pizzas more often during a period of weakened sales.
To be sure, restaurant sales have been surprisingly resilient this year, at least according to federal government data. And there are at least some signs that consumers are shifting around some of their spending. High-end concepts that seemed to do no wrong in 2022 appear to be doing some wrong in 2023, for instance.
And marketing these days is more difficult than it had been in the past because many restaurant costs remain elevated.
While more brands are pushing value—like, say, by giving away pizzas—for the most part brands have been reticent to unleash the types of aggressive value offers they might have in the past. Operators have to be cognizant of profitability. Labor and food inflation remain too high to price burgers and chicken sandwiches too low.
That has brands turning to other solutions to generate sales. Loyalty programs have become almost vital, particularly in the fast-food world—which is where customers can currently find many of their value offers, for instance.
But they’re also putting their marketing teams to work. As a result, we get ideas like Taco Bell’s “Taco Tuesday” promotion that helped carry that brand for half the year. Or we get new chicken nuggets at KFC (and a test of them at Taco Bell of all places) while McDonald’s introduces new sauces and just about everybody taps into nostalgia.