Why Domino's Is No Longer The Favorite Pizza Of The Pandemic
We all know that what goes up must come down and that appears to be the case with Domino's pizza sales, according to Nation's Restaurant News. While the pandemic was devasting to many small businesses and the restaurant industry, it was surprisingly a boon for the pizza industry. According to The New York Times, pizza industry sales in 2020 were 4% higher than in 2019. Pizza was uniquely positioned to be a go-to choice for people because you can feed a family at a reasonable price and travels well given its long history of being delivered.
In 2020, pizza may have felt like comfort food that allowed many to hold on to some sense of normalcy during an unprecedented time. The top four large pizza chains Domino's, Pizza Hut, Papa John's, and Little Caesars, accounted for roughly 43% of the $44 billion industry before the pandemic (via The New York Times). Still, its market share increased as the industry brought in $46 billion in 2020, per Statista. Of all the large chains, Domino's reigned supreme with $4.36 billion in revenue for that year, but with things opening back up its reign may be coming to an end.
Changes in the restaurant industry
By September 2020, Domino's Pizza achieved a record-breaking third quarter, with same-store sales increasing 17.5%, according to the U.S. News & World Report. This was the best same-store sales since 2004 when the company began reporting its earnings. For a sharper contrast, in 2008, Domino's stock was selling for only $3, but during the pandemic, it skyrocketed to $385 a share (via The New York Times). In 2022, the company's first-quarter same-store sales did not meet expectations. They declined by 3.6%, per Nation's Restaurant News. This decline can be linked to our current labor shortages, supply chain issues, inflation, and global politics. As a result, Domino's had to implement price changes to combat their rising operating costs.
Russell Weiner, Domino's incoming CEO, is wasting little time trying to turn the tide in the company's favor. Domino's intends to go back to its regular store hours, hire more drivers, offer online discounts, and utilize its call center to ease store workers' time constraints (via Nation's Restaurant News). Russell Weiner anticipates a challenging 2022 but is optimistic that the brand will overcome as it has in the past. The success Domino's is currently experiencing in India and their international markets give good reason to never bet against the pizza chain.