Domino’s CEO Russell Weiner believes 2024’s pressured consumer spending and promotion-heavy QSR marketplace won’t be any different this year.
The answer is to grant customers what they want—more value.
The chain began the year with 50 percent off menu-priced pizzas. Since February 10, Domino’s has offered guests any crust, with any toppings, for $9.99 when they order online.
Much more is scheduled for 2025. One of the biggest offers on tap? The brand is reportedly rolling out stuffed crust pizza in the U.S. at some point.
“We’re the No. 1 pizza company in the world, and it’s one of the biggest crust types out there, and we don’t have it. We don’t have it in the states,” Weiner said during Domino’s Q4 earnings call. “We do have it in other markets.”
Third-party expansion will also play a major factor. In 2023, Domino’s formed an exclusive partnership with Uber Eats and reached its goal of 3 percent sales mix by the end of last year. The brand extended its exclusivity agreement until May 1, but in the meantime, it’s started negotiations with additional aggregator partners and will pilot with them in a small number of stores. The objective is to further penetrate the third-party delivery channel in 2025, with a “meaningful impact” expected in the back half of the year.
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Domino’s is still bullish on third party becoming an incremental $1 billion opportunity over time. Weiner said the aggregator marketplace is the fastest-growing segment within QSR pizza, and that the pizza giant is just getting started. It’s already learned important lessons from its work with Uber.
“I think what we’ve learned with Uber is a couple of things,” Weiner said. “One is how to optimize the marketing. So, one of the reasons I’ve talked about kind of the $1 billion maybe taking a little bit longer to get to is we’ve learned how to optimize incrementality. And so, we’re not going after all the volume right away. We want this to grow over time and be incremental and accretive to the profitability of our franchisees. So, we’ve learned how to do marketing better, I think, on this platform. And then, just technology integration, I would expect that if we were to go on another platform that the tech integration would be quicker than it was when we were doing it from scratch.”
Also, Domino’s Rewards continues to bring back members for repeat purchases. Total active membership increased to 35.7 million in 2024, up 2.5 million compared to 2023. Part of this growth came from more light users and carryout customers who were the primary target of the redesign.
“That becomes a huge flywheel because now we’ve captured them into a database and we can start marketing [the new users] to drive incremental compounding impacts,” said CFO Sandeep Reddy.
The revamped loyalty program will soon be paired with an upgraded website and mobile app. Some enhancements include new food photography, elimination of steps in the user flow, and a more intuitive layout. Domino’s finished building the website last year and is slowly converting more people to the new version.
Weiner said Domino’s is rolling out the tech quickly so it can “support the business in the right way.” The app will come out later than the website, but both should launch this year.
“When you talk about integration into our systems, when you talk about personalization, when you talk about speed, all of that is the reason we’re confident about the new website,” Weiner said. ” … The app, we brought up a long time ago. A lot of things have changed. A lot of things that were frankly common among other apps, we didn’t have. Also, our carryout business is much bigger than it was when we developed the original website. And so that, which was kind of an afterthought in our first website, won’t be there in this. This will be a great carryout experience.”
The brand grew U.S. same-store sales 3.2 percent for fiscal 2024, backed by positive order counts. The results helped Domino’s gain about 1 percent market share in the U.S., consistent with its average annual share growth. Additionally, for the year, the carryout and delivery channels lifted 6 percent and 1.1 percent, respectively.
That’s all thanks to the brand’s Hungry for MORE strategy, including the launch of New York Style Pizza and Mac & Cheese Pasta, improvement of dough management and baking processes that cut delivery times by two minutes, deployment of 1,600 easy-to-use dough stretchers, rollout of promotions like MOREflation and Emergency Pizza, a revamped loyalty program allowing guests to earn free food faster, and the inclusion of third-party aggregators.
With that said, Q4 proved difficult. Same-store sales increased 0.4 percent, backed by 2.3 percent pricing. Traffic was flat in the quarter. Carryout comps were up 3.2 percent but delivery fell 1.4 percent due to pressure on low-income consumers.
Domino’s finished 2024 with 7,014 U.S. restaurants, a net gain of 160 year-over-year. It also had 14,352 international outlets, a net gain of 215 year-over-year.
Franchisees earned $162,000 in cash flow per store last year, missing Domino’s goal of $170,000. The company attributed the shortfall to the macroeconomic environment plus the increased promotions across the industry.
But Weiner isn’t worried about operators’ confidence in the brand. If that were true, they wouldn’t have approved the $9.99 value deal. Franchisees are continuing to open units too, the CEO points out.
“Our franchisees are pretty special,” Weiner says. “They’re fully invested in Domino’s. They don’t run any other restaurant chains. This is their business. And they are competitive folks. And actually, they’re in it for the long term because of this being their primary business … It certainly wasn’t a year where we delivered what we said we would, but I think they’re in it for the long term. We’re in it for the long term. It was still a win in 2024 for Domino’s Pizza.”
