Domino’s CEO Russell Weiner called his company an “equal opportunity share stealer” to describe how the brand likes to compete in the marketplace. He admitted the chain lost that philosophy in the past couple of years.

But thanks to “Hungry for More”—a series of self-help initiatives covering food, operations, value, and enhanced franchisees—the country’s largest pizza chain is starting to see customers return in droves. In the first quarter, Domino’s same-store sales rose 5.6 percent year-over-year, driven primarily by higher order counts. And that’s across all income cohorts and sales channels. In fact, carryout comps lifted 9.1 percent and delivery comps increased 2.9 percent. The company managed to not only deliver more pizzas than Q1 2023 but also did it more efficiently.

This marks Domino’s highest same-store sales growth percentage in three years.

Then there’s the partnership with Uber Eats, which is now fully underway nationwide. Third-party delivery now mixes 1.4 percent, up from 0.4 percent in Q4 2023. Domino’s expects to reach 3 percent by the end of 2024. The chain is seeing a higher percentage of single-user transactions on Uber than it’s seen on its own channels. This platform is becoming more promotional too. Customer responses to deals are stronger than to everyday low prices. To counter, Domino’s continues to fine-tune its marketing spend and offers.

“Our Q1 results demonstrated that our Hungry for More strategy is delivering on its promise, driving more sales, more stores, and more profit. We drove strong comp performance in the U.S. that flowed through to the bottom line with double-digit profit growth,” Weiner said during the chain’s Q1 earnings call.

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Weiner has confidence in maintaining momentum because tailwinds are fueled by repeatable components, not short-term sales injections. This includes the revamped loyalty program, which lowered the minimum price to earn points from $10 to $5 and made it so customers can begin redeeming at 20 points instead of 60 points. The switch draws more interest from lower-income consumers and carryout customers who typically have lower check sizes. The new loyalty program also attracts lapsed members and increases activity of light users. As Weiner pointed out, existing users who had 50 points went from having zero chances to redeem to accessing two different items. The 20 and 40-point tiers—the two that didn’t exist before—combine for the majority of the redemptions in Domino’s Rewards.

“Rewards, certainly was a big part of [traffic increases] and will be a tailwind for us as we continue this year and for the next few years,” Weiner said. “I mean, we saw this the first time we launched a loyalty program. It was time to reinvent it and we did. The nice thing about the reinvented program is it’s driving activity with folks that maybe we didn’t engage as much in the old program. And so, the carryout customer engagement is much higher than it was before. Light users are much higher than they were before. And so that gives you a little bit of a sense of where that growth is coming from. And I don’t expect the tailwind from loyalty to go away anytime soon.”

The brand still prides itself on national promotions like the $6.99 Mix and Match and $7.99 carryout deal, but leadership believes value is a lot more than just price points. Domino’s finds what’s most valuable to customers by tapping into cultural tensions. For instance, in October, the chain announced that it would give free pizzas to customers with student loans, which continues to be a hot-button issue for the federal government. And this month, Domino’s released a program in which it will “tip” customers $3 if they tip the delivery driver $3 or more. This speaks to the aggravation guests feel toward several businesses asking for tips in the post-COVID landscape.

Additionally, the chain sees value in bringing product news. In Q1, Domino’s ran a campaign highlighting its pan pizza, a premium product that brought attention to this crust type for the first time since 2014. The brand hired a new food photographer to better showcase products in advertisements. A couple of weeks ago, Domino’s introduced New York Style pizza, made with 100 percent real mozzarella and provolone and cut into six big slices.

“I have a lot of people I know saying, ‘Wow, it feels like Domino’s is advertising a lot more this year than it ever did before,'” Weiner said. “And the answer is not really. It’s what’s happening is what we’re doing is breaking through more, and that’s where you want to be.”

Domino’s also perceives value as pushing through “the sea of standard discounts that you see in the marketplace,” said Weiner. That’s what led the brand to Emergency Pizza, which is marketed as a free pizza customers can get in a time crunch, but really is another BOGO deal. The CEO said it’s performed better than any BOGO promotion in his career and was a meaningful driver to comps in Q4 and Q1. It drew increased orders and acquisitions into the loyalty program. On top of that, in Q1, Domino’s brought back its carryout special boost week (50 percent discount offers) for the first time since January 2020, and it exceeded expectations. The brand expects its promotional calendar to be similar to 2019, which should include around six boost weeks.

When it comes to operations, Domino’s launched a new service program with training focused on dough, how employees build products, and how they cook them.

“Consistency begets repeat purchase,” Weiner explained. “And so, the way I think of it is, we in the U.S., we sell about 1.5 million pizzas every day. We don’t want to look at it that way. We want to look at, we sell one pizza 1.5 million times. Every pizza that we make is a chance to delight a customer or disappoint a customer. And so, the training we had last year was a little bit more focused on circle of operations technology, and you’re seeing the results now in delivery times.

“The stuff we’re doing this year, the first sprint was on the dough, then we’ve got ingredients and baking,” he added. “That’s all about the consistency. And consistency really drives repeat purchase. So, if you get that right, plus you have the loyalty program on top of that, then you have two things driving repeat purchase, and that’s where we want to be. We think this can be offensive for us, an offensive move on consistency.”

Because of the improvements, Domino’s sees clear sight to $170,000 in per-store profitability for franchisees—a figure that should help convince new and existing operators to invest further into the business. That would be an increase from $162,000 in 2023 and $139,000 in 2022.

The brand finished Q1 with 6,874 U.S. stores after opening a net of 20 restaurants. Internationally, where same-store sales lifted 0.9 percent, the chain ended Q1 with 13,881 stores after opening a net of 144 outlets.

Finance, Franchising, Growth, Pizza, Story, Domino's