Domino's Pizza to focus on promotions, special products in effort to shore up unit-level economics with an eye toward driving domestic expansion, CEO says
May 2, 2012
– Domino’s Pizza Inc. is focusing on promotions and special products in an effort to shore up unit-level economics with an eye toward driving domestic expansion, according to CEO Patrick Doyle, Nation’s Restaurant News reported May 1.
Doyle added that Domino’s goal was to turn its franchisees’ profits into new stores to improve the company’s long-term growth rate for its domestic stores.
During the first quarter, domestic same-store sales results were more heavily influenced by the company’s promotional strategy than by either high gas prices or mild winter weather, Doyle said. Corporate store margins rose 2.9% during this quarter. According to CFO Michael Lawton and Doyle, the profitability averages of the company-owned stores were slightly lower than those at its franchised locations.
Efforts to drive sales via promotions and special products will continue into the second quarter with a new flavor for the company’s Artisan Pizzas. During the rest of the year, Domino’s will attempt to balance its advertising between side item messaging and its core-pizza products in an effort to even out profit margins, traffic growth and the average check size, Doyle added.
Once the franchisees hit targeted profitability levels, the company will be able to resume domestic unit growth. Over the past two decades, Domino’s has largely remained stagnant in terms of domestic unit growth, which is something that the company hopes to change over the medium term, Doyle said.
The primary source of this article is Nation’s Restaurant News, New York, New York, on May 1, 2012.