Domino’s Pizza (DPZ) is taking bold steps to reverse a troubling trend of declining sales at its U.S. locations. The pizza giant revealed a modest 0.4% increase in same-store sales for the fourth quarter of 2024, falling short of analyst expectations, which projected a 1.63% increase. This lackluster performance was attributed to a shift in consumer behavior, with many low-income customers opting to eat at home rather than pay for delivery due to economic pressures.
Domino’s CEO, Russell Weiner, acknowledged the impact of macroeconomic and competitive factors during a February 24 earnings call. “Delivery is a tougher value right now in this value-conscious world,” said Weiner. As a result, Domino’s saw a 1.4% drop in deliveries during the fourth quarter, while more customers chose the cost-effective option of eating at home.
Competitive Move to Boost Sales
To counteract these trends and stay competitive, Domino’s has introduced a major update to its menu: the Parmesan Stuffed Crust Pizza. This move directly targets Pizza Hut’s Original Stuffed Crust Pizza, a long-time favorite introduced in 1995. Domino’s version features a buttery-flavored dough filled with mozzarella cheese and sprinkled with parmesan for extra flavor. This is Domino’s first-ever stuffed crust offering.
The new pizza is priced at $9.99 for a one-topping Parmesan Stuffed Crust Pizza through the Carryout Deal. Domino’s Chief Marketing Officer Kate Trumbull expressed excitement about the new addition: “We’re excited to announce that our first-ever stuffed crust is finally here and we promise, it is worth the wait.”
Domino’s Faces Increasing Competition
Domino’s decision to launch a stuffed crust pizza comes at a time when its competitors are seeing mixed results. Pizza Hut recently reported a 2% increase in same-store sales in the U.S., attributed in part to its popular $7 Deal Lover’s Menu, where customers can choose two or more items for $7 each.
Meanwhile, Papa John’s reported a 4% decrease in comparable sales in the U.S. for the same period, also facing declines in deliveries. Todd Penegor, Papa John’s CEO, noted that the environment is heavily value-focused, with customers more mindful of their spending. According to a recent LendingTree survey, 78% of Americans now view fast food as a luxury, with 62% eating less fast food due to rising prices and 56% opting to cook at home for more affordable meals.
Domino’s new menu item aims to entice customers looking for indulgent, yet affordable options in a highly competitive market. As the company navigates these challenges, it will be interesting to see if the Parmesan Stuffed Crust Pizza will help bring back the customers it’s lost to changing spending habits.
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