Domino's Pizza Issues an Urgent Statement to All Its American Customers

Domino's Pizza faces a concerning phenomenon in customer behavior, reflected in a drop in their delivery orders.

During the fourth quarter of 2024, the company reported a 3% growth in its revenue compared to the previous year. However, sales in stores within the U.S. barely increased by 0.4%, well below the 1.63% analysts expected. This slowdown negatively impacted the stock market, causing a 6% drop in the value of its shares after the publication of its results.

Domino's Pizza Warns of the Change

In the earnings conference on February 24, Domino's CEO Russell Weiner issued a warning. Spending on home orders has become a burden for low-income consumers. According to the company's data, orders for in-store pickup grew by 3.2% while deliveries decreased by 1.4% in the last quarter.

"Home delivery is a bigger expense in this world where price matters more than ever," Weiner explained. "The choice isn't to go to another restaurant, most of the time it's simply to eat at home."

The pizza chain faces a context where fast food is no longer perceived as an affordable option. A study by LendingTree indicates that 78% of consumers consider this type of food a top-level due to its progressive price increase.

Frustration with Tips and High Prices Affect Consumption

Besides the rise in costs, the tipping culture in fast-food restaurants has caused discomfort among customers. According to the same study, 43% of surveyed Americans have refused to leave a tip in these establishments.

Another relevant fact is that 62% of consumers have reduced their fast-food consumption due to high prices. Additionally, 56% prefer to cook at home when looking for a more economical and simple option.

Weiner acknowledged that delivery costs have increased, although he defended that Domino's fee remains competitive within the market. "The service of bringing the food is undoubtedly more expensive. You have the fees and hopefully tips for our delivery drivers," he stated. "But we remain competitive not only against other pizzerias but with any other type of delivery."

Domino's Strategies to Attract Customers

Faced with the drop in home orders, the company has implemented strategies to recapture the attention of cost-conscious consumers. In September 2024, Domino's launched the MOREflation promotion. This allowed customers to buy two medium two-topping pizzas for $6.99 each. They also had the option to make one of them large at no additional cost.

Another measure to encourage purchases was the Emergency Pizza program, which offered rewards program members a free medium pizza after placing an online order. This promotion was valid until January 19, 2025.

Despite these strategies, consumer resistance to paying more for home deliveries remains a challenge. The change in customer habits suggests that the fast-food industry faces a new challenge. Now it is up to them to convince consumers that it remains an accessible option in times of inflation.