What is in this article?:
- Domino‚Äôs streamlines menu rollouts, puts focus on digital
- Streamlining new menu launches
CEO Patrick Doyle said that new digital innovations allow for fewer, more impactful food rollouts.
Streamlining new menu launches
“In the past, we’d launch products and say, ‘We hope this is something that could be permanent,’” Doyle said. “But when it went off the air, people didn’t have that reminder, and we’d see the [product’s menu] mix drop off, and eventually we had to pull it off the menu. With the digital platform, it allows us to build on the menu and add things that are going to stay there … and have incrementality after launch.”
Doyle said Domino’s would introduce fewer, better menu items going forward to meaningfully increase sales, following the example of its Handmade Pan Pizza launch last October after years of development. Rather than replicate an aggressive promotional strategy common to the pizza industry, with new limited-time offers every six to eight months, Domino’s will take its time to get the big platform launches right, he said.
Doyle noted that Domino’s Handmade Pan Pizza performed well in its domestic system of 4,939 restaurants. But the chain did not rush to fill a void with new product news in its advertising, nor would it necessarily need to in the coming fourth quarter, when Domino’s laps the launch of pan pizza and a 4.7-percent year-earlier same-store sales increase.
When asked on the call if a worsening consumer environment could dissuade Domino’s from its deliberate pace of releasing new product or technology news, Doyle responded that the current low-growth economic situation has been in place consistently for the past few years.
“But I see more upside than downside,” he said. “It could still get better and turn into some tailwinds for us.”
The chain expects commodity inflation to remain flat to slightly down next year, which might help offset the consistent challenge seen in the consumer environment, but Doyle speculated that the pizza category’s rate of discounting and promotion would remain “steady as she goes” in 2014.
“I don’t know that I would see the environment changing enough next year that I would expect pricing to materially adjust,” he said.
Ann Arbor, Mich.-based Domino’s Pizza Inc. operates or franchises 10,566 restaurants in the United States and more than 70 international markets.
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