Thursday, December 2

Dominos Pizza: the reasons for the precipitous drop in popularity



When it comes to delivery pizzas for a long time Domino’s seemed quite invincible, the reality is that for many years they were the favorite and indisputable choice of many people. Not surprisingly earlier this year, America’s largest pizza chain added gold accolade to its list by being recognized as the largest pizza chain on the planet. Domino’s operates more than 18,000 restaurants worldwide, while the second-largest competitor, Pizza Hut, is behind, operating nearly 17,800 restaurants. However, although for years they have been the favorite pizza delivery in many parts of the world and the United States, and although Domino’s reported some of the strongest sales in brand history over the past year and a half. The latest figures show that things are changing and that the momentum the pandemic had during the pandemic is waning.

The truth is that there are many reasons that are related to the dominance of Domino’s during the last decade, the main ones being reduced to an agile and adaptable business model in which valuable innovations were integrated such as a great switch to digital orders. According to CNBC, now the chain gets three-quarters of its orders digitally, which helped them further conquer the fast food pizza market during the pandemic. Here are some of the possible reasons for his crash.

1. Domino’s had stellar sales early in the pandemic

Last year was a great one for Domino’s, the data doesn’t lie and a incredible 16% increase in overall sales in the months immediately following the blackout period. Its second-quarter sales were the best in more than a decade, according to data released by Yahoo! Finance between March and July, the company’s share price rose nearly 17%.

2. Chain growth may be over by now

We all know that in the restaurant industry and in general; everything that goes up, must come down, and this also applies to Domino’s inexplicable sales boom. According to data published in Fox Business, the chain has just registered its first decline in sales in years. In fact, it was the first such decline in more than a decade. For added context: Same-store sales were down just under 1.9% at US locations, compared to the same period in 2020. Consider the unprecedented boom in sales in recent quarters as the decrease is observed, the chain continued to rise more than 15% every two years.

3. The home delivery boom is ending

One of the most important aspects revolves around the pandemic and how it has given way over the months. So that demand for home delivery is slowing and Domino’s is a heavy delivery brand. In the early days and at the heart of the pandemic, ordering home delivery was a safe way to eat without the need to cook or be in contact with other people. But with widespread vaccines and better understood and implemented functional safety measures, more and more people are ready to dine out again. In fact, nearly a third of American diners said they expected to order fewer deliveries from restaurants in the future, according to one. survey of 963 Americans conducted by research firm Revenue Management Solutions last month.

4. Restaurants are having more and more trouble finding help

As we mentioned earlier, on the one hand the main reason for the drop in sales has been related to the end of pandemic insanity. However, according to statements by Domino’s CEO Richard Allison, recently acknowledged to Business Insider the continuous challenges that the chain has experienced to increase staff And this is an aspect that has also negatively affected sales.

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