Redesigned recipe leads to sales increases for Domino's Pizza
Domino's Pizza successfully convinced scores of customers to give it a second chance after reconfiguring its core pizza recipe. Now the question is: Will those customers stick around?
The Ann Arbor-based pizza delivery chain said Tuesday that its same-store sales at U.S. locations had increased 14.3 percent in the first quarter of 2010, compared to the first quarter of 2009. That reflected a significant increase in foot traffic as customers opted to give the new pizza a try.
The company's revenues soared 18.4 percent in the first quarter to $381.1 million and profit rose 3.2 percent to $24.5 million.
The new pizza recipe at Domino's Pizza is driving significant sales increases for the Ann Arbor-based chain.
Photo courtesy of Domino's Pizza
"A remarkably better pizza, and our honesty in how we told consumers about it, is paying off with a revitalized overall category - with Domino's leading that trend," said J. Patrick Doyle, CEO of Domino's, in a statement. "We couldn't be more pleased with the success of our new and inspired pizza."
Despite the gains, Domino's shares slipped $1.94 yesterday to $14.12. The stock had climbed back to $14.62 by 10:23 a.m. today.
The Associated Press said yesterday's decline was attributable to general market fears about the global implications of the financial crisis in Greece.
Customers' embrace of the new pizza recipe reflects early confidence Domino's expressed in its first-quarter sales.
Completely redesigning a core recipe can be risky, but Domino's had tested its new product with focus groups for about 18 months before introducing it, and experts said they were confident that it was not a mistake.
The improvements in foot traffic at Domino's partly reflect an aggressive marketing campaign designed to draw attention to the new pizza recipe, which features new sauce, cheese and crust.
Former Domino's CEO David Brandon, who resigned to become athletics director at the University of Michigan but still serves as chairman of Domino's, had cautioned that the first-quarter traffic spike was not sustainable.
Still, the company believes that it's well positioned to continue producing single-digit revenue increases even without the marketing campaign.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Nicole Casal Moore
Fri, May 7, 2010 : 3:03 p.m.
Ew. I think it tastes completely fake. And I got a robocall from them at work the other day. Weird and annoying.
Trouble
Thu, May 6, 2010 : 8:26 p.m.
Well gee... what have they been feeding me up to now? The Best Pizza they ever made and the only good Pizza they ever offered is when Tom Monaghan was making them by himself on Cross Street in Ypsilanti in the late Sixties and early Seventies. Sweet Memories...
Dave66
Thu, May 6, 2010 : 5:59 a.m.
I tried the new pizza and Domino's is telling the truth, it IS better. It used to taste like generic ketchup on cardboard. Now it tastes like name brand ketchup on cardboard. Who says you can't teach an old dog new tricks?
garrisondyer
Wed, May 5, 2010 : 6:14 p.m.
It used to be decent (especially the 2x Tuesdays!), but now it is disgusting. If I wanted the crust on my pizza to taste like that nasty "liquid-butter-substance" stuff, I'd order it that way.
Kyrie
Wed, May 5, 2010 : 4:49 p.m.
I was never really much of a Domino's pizza before they got this new pizza. The only reason I really went there was because they had a 4$ pizza and its less than half a block walk from my house. When they had the new pizza I was interested in trying it because hey if its good then I now have a good close pizza joint but when we ordered it and asked if it was the new pizza the girl on the phone didn't even really know what we were talking about (and this is store 1). We got the new pizza and I have had it 2-3 different times and I was still very disappointed. I really don't feel like much is changed flavor wise, they just put a bunch of greasy butter and seasoning on the crust. I came across this blogger who writes about the food in the Ypsi/Arbor area and he had a review of the pizza and if you look in the comment section a lot of people say they try the pizza and then they get sick after eating it and not just once......I say pass and go get some Marco's at least you supporting a different local pizza place that feels a bit more local and not so much of a chain restaurant. http://www.epicportions.com/2009/12/18/dominos-new-pizza-recipe/
rreidannarbor
Wed, May 5, 2010 : 3:07 p.m.
Gotta admit, I split one with my daughter last night ($3.99 was too good to pass up) and its no longer the dried out cardboard frisbee it used to be. It has actual flavor and tasty sauce and it's not dry. For the low/mid end pizza, its probably one of the best options out there now.
Mick52
Wed, May 5, 2010 : 10:19 a.m.
Its true. I tried it and it tastes much better.
notinypsi
Wed, May 5, 2010 : 10:03 a.m.
It also helps that they are offering a medium cheese or pepperoni pizza for just $3.99 yesterday and today. Major auto calling campaign done yesterday. Received calls at work and at home about it. Guess what we had for din din last nigh? :-)