|

Domino’s Ekes Out a Win Amid Turbulent Times for Fast Food

The company saw rejuvenated growth due to the success of its promotions and new partnership with Uber Eats.

Photo of exterior of a Domino's pizza restaurant
Photo by Michael Barera via CC BY-SA 4.0

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

For Domino’s, a higher stock price is no longer a pie in the sky. 

The Michigan-based chain, known for its bargain pies, saw its stock jump nearly 6% on Monday after reporting rejuvenated quarterly domestic same-store sales, which is somewhat of a rarity among fast food businesses these days. 

I’m Not Loving It

Many companies in the sector have blamed inflated food prices, rising energy costs, and minimum wage bumps for driving recent menu price hikes. In the past two years, McDonald’s raised prices by roughly 20%, and in some parts of the country, a Big Mac combo — which includes the signature double burger, fries, and a drink — is setting customers back nearly $18. While the brand was able to coast on people willing to spend more for a while, those customers are beginning to cut back on their Mickey D’s visits and orders. 

Meanwhile, the ongoing conflicts in the Middle East, which have sparked boycotts and acts of vandalism, are denting international sales growth for McDonald’s, as well as for Starbucks and Yum Brands.

But Domino’s is faring better than its fellow greasy spoons:  

  • While its international business is taking a hit like everyone else — international sales growth of just 0.1% was far below Bloomberg’s estimate of 3.2% — the home of the stuffed cheesy bread said domestic comparable sales grew 2.8% in Q4, beating analysts estimates of 2.2%.
  • Domino’s said the growth resulted from its promotional deals, more people signing up for its loyalty program, expanded advertising, and finally partnering with third-party delivery services like Uber and Postmates.

Prices Go Up and Down: Wendy’s, which is already the most expensive fast food chain according to PriceListo, said Monday that it would introduce “Uber-style” surge pricing in 2025. Similar to how rides cost different amounts at different times of the day because of demand, so too will a Wendy’s Baconator or Frosty. Looks like congestion pricing doesn’t stop at 60th Street, as New Yorkers could expect to pay roughly $10 for just a cheeseburger at lunchtime.