Domino’s offers another pizza discount

Domino’s is giving customers half off their pizzas again.

The fast-food pizza chain on Monday announced that it is giving customers 50% off all menu-priced pizzas through Sunday, Aug. 2.

The offer applies to any menu-priced pizza. Customers can choose from one of six pizza crusts or its specialty pizzas, with any toppings.

Sales and unit growth

The discount continues Domino’s push for order-count growth as the chain continues to put pressure on competitors vying for a shrinking number of pizza orders from traditional chains.

The sector broadly has struggled as more customers shift to third-party delivery companies and lower-income diners cut back on their restaurant frequency. Sales at limited-service pizza chains declined last year, according to data from NRN sibling company Technomic. Sales at such concepts have been slower than any other industry sector over the past five years.

Domino’s, the largest such chain, has grown despite this weakness, as it takes share from struggling brands like Pizza Hut and Papa Johns. Those two chains, along with brands like Papa Murphy’s, have been closing locations in recent years.

Same-store sales in the second quarter rose just 0.1%, but the brand increased order count during the period. That means consumers are ordering more pizzas but spending less when they do, a sign that the chain’s discounts are generating order count growth.

Discount war impact

The discount war has been playing out throughout the sector as brands push to get customers in the door. “We run different promotions and we see there is very little loyalty at the moment,” Eric Lefebvre, CEO of Papa Murphy’s owner MTY Food Group, told analysts this month. “The consumer will go where the pizza is cheapest at any time.”

Domino’s, however, believes it has an advantage in a market like this because it has the strongest average-unit volumes among the largest quick-service pizza chains. It also has the industry’s biggest ad budget and can get lower costs for the ingredients used for its pizzas.

“The distance between us and our competition is greater than it’s ever been,” Domino’s CEO Russell Weiner told analysts this month, according to a transcript on the financial services site AlphaSense. “Scale wins. And we’ve never had greater scale. And relative to our competition, they’ve never had less scale and momentum. And those two things add up well for us to continue to drive share.”