Why Domino’s is adjusting its menu and marketing calendar

Domino’s first quarter was positive, but only by a smidge. The 0.9% domestic same-store sales increase fell short of analysts’ and executives’ expectations, but the latter cohort has a plan to ensure a full-year increase of 3%, nonetheless.

That plan includes gobbling up market share from competitors who are closing hundreds of stores while pushing out deals Domino’s CEO Russell Weiner believes is unsustainable for them given lower franchisee profitability.

It also includes the acceleration of menu innovation. During the company’s earnings call Monday before market, Weiner said the team is making adjustments necessary to “drive an impact in the current macro environment.”

“I’m especially energized by the product innovation we’re bringing in the second half of the year, particularly around pizza, which goes beyond what we originally planned,” he said. “It’s bold, exciting and has real potential to elevate our brand.”

The menu/marketing calendar is something Domino’s can control, unlike consumers’ plummeting confidence, he added. Weiner believes consumers will remain pressured, especially as gas prices remain elevated.

“How do we change things? How do we see what's out there in the environment? And it's not just value; I think we can do a little bit more on pizza innovation as well. Starting as soon as May you're going to see things on the calendar or in media from Domino's that weren't on our calendar to start the year,” he said. “Our plans moving forward will look very different than they were starting the year, and that's because we adapt to what's going on in the broader environment.”

Much of Domino’s marketing calendar throughout the past year or so has been dominated by deals — weeklong carryout specials, 50% off promotions, Any Crust, Any Toppings for $9.99, and so forth. There have been some menu innovations, but few on the pizza side. In April, Domino’s launched a new signature sauce that features a hint of Parmesan. In November, the chain brought us a new Spicy Chicken Bacon Ranch Pizza. Cinnamon and Garlic Bread Bites joined Domino's Parmesan Bread Bites in September and last March, the chain launched Parmesan Stuffed Crust.

“In times like this, we’re able to say, ‘What’s going on in the macro and what can we do to inflect any negative externalities?’” Weiner said. “We’re going to do that with pizza innovation.”

He hinted there could also be plenty of innovation beyond pizza, noting that 40%-plus of the chain’s sales come from other menu items.

“We’ve had sandwiches for a very long time. We’ve got a wide variety of chicken products,” he said. “(The) product innovation pipeline is something that is very robust.”

CFO Sandeep Reddy added, “We’re actively optimizing our marketing calendar to meet the moment and ensure we're well positioned despite the current macro environment.”