March 12, 2018
Domino’s Is Winning the Pizza Market: But Why?
Pizza chain Domino’s has moved ahead of the competition, and it continues to gain. Besting Pizza Hut for the first time ever, Domino’s hopes to hold that position as the country’s favorite pizza joint. The secret, market watchers say, is in easy delivery. More and more, when American consumers want pizza, they are ordering out, rather than eating in. That puts brands like Pizza Hut, which still depend on restaurants for much of their income, at a disadvantage. They have a larger footprint, higher payroll, and a different image in the eyes of consumers.
How They Did It
But Domino’s ascendance is not just about having a logistical advantage. The company has also come back from a string of negative public relations in the early and mid 2000s, through a combination of better advertising, a big gamble, and improved products.
What had Domino’s in the hole they’ve recently climbed out of? A little more than a decade ago, as competitors like Papa Johns were hitting their stride, Domino’s had been facing a barrage of complaints about the quality of the food. Reviews kept coming in with people talking about how they were going to choose the competition next time they ordered a pizza in order to avoid “bad sauce” that “tastes like ketchup” and “cardboard crust.”
The terrible consumer PR reached its zenith in 2009 when two Domino’s employees were caught on camera “tampering” with food. That was it. Customers stopped going, and Domino’s needed something, quickly, to stop the bleeding. At the time, CEO Patrick Doyle appeared in TV commercials, reading bad reviews of the food.
Doyle promised that the company would do better. He promised a new sauce recipe and better-tasting crust. Then, he offered consumers an incredible deal and dared people to give Domino’s another shot. Customers, faced with paying twice as much for pies at Pizza Hut and Papa John’s decided to give Domino’s another try. Turns out, they liked this new and improved Domino’s pizza an awful lot.
Straight to the Top
By the early ‘10s, the reviews of Domino’s were turning around, and the company decided to double down, adding new menu items such as pasta, subs, and chicken. By the end of the transformation, nearly the entire menu had been updated.
Now, Domino’s has edged out Pizza Hut, taking the lead in market share. But it’s not a comfortable seat at the top of this heap. The margin of difference is slight, and the competition in the pizza delivery game is fierce. Domino’s may hold on, but they will need more than the surge from the deep discounts and “better than expected” menu items.
Ronn Torossian is the CEO and founder of 5W Public Relations.