Domino's Pizza has seen sales suffer in recent years and wanted to turn
things around. So they adopted an unusual rebranding strategy: self-deprecation. At the beginning of 2010, Domino's launched an ad
campaign that outright mocked the low quality of its pizza but pledged
that a new recipe would surprise consumers. But the reviewers weren't
the only ones happily surprised
. The company,
based in Michigan, was greeted this week with reports that show an 18.4
percent increase in sales (14.3 percent in same-store sales) and a 3.2
percent boost in net income, all in the first quarter of this year. How
did they do it?
- Demographics of New Customers The Detroit
Free Press' Katherine Yung reports,
"Domino's revamped pizzas are attracting more suburban and higher-income
customers to the chain, [CEO J. Patrick] Doyle said. 'Consumers are
loving it,' he said. 'We're feeling pretty good about where we are at.'"
It's Especially Impressive USA Today's Bruce Horovitz explains,
"Domino's instant turnaround is almost without precedent in the
fast-food industry. ... Even more impressive, the turnaround is taking
place at a time when the $22 billion pizza-delivery business — quashed
by the recession and vastly improved frozen-pizza technologies — fell
3%, researcher Technomic estimates."
Reinvention' The Awl's Maura Johnson scoffs, "The
great self-loathing-filled reinvention of the Domino's Pizza recipe was
big business for the Michigan-based purveyor of cheese and dough. ...
Domino's head pizza-tosser Thomas Doyle said that 'all of it' was pretty
much the result of the revamp and its attendant advertising blitz.
Three months from now, expect to see similar smiley-faced proclamations
Yum! Brands camp." (That's a reference to the owner of KFC,
responsible for the much-discussed Double Down.)
Strategy's Other Prong The Wall Street Journal's Joan Solsman finds it. "The
company also broadened its advertising budget and ventured into new
foods such as pastas, desserts and sandwiches to attract lunch business
and win market share when consumers grew reluctant to spend on dinner
deliveries during the recession."
- Context: How The Restaurant
Biz Is Doing Reuters' Lisa Baertlein checks in.
"Restaurant shares have made bigger gains than the entire market with
signs that the U.S. economy is healing and consumers are starting to
spend again. The Dow Jones U.S. Restaurant and Bars index .DJUSRU, fell
2.4 percent as investors fretted that the financial rescue package for
Greece may not be enough to prevent a broader sovereign debt crisis in
the euro zone," she writes. "Some analysts were looking for a U.S.
same-store sales leap of about 20 percent, and investors are now focused
on how sustainable such gains will be."
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