Domino’s Sales Tick Up Amid Consumer Belt-Tightening
American consumers are tightening their belts, but still have an appetite for pizza.
Domino’s, the country’s largest quick-service pizza restaurant, released earnings Tuesday (Oct. 14) that showed the company enjoying a 5.2% increase in same-store U.S. sales.
Speaking on an earnings call, management credited this increase in part to Domino’s Best Deals Ever program, which CEO Russell Weiner said the company had decided to extend longer than it initially planned.
The reason, he said, is that “our franchisees called us and told us that they want to continue to lean in because this is driving business in their stores, and it’s driving profitable business. And so I think that even beyond numbers speaks to what it’s doing in our stores.”
Still, management sounded a note of caution while projecting its comp to grow 3% for the year in the U.S.
“Our comp could be pressured by the macro environment in the U.S., which we’ve seen intensify across the restaurant industry at the start of the second quarter,” Sandeep Reddy, Domino’s chief financial officer.
“We’ve definitely been seeing a slowing across restaurant industry sales to start our fourth quarter, and that’s a factor that’s out there,” he added later in the call. “But as far as we’re concerned, we are expecting to continue to gain share against the QSR pizza industry.”
The company’s results come amid an earnings season that shows consumers still spending, though with discernment, as PYMNTS wrote recently, following quarterly reports from Delta Air Lines, Levi Strauss and PepsiCo.
“From air travel to denim to beverages, consumers in the United States are trading off, trading down and holding the line on discretionary purchases, balancing value and experience as budgets tighten,” that report said.
Amid this week’s earnings report, research from PYMNTS Intelligence reinforced what could be seen from corporate commentary and the numbers: Consumers continue to spend, but they are more careful and selective.
The PYMNTS Intelligence report “Why Paycheck-to-Paycheck Consumers Can’t Weather a $2,000 Shock” showed that the number of Americans living paycheck to paycheck remains high. In August, 68% of U.S. consumers said that they were in this position, a figure that leaves little room for error when a surprise expense shows up.
“The average household’s liquid savings have declined by more than 10% in the past 16 months, leaving thinner cushions to absorb shocks,” PYMNTS added.
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