For decades, Domino’s Pizza enjoyed a massive advantage. It was really the only company doing delivery efficiently.
For a very long time, investors thought of the chain as a technology company and not really a food operation. That also seemed to be how the chain saw itself, as it invested heavily in items like its Pizza Tracker and not so much in its actual product.
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Domino’s Pizza was cheap, and you could get it pretty much anywhere at a time when delivery options were very limited.
That delivery advantage essentially powered the business for decades. Domino’s built out its delivery infrastructure and maintained a global advantage, not just over other pizza places, but over take-out food in general.
In recent years, with the rise of food delivery services like DoorDash and Uber Eats, the Domino’s advantage does not matter as much. It’s much more expensive to use these services, but they open up the entire world of restaurants to the delivery market.
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Now, while Domino’s might be your only food option after midnight, during the rest of the day you have endless choice. The pizza giant is still popular and still cheap, but it did see its first quarters without sales growth in decades over the past 12 months.
Now, one of the chain’s key franchise operators has closed 200 stores. But it has a wild new food item designed to win back audience.
Image source: Domino's/Shutterstock/TheStreet
Domino’s closes 200 stores
While it’s tempting to blame The Noid for any struggles Domino’s has, that evil scamp has been famously ineffective in his efforts to disrupt the pizza chain. In many ways, he’s like Wile E. Coyote being embarrassed by the Road Runner.
The Noid has also confined his activities to the United States, since it’s difficult to travel abroad when you wear a mask. That creates all sorts of passport problems and has left The Noid not even an effective American pizza terrorist, let alone a global one.
Earlier this year, Domino’s (DPZ) largest franchisee, Domino’s Pizza Enterprises (DPE), shared its decision to close over 200 stores.
“Less than three weeks ago, we announced we were closing 205 loss-making stores, mainly in Japan and mostly opened during Covid. This is to sharpen focus on stores and regions with the greatest potential, improving profitability and support[ing] our broader turnaround,” DPE CEO Mark Dyck shared during the company’s half-year earnings call.
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He tried very hard to qualify the shutdowns as strategic and not a sign of a failing business. The CEO actually seemed like he only mentioned the 205 closing stores because of legal requirements.
“Because of disclosure obligations, we updated you then because we are moving at pace. I want to be clear that those recent closures in Japan do not reflect and should not be interpreted as a statement on our long-term opportunity to grow, including new store openings,” he added.
“The fact is good stores create great value, and you can see that by the improvement in unit economics of our franchise partners we have achieved over the past 12 months.”
Domino’s releases a wild new item
DPE’s biggest marker is Japan, where it still has over 750 locations. The franchisee, perhaps to distract from the store closings, has introduced the bonkers new “Crispizzaburger” across Japan.
The Crispizzaburger seems like the sort of product someone who has only seen the United States on television might create. It’s a crispy pizza crust topped with various ingredients folded over, sprinkled with parmesan cheese, and baked.
It does not offer a burger patty or really look like a burger, but it is crispy and made from pizza dough.
“Originally sold by Domino’s Pizza in Australia, the ‘Crispizzaburger’ has been adapted for local tastes in Japan, with three flavours to choose from — the classic ‘Garlic Bacon Cheese,’ ‘Teriyaki Cheese,’ and the limited-time ‘Double Cheese Beef.'” Each variety comes with a side, and is available for takeout from the time of opening until 4 p.m., priced at 790 yen each (about $5.36), Japan Today reported.
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Domino’s Japan has also launched a new line of Bento Box-style lunches. Those include a personal pizza, a side dish, and a drink.
Sides include baked potato wedges, cheese sticks, chicken nuggets, salads, clam chowder, and a soup called “corn pottage, a warm, sweet corn soup full of crunchy corn pieces,” the chain shared on its website.
