On Thursday, Russell Weiner, the global CEO of Domino’s Pizza, remarked that the company has been successfully gaining market share from independent and regional pizza competitors. He highlighted India and China as the focal points for international growth for the global pizza giant in the coming year.
“A large, fragmented category offers significant growth opportunity,” Russell said in a presentation during the company’s Global Investor Day on Thursday.
Acknowledging the rise of regional rivals across all its markets worldwide, Domino’s noted in its presentation, “We will get more customers through a value strategy.”
Both in India and on a global scale, Domino’s has been implementing strategies such as introducing more value meals and ramping up consumer promotions to counter the growing competition from emerging regional pizza brands.
“We have addressed business challenges. If we don’t open stores, our competitors will,” Domino’s, which competes aggressively with Yum Restaurants-owned Pizza Hut in the organised Quick Service Restaurant (QSR) market, said.
In the third quarter of 2023, Domino’s disclosed global retail sales exceeding $4.2 billion, with an equal split between the United States and other international markets.
The pizza chain additionally mentioned that India and China will take the lead in international store expansion in 2024, projecting the number of stores in India to increase from the current 1,961 to 3,000 by 2029.
Meanwhile, Jubilant FoodWorks (JFL), the entity holding franchise rights for Domino’s Pizza and Dunkin Donuts in India, announced a 26% decrease in net profit to INR 97.20 crore in the September quarter, despite a 5% growth in revenue to INR 1,368.63 crore.
“We reckon that the recovery in the dine-in business is uninspiring, while operating margins remained under stress due to negative operating leverage,” ICICI Securities wrote in a report on JFL after its second quarter earnings. “Key downside risks are raw material costs turning inflationary and increase in competitive intensity,” the report added.
Over the last four quarters, Western-style Quick Service Restaurant (QSR) companies in India have witnessed a decline in sales, attributed to inflation impacting consumer spending preferences towards lower-priced alternatives. Additionally, competition from hyper-local brands has escalated during this period.