Domino’s sales slowed in the most recent quarter amid a broader slump in demand for pizza as Americans pinch their pennies.
While the largest pizza company in the world beat Wall Street’s expectations on both profit and revenues, its shares swooned by more than 4% Tuesday as it warned about slower growth for the rest of the year and reported a weak 0.3% increase in same-store sales for the quarter.
Global retail sales growth slowed to 3.2% during the quarter, compared to 6.3% a year ago.
The humble pie is now the seventh most popular food in the US in terms of sales, down from the second-most-consumed food in the 1990s, according to Technomic, which tracks food and restaurant trends.
Mexican cuisine leapfrogged pizza last year as the sixth-most popular food in terms of total spending, the research organization reported.
“It’s a perfect storm for pizza as consumer tastes shift,” with about 9% of Americans taking GLP-1 drugs for health reasons, said David Henkes, senior principle at Technomic.
“Pizza will be the lowest growing cuisine type of all other major cuisine types including burgers and Asian food this year.”
During an earnings call, Domino’s new CEO Joe Jordan said, “As consumer expectations evolve, growth will come from understanding those changes, meeting customers where they are.”
To that end, Domino’s launched The Domino, an individual pizza, to mixed results. The lower-priced pie likely dragged down the average check size, wrote Bloomberg Intelligence analyst Michael Halen.
At least three independent, smaller chains filed for bankruptcy protection last year, including Pieology Pizzeria, Anthony Coal Fired Pizza & Wings and Bertucci’s Brick Oven Pizza and Pasta.
Meanwhile larger pizza chains like Pizza Hut, Papa John’s and Papa Murphy’s are in play, with Yum! announcing in June that it reached an agreement to sell Pizza Hut to a private equity firm for $2.7 billion.
Papa John’s — which is closing hundreds of stores next year — is reportedly exploring a bid to from a private equity firm to take it private while Papa Murphy’s – owned by MTY Food Group – is reportedly exploring a sale.
This summer, MTY said it was closing up to 50 Papa Murphy’s stores.