Dive Temporary:
- Domino’s Rewards, a reworked model of the pizza model’s loyalty program that launched final fall, strengthened U.S. same-store gross sales in This autumn 2023, Domino’s CEO Russell Weiner mentioned on the chain’s This autumn 2023 earnings name Monday.
- U.S. same-store gross sales rose 2.8% yr over yr within the fourth quarter, in accordance with the earnings launch. For all of 2023, home comparable gross sales jumped 1.6% in comparison with a 0.8% decline in 2022, which was pushed by an prolonged droop in supply gross sales that carried into 2023.
- The redevelopment of the loyalty program in September accelerated the expansion of Domino’s Rewards membership. This system added 3 million members in 2023, and a pair of million of them joined after the September adjustments.
Dive Perception:
Domino’s Rewards has helped have interaction rare clients and carryout customers, Weiner mentioned. This system’s affect on gross sales was additionally strengthened by the chain’s emergency pizza promotion, which awarded loyalty members a free pizza at a later date once they positioned qualifying orders on-line. Weiner described the promotion, which ran between Oct. 9 and Feb. 24, as a “powerhouse” that drove signups for the loyalty program.
The Domino’s Rewards adjustments launched final fall included halving the minimal order spend wanted to accrue factors from $10 to $5; including 20- and 40-point redemption tiers; and increasing the kind of meals clients might redeem with 60 factors. Regardless of driving visitors and bolstering gross sales, this program successfully elevated the low cost charges to clients, contributing to a adverse affect on margins at firm shops, which fell 1.6% within the quarter. A few of that erosion was additionally attributable to larger insurance coverage prices, nevertheless, CFO Sandeep Reddy mentioned.
Reddy added that Domino’s plans to proceed emphasizing its rewards providing this yr, as “[loyalty] is a big pillar of how we wish to drive transaction progress in 2024, each in supply, in addition to carryout.”
This autumn was a troublesome quarter for visitors at many restaurant manufacturers throughout market segments, however QSR chains with sturdy loyalty packages navigated this problem nicely. Starbucks, which confronted boycotts by some shoppers, noticed its visitors really develop due to the resilience of its rewards members. With many chains getting ready to lift costs to protect margins as labor prices enhance, particularly in California, loyalty and well timed promotions will seemingly enhance in significance as visitors drivers this yr.
