America's Largest Pizza Chain Had Its Worst Sales In Over a Decade
America's beloved pizza giant Domino's may still be the most powerful quick-service pizza brand in the country (and the world), but the chain's streak of skyrocketing domestic sales has come to an end. After seeing some of its best performance in brand history during the pandemic, Domino's has now come upon its biggest sales decline in over a decade.
Turns out the demand for Domino's pizza is finite after all. The chain just posted its results for the first quarter of 2022, which showed its U.S. same-store sales slipping by 3.6%. This is the second time the chain has had a decline in this metric in the last three quarters, demonstrating challenges with staffing and surges in the Omicron variant have become too great a challenge for the chain to overcome unscathed.
In contrast, 2020 was a year of success that Domino's won't soon forget. The company reported an incredible 16% increase in overall sales in the months immediately following the lockdown period, while the spring and summer sales were its best in more than a decade. This was back when the pandemic created a major gap between chains that were ready to take on delivery in a big way, and those that were not. Clearly, Domino's had found itself on the right side of the delivery equation.
However, as the pandemic began waning, so did the chain's sales. In the third quarter of 2021, Domino's posted its first domestic sales decline in over a decade. Same-store sales were down just under 1.9% at U.S. locations compared to the same time in 2020, though the chain was still up by more than 15% when compared to 2019.
This second, much more significant decline is mostly tied to the company's shortage of delivery drivers and waning demand for delivery pizza—factors that may continue to impact the pizza chain's bottom line.
"We faced a number of headwinds in the first quarter, from the omicron surge, to staffing shortages, to unprecedented inflation, which pressured our results," said CEO Ritch Allison. "We are actively implementing strategies designed to address them. However, we expect some of these headwinds are likely to persist further into 2022."