Domino's CEO slams the summer of value meals
The pizza chain saw the number of orders grow across all income groups, even amid a wider fast-food spending slowdown.
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- Domino's CEO criticized the value meals offered this summer by competitors in a Bloomberg interview.
- While most companies are reporting slowdowns in fast-food spending, the pizza company saw order growth.
- Domino's stock is up 3% year-to-date, unlike shares of Wendy's, McDonald's, and Burger King.
According to Domino's CEO, smaller burgers are no way to make people happy.
In an interview with Bloomberg, Russell Weiner took aim at the size of his competitors' value meals, which often include burgers. The biggest fast-food companies are promoting discount deals in the US this summer, hoping to draw in inflation-weary consumers who have been spending less.
Meanwhile, Domino's saw the number of orders rise across all income groups, it said in a second-quarter earnings report last week.
That's thanks to Domino's decision to provide discounts on a wider menu, unlike some of its fast-food competitors that are only marking down a few items, Weiner told Bloomberg.
"It's like, 'Hey, the rest of our menu is expensive, but you can get this one thing you may or may not like cheaper,'" Weiner said. "If you want a big sandwich and you end up getting a little sandwich cheaper, you're not happy."
Domino's launched a $6.99 meal that lets customers buy any two items, including pizzas and cheesy breads.
Domino's kicked off the year with a similar promotion: a large pizza with two toppings at $6.99, in contrast with its burger-chain competitors, which mostly began promotions in the summer.
The CEO added that other growth came from regulars ordering more frequently, as well as more first-time orders. Domino's has also raised prices less quickly than its peers in the last few years, Weiner said.
Weiner's comments come during a summer of value meals in the US — with nearly every major outlet creating bundles to attract price-sensitive customers.
Wendy's, Burger King, and Taco Bell have launched versions of meals under $7. McDonald's, which was one of the first to launch a $5 meal, will extend its offer until August.
For example, McDonald's version offers customers either a McChicken or a McDouble — and four-piece McNuggets, fries, and a small drink for $5.
Domino's stock is also fairing better than other fast-food giants.
It is up about 3% year-to-date, while Wendy's and McDonald's have both seen a 14% slide from the beginning of the year. Burger King's parent, Restaurant Brands International, has fallen 9% in the same time period.
Still, a better value strategy has not been enough to fully satisfy Domino's investors.
The company's shares fell 14% on July 18 after it reported earnings and said that it would shutter about 100 stores in Japan and France run by its international franchisee.