Domino’s 4Q22 Carryout Comp was Up +14.3%, Delivery Comp Declined -6.6%

Feb 27, 2023 | Corporate Insights, No Bull Economics

Domino's 4Q22 Post Banner

Internal research shows a 2022 high-single-digit decline in industry delivery sales (both pizza QSR & nonpizza QSR) reflects pressure from the high cost of fees & tips, prompting more people to eat at home.

Domino’s Sales

  • 4Q22 system comps increased +0.9% (up +13.1% on a 3-year basis), driven by +6.3% in pricing which offset softening demand for delivery (pressured by macroeconomic challenges during the holidays) & its “fortressing” development strategy which represented a -50 bps headwind.
  • Management indicated that its price increases may have been too aggressive as many customers want something other than medium 2-topping pizzas available on its $6.99 Mix-and-Match value platform.
  • Its carryout comp was +14.3% during the quarter (+31% on a 3-year basis) while delivery comps declined -6.6% (+3.3% on a 3-year basis). Carryout now drives 50% of orders & 40% of mostly incremental sales. 
  • Domino’s has the #1 domestic share in both delivery & carry-out pizza. The domestic QSR pizza category grew +10% versus pre-covid levels & Domino’s gained 3% share points during that time. Its carry out market share is up +2% in 2022 (+5% on a 3-year basis). Its market share in total pizza QSR (including delivery, carryout & sit-down) held steady during 2022 & is up +3% on a 3-year basis.
  • Notably, the QSR pizza carryout segment is significantly larger than QSR delivery.

Domino’s Operations, Margins & Facilities

  • While Domino’s service times are improving, they have not returned to 2019 levels.
  • Turnover is down & job applications are up.
  • Half of the system stores currently are on call centers.
  • Domino’s market basket pricing increased +12.5% during the quarter.
  • Food inflation is expected to increase +3% to +5% during 2023.
  • 2022 AUV was $1.3MM with a $137,000 average store-level EBITDA (just slightly below the 2019 $143k level), reflecting the benefit of its carryout Mix & Match offer price increase to $6.99 from $5.99. 2023 EBITDA is expected to increase y/y.
  • Management maintains that the U.S. can be an 8,000+ store market & new store openings paybacks have remained strong with stores opened in 2019 averaging 3-year paybacks like its 2018 vintage.
  • Corporate refranchised 114 company-owned stores in Arizona & Utah for $41.1MM during the quarter.
Domino's 4Q22 Financials
Domino’s 4Q22 Financials
Restaurant Research

Email Sign-up

15 Second Posts

What is Fixed-Income Issuance Dominated by?

Total U.S. fixed income (FI) issuance declined -34% y/y to $8.8 trillion during 2022 as interest rates ramped up.

Bank Deposits Growing Much Faster than Business Loan Demand

Banks have been parking excess deposits in various forms of government debt that are subject to interest rate risk & in risky crypto bets. This is causing systematic risk.

Nerdwallet Survey Shows an Indebted & Very Stressed Consumer

Consumers are combating the higher price of living & higher interest rates by driving less, buying store brands & taking on more debt.

The United States of America is Worth Saving

Americans need to be reminded about our heritage as the single most productive nation as measured by GDP/person with a unique capability to bless the entire world if we can simply get back to business.

Should Private Banks Go Extinct?

Since the 2008 Great Recession, 134 banks with assets of $1.25 Trillion have been closed by regulators. At the same time, the Fed’s ballooning balance sheet now amounts to nearly 50% of total domestic bank deposits.

What Happened to Silicon Valley Bank?

Don’t assume that SVB’s difficulties are symbolic of the entire banking industry.

What Does the End of the Petrodollar Mean?

The Saudi minister of finance announced that the Kingdom was ending the petrodollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal”. Yikes!

Senator Kennedy Schools Country on Economics 101

We have a choice of how to tame inflation, cut government spending, or throw people out of work.

Inflation is Marginalizing Purchasing Power from the Lower-Income Demo

As households with annual incomes >$70k drive 62% of total food-away-from-home sales, it is more important than ever to focus on this demo especially as spending from the lower-income demo slows.

A Look at Consumer Expenditures by Category

You can learn a lot about someone by how they spend their money…

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company