Domino's revamps pizza recipe amid competition

Wed Dec 16, 2009 2:21pm EST

Related Topics

 * Company tied for last place in terms of taste
 * Analysts call the move a calculated risk
 * Domino's shares fall 1.3 percent
 By Lisa Baertlein
 LOS ANGELES, Dec 16 (Reuters) - Domino's Pizza Inc (DPZ.N),
the U.S. pizza delivery chain that earns high marks for
convenience but low grades for taste, is revamping its pizza
recipe as it tries to take a bigger slice of consumers'
wallets.
 Domino's is making its pizza crusts more garlicky, tweaking
its tomato sauce and upgrading its cheese. The new pizzas will
be sold in all U.S. outlets by Dec. 27.
 Domino's and rivals Papa John's (PZZA.O) and Pizza Hut
(YUM.N) are battling not only each other but improving frozen
offerings from the likes of Kraft Foods Inc KFT.N as
recession-weary diners continue to look for inexpensive meals.
 Research firm Brand Keys said Domino's is the No. 1 ranked
pizza chain overall, but that when it comes to taste it is tied
for last place with children's pizza party chain Chuck E.
Cheese CEC.N.
 Fixing that weakness is Domino's biggest opportunity to
steal share from rivals, said Robert Passikoff, president of
Brand Keys.
 "Does it change the game for them? I think it does,"
Passikoff said.
 Feltl and Co analyst Mark Smith called Domino's move a
calculated risk.
 "When you're down toward the bottom of the pack, it's hard
to fall much further," said Smith, who added that while
Coca-Cola Co (KO.N) was unsuccessful in changing the formula of
its namesake flagship beverage, Hardee's CKR.N improved its
fortunes by beefing up its menu with bigger, higher-quality
hamburgers.
 Domino's representatives said the company spent two years
working on the recipe relaunch and that the related financial
investment was "much larger" than what it spent on prior food
launches.
 They declined give specifics on the budgets for research
and development or the planned advertising campaign, which will
feature promotions on social networking outlets like Facebook
and Twitter as well as on popular television and sports
programs.
 The big three U.S. pizza chains -- Domino's, Papa John's
and Yum Brands Inc's Pizza Hut -- are running specials that are
virtually indistinguishable as restaurant discounting runs
rampant across the United States.
 The pizza chains are particularly closely matched rivals.
 For example, Passikoff said, Domino's ranks a close second
to Pizza Hut in terms of value, while the two chains share the
top ranking for location and service.
 Papa John's is No. 1 on taste, No. 3 on value and just
behind Pizza Hut and Domino's on location and service.
 Pizza Hut, which lately has been struggling in the United
States, ranks No. 3 on taste. [ID: nN04154847]
 Shares of Domino's were down 10 cents, or 1.3 percent, at
$7.73 on Wednesday afternoon. Papa John's shares were down 1.7
percent, while shares of Pizza Hut parent Yum were up 0.2
percent.
 (Reporting by Lisa Baertlein, editing by Matthew Lewis)


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Comments (2)
ADavila09 wrote:
I am against Domino’s altering its recipe. If they want to try something new to try and boost sales then they should make it optional to customers. Automatically switching to a new recipe is the wrong way to go. I prefer the original recipe and would be disappointed if these changes were to become permanent.

Dec 17, 2009 12:47pm EST  --  Report as abuse
LightsOfTime1 wrote:
I look forward to the change in recipe, as I’m getting tired of pizza.

Dec 17, 2009 3:28pm EST  --  Report as abuse
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