Prominent pizza chain Domino’s has slashed prices of its large pizzas by nearly half.
The move comes in response to growing competition posed by local players in the quick-service restaurant (QSR) market in the country.
Domino’s response also highlights the need to adapt to changing market conditions along with changing consumer preferences.
Local chains taking away business
It also reflects a broader trend in the fast-moving consumer goods (FMCG) sector, where local players are increasingly challenging established brands and even surpassing them in specific markets.
The pizza segment in particular has become increasingly competitive with the emergence of smaller and newer rivals such as Tossin, GoPizza, Leo’s Pizzeria, MojoPizza, Ovenstory, and La Pino’z.
New prices
Domino’s is responding accordingly by adapting its pricing strategy to remain competitive.
Last week it sent messages to its subscribers informing them about an “epic price drop on large pizzas”.
It slashed prices of large vegetarian pizzas from Rs 799 to Rs 499, and that of non-veg large pizzas from Rs 919 to Rs 549.
Huge drop in net profit
The parent company Jubilant FoodWorks refrained from providing details due to its silent period ahead of quarterly results.
It posted a huge 74 percent year-on-year drop in net profit, amounting to Rs 28.91 crore during the June quarter.
This can be attributed to various factors such as challenging demand conditions and as earlier mentioned, fierce competition within the QSR industry.
Other western brands
Other Western-style QSR brands, such as Burger King, Pizza Hut, and KFC, have also witnessed a slowdown in sales over the past three quarters due to heightened competition from local players and the impact of inflation on consumer preferences.
They have employed strategies such as reducing prices, introducing more cost-effective product offerings, and expanding their presence into previously untapped cities to attract new customers.
Pizza Hut
Rival Yum Brands-owned Pizza Hut is actively expanding by targeting markets with a population of more than a million.
It has also been promoting its “flavour fun” range, which is now priced at Rs 79, a substantial reduction from its previous price of Rs 200.
