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What Drove Domino’s Pizza’s 2Q16 Same-Store Sales Growth?

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Same-store sales growth

Same-store sales growth (or SSSG) is expressed as a percentage. It’s a measure of the increase in revenue from a company’s existing restaurants over a certain period. Let’s take a look at Domino’s Pizza’s (DPZ) same-store sales growth year-over-year.

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2Q16 performance

In 2Q15, Domino’s Pizza had SSSG of 12.8%, 12.5%, and 6.7% for its company-owned restaurants, domestic franchised restaurants, and international franchised restaurants, respectively. In 2Q16, SSSG was 9.8%, 9.1%, and 7.1%, respectively.

In 2Q16, Domino’s SSSG was driven by traffic, since ticket size was flat. The following initiatives drove traffic at Domino’s restaurants:

  • reimaging of restaurants
  • increased investments in e-commerce and other technological initiatives
  • new digital loyalty program

By the end of 2Q16, nearly 60% of its US restaurants were remodeled.

Moving to digital innovations, the company has implemented a zero-click ordering system. It has also expanded its global online ordering platform to 22 countries.

For its new digital loyalty program, the company said the impact on traffic was in line with the company’s expectations.

In the international market, Alsea, a partner of Domino’s Pizza Group that operates franchised restaurants in Mexico, Colombia, and Spain, posted double-digit SSSG in 2Q16.

Peer comparisons

In 2Q16, SSSG for Pizza Hut, which operates under the umbrella of Yum! Brands (YUM), was flat. Papa John’s (PZZA) is expected to post SSSG of 2.3%.

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