Domino’s cuts rates of large pizzas by 50% to compete with smaller rivals

Domino's Pizza has taken a significant step by slashing the prices of large vegetarian pizzas from Rs 799 to Rs 499.

In response to the dynamics of the quick-service restaurant (QSR) market in India, Domino's, a popular pizza chain, has reduced the prices of their large pizzas by almost half. According to a newspaper report, the pizza segment has become increasingly competitive due to the emergence of smaller and newer rivals such as Tossin, GoPizza, Leo's Pizzeria, MojoPizza, Ovenstory, and La Pino'z.

More significantly, the move by Domino’s signifies the need to adapt to evolving market conditions and cater to changing consumer preferences.

The strategic price reduction by Domino's Pizza is a reflection of the 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. This trend has now extended to the QSR industry in India, where Domino's, as a prominent player, is adapting its pricing strategy to remain competitive. Domino’s last week sent messages to its subscribers informing them about an “epic price drop on large pizzas”, the Economic Times reported on September 4.

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Moneycontrol could not verify the report independently.

Domino's Pizza has taken a significant step by slashing the prices of large vegetarian pizzas from Rs 799 to Rs 499, and that of non-veg large pizzas from Rs 919 to Rs 549, making them more affordable for customers, the report said. This strategic move is aimed at making Domino's pizzas more accessible and competitive, especially in the face of emerging and smaller rivals in the Indian QSR market. The parent company, Jubilant FoodWorks, was reticent from providing detailed comments due to the company's silent period ahead of quarterly results.

Jubilant FoodWorks posted a huge 74 percent year-on-year drop in net profit, amounting to Rs 28.91 crore, during the June quarter due to various factors, including challenging demand conditions and fierce competition within the QSR industry.

Also Read: Jubilant FoodWorks to invest Rs 750 cr capex in FY24; to open 220 Domino's Pizza outlets

Notably, many renowned Western-style QSR brands, such as Domino's, Burger King, Pizza Hut, and KFC, have witnessed a slowdown in sales over the past three quarters because of heightened competition from local players and the impact of inflation on consumer preferences. In response, these larger brands are adjusting their strategies by reducing prices, introducing more cost-effective product offerings, and expanding their presence into previously untapped cities to attract new customers.

Yum Brands-owned Pizza Hut is actively strategising its expansion by targeting markets with a population of more than a million and has taken a proactive step by promoting its "flavour fun" range, which is now priced at Rs 79, a substantial reduction from its previous price of Rs 200.

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The pizza market is becoming “highly cluttered” with regional chains accounting for nearly 30 percent of all outlets. “Home-grown brands like La Pino’z have scaled rapidly, more than doubling stores in three years,” the financial daily said, citing a report from IIFL Securities.