The Domino Affect: Time to Change

Michael Sanson EDITOR-IN-CHIEF [email protected] www.restaurant-hospitality.com

By now I'm sure you've seen the new Domino's Pizza commercial. It centers on changes the company has made to its product in response to customer comments. The commercial shows a focus group where people describe Domino's pizza crust as cardboard, its tomato sauce as tasting like ketchup, and its cheese as processed and tasteless.

The commercial cuts away to head chef Brandon Solano, who says that when he first heard the comments it was “shocking” to him. We also see Domino's president Patrick Doyle, who says the negative comments could have gotten the company down, but they are being channeled to “excite” and “energize” the organization.

Anybody who knows anything about quality food knows that Domino's pizza was simply awful. But anybody who knows anything about the foodservice business understands that when a company like Domino's can build nearly 9,000 restaurants, it has done something right. The only shocking part is how it could have been so successful with such an inferior product.

So, what gives? Sales trends at Domino's have been abysmal over the last few years in a market flooded with pizza competitors. It's 2010 and nearly everybody has tasted really good pizza. They know that what Domino's was serving wasn't even close.

I'm not writing this piece to criticize Domino's. In fact, I congratulate them for completely trashing their product and developing a new, better, more competitive version. I have little doubt that people who gave up on Domino's years ago will give them another chance. And that's my point.

Beginning on page 24, you'll find a state of the industry feature. After talking with numerous industry folks, several themes developed. The first is that most companies cut their operating costs to the bone in 2009 in response to the recession. Any further cutting this year could badly damage a company, so it's time to be creative and make positive changes to capture customer attention.

A second theme is that customers are seeking value more than ever before, and the Holy Grail in 2010 is to provide that value while making a profit. A more vital point is that price is not the number one consideration for many customers. Clearly, Domino's success was built upon a price structure that lured those who prize quantity over quality. But even the unwashed masses are now saying that if a food product doesn't taste good, they don't care how cheap it is. And they're saying it during a recession, which means they know they can get a better product at a low price.

These are trying times, and it's hard to win when customers want a good product for little money. This will be a hold-on-to-your-hat year, and the ones who get out alive will be the ones who make things happen. Domino's has made its move. What's yours?