Domino’s Pizza Enterprises has admitted that it has lost one in 10 customers as a result of scaling back widespread discounting, as Australia’s largest pizza company traded sales volume for improved margins and increased franchise partner earnings.
The ASX listed company, which owns the Domino’s franchise in Australia and operates Domino’s stores in Europe and Asia, said that the shift away from “blanket discounting” was a key part of its reset.
This approach has helped to drive franchise partner earnings to their highest level in three years, despite a decline in order volumes.
For the six months to 28 December 2025, Domino’s reported underlying earnings before interest and tax of $101.5 million, an increase of 1.0% on the previous corresponding period.
Network sales declined 1.6% to $2.04 billion and same store sales declined 2.5%.
The interim dividend was increased to 25.0 cents per share while average franchise partner EBITDA increased 4.5% to $103,000 on a rolling 12 month basis.
But executive chairman Jack Cowin said the move away from deep discounting had pushed out the most price sensitive customers, leaving a short term gap that the company now seeks to fill with more targeted offers that will still deliver profits for franchise owners.
“We’ll be doing more targeted promotions, rather than going back to heavy discounting,” he said.
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Australia and New Zealand were among the weaker regions in the half, but Europe was a bright spot with improved performances in Germany and Benelux, according to the company’s market update.
Investors were not so sure. Domino’s shares fell heavily on Wednesday following the result and the soft start to the second half with the company reporting a 7.2% decline in same store sales in the first eight weeks.
Domino’s maintained its full year guidance and said it was committed to disciplined execution, debt reduction and rebuilding demand on a more sustainable basis.
