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Ben covers the property industry and has a keen interest in entrepreneurship and travel writing. He speaks Mandarin and previously covered housing and urban affairs for The Australian Financial Review.

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Fancy crusts at 10 paces: Domino’s Pizza takes aim at gourmet rivals

Published 11 March 2013 11:48, Updated 12 March 2013 07:21

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Fancy crusts at 10 paces: Domino’s Pizza takes aim at gourmet rivals

Domino’s hopes flash ingredients, like Shiraz-infused lamb or pork belly, will entice customers to spend more.

Domino’s Pizza chief executive Don Meij is hoping to steal market share from other fast-food groups by releasing a new range of pizzas that focus on quality over size.

The company is under pressure to boost its same-store sales growth after reporting disappointing numbers in its interim results last month, with same-store sales growth dropping to 1.5 per cent from 8.4 per cent in the first half of the 2012 financial year.

Domino’s has released a new Chef’s Best range of pizzas, which will be smaller than others at a comparable price but have more toppings. The topping will include ingredients such as Barossa Valley shiraz-infused lamb and pork belly, but at a cheaper price point than premium pizza houses like Crust.

“We’re so large in the pizza category, we’re not trying to take more pizza share,” Meij tells BRW. “We want to reposition pizza as the best value food in the marketplace. Better value than hamburgers, better value than fried chicken, better value than sandwiches.”

He says the company’s growth prospects in Australia are strong, with 170 stores still to open here. By diversifying the range of options the aim is to increase the “basket size”, or the size of individual orders.

“That’s mostly happening through more site items and continually evaluating our products,” Meij says. “Customers are getting more, therefore the basket is getting bigger, which is our average ticket and that’s real growth.”

Meij copped some flak for talking up the announcement as a “game changer” in the pizza industry, with social media followers commenting that they were expecting something more than a new range of pizzas.

Morningstar equities analyst Michael Higgins says the bad press will blow over. “I don’t think this would see many people turning away from Domino’s,” he says. “Although they have received negative press from this, they are still in the media, and they are still the No. 1 pizza house in Australia.”

He says increasing the company’s range and add-ons like cheesy crusts are an effective way of increasing margins. This is particularly the case with the company’s sophisticated online platform, where extra dollars are added to the price tag with a click instead of tiresome fast-food outlet questions like, “Would you like fries or a drink with that?”

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