Domino’s Pizza Inc. is among companies with higher sales, partly because of changes including a new recipe and commitment to accountability, said Malcolm Knapp, a New York-based consultant who has monitored the restaurant industry since 1970.
As its sales fell and its stock hit a record low of $2.83 a share in November 2008, the Ann Arbor, Michigan, chain spent millions in a “brutally honest” advertising campaign that said some people thought its “pizza sucks,” Knapp said. Then it offered a money-back guarantee and embraced social media and e- commerce to engage consumers.
“That was a very new proposition, but it worked because it was delivered in a marketplace where trust had evaporated,” Knapp said.
Domino’s shares have risen 75 percent this year, compared with 15 percent for Papa John’s International Inc. in Louisville, Kentucky, Bloomberg data show. Since the end of 2009, when Domino’s announced its plans, the stock has gained 233 percent, compared with 37 percent for its rival. Domino’s is scheduled to report third-quarter earnings tomorrow.