Domino's Pizza: New Challenges and Opportunities in the Delivery Business

The influence of macroeconomic fluctuations and increasing competition is weighing on Domino's Pizza's delivery business in the USA, according to a recent analysis by Bernstein. The firm revised its price target for Domino's Pizza shares from 460 to 440 USD, while maintaining the "Market Perform" rating. Bernstein highlights that trends in the delivery service business outside of platforms like UberEats have turned negative, increasing pressure on the business model. Returning to the consumption patterns of 2022-23 requires new strategies to attract price-sensitive customers. Additionally, the one-time benefits expected for the fiscal years 2024 and 2025 might be lower after the initial benefits from aggregator channels. At the same time, Bernstein sees opportunities in the current market conditions: growth in the carryout service, focus on price-conscious offerings, and the revival of the "Emergency Pizza" offer could help Domino's secure market share. These factors, coupled with the company's scale advantages, are expected to be crucial for sustaining in a market where value and advertising play a significant role.