Is the Pizza Party Over?
DPZ stock falls, BK tries gamification, Nimbus flies to Chicago, Prime Day sets record
You may have made it to the end of the week, but Domino’s stock sure didn’t… the pizza giant is looking awfully battered after its weak Q2. But read on for better news from Burger King, Amazon and Nimbus!
This week’s edition is brought to you by ChowNow.
Today:
Domino’s Stock Falls on Disappointing Outlook
Burger King Wants to Play a Game
Chart Time | Prime Day Gets Bigger
Nimbus Heads to the Windy City
FINANCE | Domino’s Net Income Up 30% but Trouble Lies Ahead
Domino’s Pizza released its Q2 2024 results, with net income income up 29.9% YoY to $109.4 million, and revenue up 7.1% to $1.09 billion. That growth was a tad illusory though, as the world’s largest pizza maker attributes almost the entire rise in net income to a $26.4 million change in the pre-tax unrealised gains and losses associated with the company’s partial ownership of DPC Dash, its operations in China. More worryingly, the company warned of slower growth in comparable sales in Q3, leading its stock to tank as much as 13%.
The Big Picture: The pain may last more than one quarter, with the company suspending its target of opening 1,100 global net new locations by 2028, which would have represented a 7.8% growth in international footprint. On the more positive side, its reinvestments in its loyalty program are paying dividends, with CEO Russell Weiner noting that “Orders with loyalty redemptions in the first half of this year are twice as high as they were under the old program in the first half of last year.” Domino’s doesn’t want shoppers to get too used to discounts, so moving forward it plans to have only one “Boost Week” — where it offers 50% off takeout orders — after having offered two per quarter previously.
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FIRST PARTY | Burger King Turns to Games to Drive App Usage
For smart operators, the name of the game is all about getting customers into your first party ecosystem, letting you control the relationship and marketing channel, while avoiding third party fees. Burger King thinks it’s found a fun way to drive new and repeat users to the BK app, while also drumming up attention for product launches: games. The QSR recently launched Balloon Burst to celebrate its 70th birthday, encouraging users to make accounts and claim perks / discounts for future orders. One month prior it had another limited edition game — Cloud Float — timed to promote an LTO slush drink of a similar name.
The Big Picture: As you can see from user generated videos, both Cloud Float and Balloon Burst are comically simple games, taking play mechanics that even a Baby Boomer would know well and slapping some BK branding on them. Evidently that’s good enough for fast food heads, as the Preston Nix, Director of Loyalty and CRM says “They start to come more frequently and they start to spend more, driving that stickiness of our brand. We’re in a hyper competitive industry and we’ve seen [gamification] drive up that positive sentiment towards the brand.” Imagine the results they’d see if they actually made these games fun…
CHART TIME | Amazon Logs Record Prime Day Sales
Amazon Prime Day spending jumped 11% to $14.2 billion, with shoppers spending on average $57.97 each. BNPL usage was also on the rise, hitting $1.08B, or 7.6% of sales. Part of Prime Day’s rapid growth can be explained by the fact that it’s no longer just a single day, and that more and more countries are now eligible to participate (although this year it wasn’t held in China, dropping the country count to 24.)
GHOST KITCHENS | Nimbus Expands to Chicago
NYC-based Nimbus has officially launched in Chicago, its first commercial kitchen-cum-food hall outside of New York City. Located at 820 N Orleans Street in the River North neighborhood, the facility contains 17 kitchen units, sized between 400 and 1,600 square feet, and features 246 feet of commercial hoods.
The Big Picture: Nimbus is quick to note that it doesn’t want to be called a ghost kitchen — their facilities are located on primer real estate, feature dining space for patrons, and some of its tenants instead use the space for catering or frozen food prep operations. Founder Camilla Opperman noted why these differences matter in her January interview with us. The company also has locked in some big partnerships with brands like DoorDash. Nimbus has been on a growth streak as of late, taking over spaces formerly operated by players like Kitchen United and Zuul.
A Few Good Links
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