👉 Background: Domino’s (known as Domino’s Pizza Enterprises on the ASX), is Australia’s largest pizza chain with more than 3,500 outlets sprinkled across Australia, NZ, Europe, and Asia. During COVID, Domino’s was hotter than a spicy Meat Lovers pizza as demand skyrocketed and its shares hit a record $161.

👉 What happened: Recently, Domino's share price has dropped to around $15, and it doesn’t look like it’s going to get better any time soon. Domino’s warned that it suffered a $3.7 million loss in the last financial year, which is its first annual loss in two decades. In fact, last financial year, it earned a $92 million profit.

👉 What else: The loss was mainly because it spent $120 million closing 312 underperforming stores. Now, Domino’s is planning to reset everything in FY26 by ditching confusing discounts and vouchers. They plan to lean into “everyday low pricing”.

‍What's the key learning?

‍💡Everyday Low Pricing (EDLP) is a retail strategy where companies commit to offering consistently low prices rather than relying on promotions or discounts. Discounts and promotions might boost sales in the short term, but it also trains customers to only buy when there’s a deal.

💡In fact, Procter & Gamble in Germany ran a test on their products to see which pricing strategy was more effective. Some products were on EDLP and other products were using the high-low approach. They found that EDLP led to higher loyalty and higher repeat purchases than the high-low strategy.

💡So while Domino’s might be known for its promotional pizza deals, it may need to change its appeal and focus on competing on taste instead.