Domino’s, Sonic, Other Brands Launch Deals to Woo Inflation-Concerned Consumers

As restaurants note inflation’s impact on consumer behaviors, with rising prices threatening customer loyalty, some major brands are addressing the challenge by leaning into it, absorbing more of the price increases to advertise low-price deals and promotions.

Domino’s Pizza, for its part, announced Monday (June 6) that it is offering 50% off pizza for digital orders through June 12. This initiative has the added advantage of not just attracting cost-conscious consumers but also incentivizing the adoption of digital ordering channels, which are more efficient for the brand from a labor perspective than in-person orders and enable the brand to learn about customers and build an ongoing relationship.

“With wallets being squeezed and summer gatherings starting up, we thought this was a good time to bring back this tremendous deal,” Joe Jordan, Domino’s president, U.S. and global services, said in a statement. “With half off pizza, everyone can celebrate with a food they love at a great price.”

The news comes the same day as drive-in brand Sonic’s addition of new value-centric menu items, days after casual dining giant Chili’s announced its “3 for Me” value meal deal and months after quick-service chain Del Taco announced the launch of its 20 Under $2 Menu.

By the Numbers

The Consumer Price Index for All Urban Consumers (CPI-U), reported by the U.S. Bureau of Labor Statistics (BLS) in mid-May, revealed that food away from home (i.e., restaurant) prices rose 0.6% month-over-month in April and 7.2% year-over-year.

Some foods’ prices are inflating especially quickly. The May 2022 Food Price Outlook news release from the U.S. Department of Agriculture (USDA) Economic Research Service (ERS) notes that, over the course of the year, wholesale dairy prices are expected to rise 13-16%; wholesale poultry prices are expected to increase 15-18%; egg prices are expected to increase 19.5-20.5%; and farm-level egg prices are expected to skyrocket 73.5-76.5%.

What Insiders Are Saying

Inflationary challenges are such that some restaurant brands are regularly rethinking their menus to focus on lower-cost foods as prices fluctuate. James Marcus, partner and operator of Capital Tacos, a fast-casual Tex-Mex restaurant chain in Florida, contended in an interview with PYMNTS that brands must be vigilant about tracking these changes.

“We have to look at our individual components of our business, all day, every day,” he said. “Now, you can’t set your menu and forget it. … You set your menu, and then you look at your suppliers and decide what change you need to make on a pretty much every shipment basis.”

Read more: For Restaurants, Inflationary Challenges Prompt Menu Creativity

David Bloom, chief development and operating officer of fast-casual sandwich chain Capriotti’s and its subsidiary, Wing Zone, argued in an interview with PYMNTS that, given the unpredictability of price changes, restaurants must invest in initiatives that will prepare them for any eventuality.

“We don’t really know what’s going to happen,” Bloom said. “We do know commodities are probably not coming down in the short term. I think we’ll find we once again have to quote-unquote ‘pivot’ many times, … but certainly nobody knows. And with everything from inflation to recession to geopolitics being what it is, we just have to have a strategy in place ready to go regardless of what happens.”

Related news: For Restaurants, Consumers’ Inflation Concerns Prompt Renewed Focus on Pickup Channels