The No. 1 company in market share growth among restaurants, Domino’s is out to conquer the world. The company plans to add nearly 10,000 stores worldwide over the next seven years and grow by 60 percent. That includes opening new markets as well as in-filling existing markets, a process the company refers to as “fortressing.”
“The reason we want to achieve that goal is it creates a virtual cycle in our business, and it starts with winning in every neighborhood in every market,” says Domino’s CEO Richard Allison. “You don’t get to be dominant number one in the world without being dominant in every neighborhood. It’s about having the highest delivery sales and carryout per household.”
The company is now more than 65 percent digital in its U.S. business, Allison says. It is also establishing an innovation laboratory at headquarters in Ann Arbor, Mich., to work on such projects as a new point-of-sale system, enhancements for its phone apps and back-of-the-house technology.
Domino’s ambitious plans have received mixed reviews from investors and analysts. Following a conference call with senior management, some Wall Street securities analysts raised their ratings on the company because of improvement in company operations in Europe, Japan, Australia and New Zealand.
Other analysts see problems with the company’s sales projections in the short term and the potential for cannibalization of U.S. sales and franchisee profitability created by its “fortressing” expansion. Still, analysts at Morgan Stanley say, “Domino’s has a long-term defensible business model, with a superior consumer value proposition and the ability to continue taking share in the most fragmented segment in fast food.”
Chipotle Mexican Grill has spent the last five years addressing sanitation issues in its supply chain and foodborne illness issues at its restaurants. Chipotle cruised into 2019 as something of a Wall Street darling: Shares of its common stock rose as much as 65 percent in the early months of this year, with some forecasts saying it could keep rising.
In the spring, however, another kind of illness affected the company’s stock prices: The disease, called African swine fever, has already wiped out nearly a third of China’s pig population. The ripple effect of rising pork prices around the world could have a direct impact on Chipotle, though the company says there is no reason for concern. Spokeswoman Laurie Schalow says the company buys “higher quality, more expensive pork than commodity pork” of the type involved in the African swine fever outbreak.