Navigating the "Flagship Store Frenzy": Domino's China's Expansion and Hidden Concerns

2025 saw Domino’s China make a dramatic leap in store expansion. On January 9, Domino’s China’s regional master franchisee Dashang Co., Ltd. disclosed the latest operational data: by the end of 2025, Domino’s China had reached a total of 1,315 stores, adding 307 net new stores during the year, thus surpassing its annual store-opening target. The number of cities covered increased by 21, expanding to a total of 60 cities. Momentum continued into 2026—on New Year's Day alone, Domino’s opened 62 new stores in 46 cities, including first-time entries into 8 cities. Adding the 220 net new stores from 2024, Domino’s China nearly doubled its store count in just two years. This was accompanied by rapid user base growth: membership in the loyalty program “Darenhui” surpassed 35.6 million, attracting approximately 15.4 million new customers who placed their first order within one year. Domino’s China’s expansion strategy has clearly shifted its focus to the vast second- and third-tier markets beyond Beijing and Shanghai. Most new stores are located in shopping centers, leveraging the “first-store effect” to quickly establish a market presence. In October 2025, the first store in Xuzhou achieved over 680,000 RMB in sales on opening day. The first store in Dalian, which opened on New Year's Day 2026, set a new record of 700,000 RMB. Among Domino’s Pizza’s more than 21,700 global stores, 49 of the top 50 stores in first-month sales are in the Chinese market. However, “novelty consumption” often has a limited lifespan. After the initial buzz, stores still face competition in traffic and pricing from rivals. Longtime competitor Pizza Hut, supported by Yum China, is aggressively employing price war tactics: in the third quarter of 2025, its average customer price dropped to 70 RMB, down 12 RMB from the previous year. Domino’s China is clearly feeling external pressure as well. In the first half of 2025, its same-store sales growth dropped below -1%, the lowest since 2017. Domino’s China attributes this performance to the high base effect from the same period last year and notes that, excluding the impact of newly entered cities since 2022, its same-store sales growth in the second half and the full year of 2025 tended to stabilize. Structural pressures brought by falling prices and accelerated expansion may impact its profit model. The relatively high-cost direct delivery model is one of the core reasons for Domino’s ongoing profit pressure. Soo Securities food and beverage analyst Su Cheng points out, “The company still has room to grow its store base. It’s expected to reach 2,000 stores by 2027, and surpass 3,000 stores between 2029–2030, showing far more growth potential compared to Pizza Hut China.” He believes the recent decline in average order value is mainly due to new store supply tension and business structure adjustment; in the medium and long term, as new stores mature and delivery share recovers, average order values are expected to stabilize. Domino’s China still faces key decisions, including the traffic battle between proprietary channels and third-party platforms, balancing product innovation and cost control, and the trade-off between delivery reliance and dine-in experience. Risk warning and disclaimer The market involves risks, investment requires caution. This article does not constitute personal investment advice and does not take into account any individual user’s special investment goals, financial situation, or needs. Users should consider whether any opinion, view, or conclusion in this article fits their specific circumstances. Investing accordingly is at your own risk.