Crossing the "First Store Carnival": Domino's China Expansion and Concerns

In 2025, Domino's China achieved a rapid expansion in store scale.

On January 9, the regional franchisor of Domino's China, Dashih Holdings, disclosed the latest operational data: by the end of 2025, the total number of Domino's stores in China reached 1,315, with a net increase of 307 stores throughout the year, exceeding the annual opening target.

The number of cities covered increased by 21, expanding to a total of 60 cities.

The momentum continued into 2026, with 62 new stores opened on January 1 alone across 46 cities, including 8 cities that were entered for the first time.

Including the net increase of 220 stores in 2024, Domino's China nearly doubled its store scale in just two years.

Simultaneously, the user base rapidly expanded, with the membership program "Da Ren Hui" surpassing 35.6 million members, attracting approximately 15.4 million new customers to place their first orders within a year.

Domino's China's expansion strategy has clearly shifted 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 gain traction.

On the opening day of the first store in Xuzhou in October 2025, the revenue exceeded 680,000 yuan. The first store in Dalian, completed on New Year's Day 2026, further set a new record of 700,000 yuan.

Among the over 21,700 Domino's stores worldwide, 49 of the top fifty stores by sales in the first month were created in the Chinese market.

However, "trial consumption" often has a time sensitivity. After the initial wave of popularity, stores still face competition from peers in terms of customer flow and pricing.

Old rival Pizza Hut is implementing an aggressive pricing strategy under the push of Yum China: the average transaction price in the third quarter of 2025 has dropped to 70 yuan, a decrease of 12 yuan compared to the same period last year.

Domino's China has clearly felt external pressure as well. In the first half of 2025, its same-store sales growth fell below -1%, the lowest since 2017.

Domino's China attributed this performance to the high base effect from the same period last year and pointed out that if excluding the impact of new cities entered after 2022, its same-store sales growth in the second half of 2025 and for the entire year is expected to stabilize.

The structural pressure from declining prices and accelerated market penetration may impact its profit model. The relatively high-cost direct delivery model is one of the core factors putting long-term pressure on Domino's profitability.

Soochow Securities food and beverage analyst Su Cheng analyzed: "The company's store scale still has room for growth, and it is expected that the number of stores could reach 2,000 by 2027, and is likely to exceed 3,000 by 2029-2030, indicating significant expansion potential compared to Pizza Hut China."

In his view, the recent decline in average sales per order is mainly affected by tight capacity in new stores and adjustments in business structure; in the medium to long term, as new store operations mature and the proportion of delivery increases, the average sales amount is expected to gradually stabilize.

The dynamic balance between traffic competition between self-owned channels and third-party platforms, product innovation and cost control, as well as the trade-offs between reliance on delivery and dine-in experience, remain considerations that Domino's China must face