Domino's Pizza sheds 10 per cent of customers after reducing discounts

Domino's, Australia's biggest pizza chain, has returned to profit despite a large proportion of its customers leaving over fewer discounts on offer from the business.

The company announced today net profit for the six months to December 28 was $40 million, compared with a loss of $22 million the previous year. Overall revenue dipped by 5.5 per cent.

Domino's, which operates more than 3800 stores in Australia, New Zealand, Asia, and Europe, last year announced a plan to slash the array of discounts and specials, and offer broader, cheaper prices.

READ MORE: Incoming blow to Aussie households 'inevitable' after hot inflation

Billionaire executive chairman Jack Cowin says the shift had caused about 10 per cent of customers to leave, but it would bring bigger longer-term profits, reports the Australian Financial Review.

"The customers that were formerly driven by price, you lose. We lose the top layer of price-driven people," he said.

The company's goal was for Domino's to return to a position of greater strength by next June, Cowan said.

But investors today failed to share his rosy outlook about Domino's future.

The pizza chain's share price slumped by 9.4 per cent to $19 in early trading on the ASX.

Cowin said Domino's would attempt to win back customers who had left through promotions without impacting profit margins.

"The challenge then is … how do you get that price-driven customer back, which was like 10 per cent of the business. How do we get them back on a sensible basis?"

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