(Bloomberg) -- The Chinese franchisee of Domino’s Pizza Inc. is accelerating store expansions as consumers outside the country’s top cities show a bigger appetite for western food.

The pizza chain wants to tap demand for fast food among residents in less prominent Chinese cities and towns that aspire to the lifestyle of glitzy megacities, Aileen Wang, chief executive officer of DPC Dash Ltd, also known as Domino’s Pizza China, told Bloomberg in an interview in Shanghai Thursday.

“When the income levels among lower-tiered city consumers go up, their interest in western food rises as well,” Wang said. “When we enter new markets, local consumers line up in long queues and wait to try the food influencers share on social media.”

As the US pizza brand’s master franchisee in mainland China, Hong Kong and Macau, DPC joins other western fast-food chains including KFC and Pizza Hut under Yum China Holdings Inc. and McDonald’s Corp. in expanding in China at the fastest clip ever.

That has seen these restaurants opening stores in lower-tier Chinese cities in which western brands previously had zero presence, and bringing them in direct competition with local rivals that started out imitating their western offerings but over the years innovating their food with Chinese twists.

Last year, DPC opened a total of 180 new outlets in the mainland — its fastest pace of restaurant rollouts in its nearly 30-year history in the country. The company had its debut listing in Hong Kong in March 2023, with shares rising 9% since then. It was the third-largest pizza brand in China in terms of revenue in 2022, according to its IPO filing.

About 80% of the new outlets are located outside megacities Beijing and Shanghai, which currently contribute to about half of the company’s total sales, Wang said. The network expansion will continue this year, with a goal of opening another 240 outlets to give the company a mainland China store count exceeding 1,000 by the end of 2024. Another 300 to 350 new stores will be opened annually in the next two years, she said. 

The shifting focus of some of the world’s biggest restaurant chains to millions of residents in smaller cities with more modest incomes comes as a property meltdown and white-collar job cuts have dampened consumer sentiment in large cities. Cost-sensitive consumers have led to a price war among food and beverage brands. Foreign retailers, who once positioned themselves as premium brands, are now working to lure budget-minded Chinese. 

In a market awash with promotions, DPC has been offering 30% discounts for all Domino pizzas every Tuesday and Wednesday to compete against bigger rivals like Pizza Hut and local competitor Champion Pizza for budget-conscious eaters. That strategy, which sees a 9-inch pizza selling at less than $4 in China, will be here to stay, Wang said.

While highlighting its speedy delivery in top Chinese cities, Domino wants to position its food as more of an upscale meal as it penetrates further into small towns, Wang said. 

DPC reported revenue growth of 51% for 2023, the highest in the past four years. It was profitable for the first time last year, posting adjusted net profits of 8.8 million yuan.

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