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05/03/2021

Domino's to Continue Carside Delivery

As restaurants nationwide struggle to find staff, Domino’s has announced it will market its "critical weapon" to drive-thru-oriented consumers.
Anna Wolfe
Senior Editor - Restaurants
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Born out of COVID-safety concerns, Domino's debuted Carside Delivery last June and it “will remain an important part of our strategy as we continue to evolve the carry-out experience; not only to enhance the loyalty of our current carry-out customers, but also to reach a new, different, and largely untapped drive-thru oriented customer, going forward,” said CEO Ritch Allison in a Q1 earnings call with analysts.

For Domino’s, carside delivery is “a critical weapon …that's really a great tool for us as we compete for carry-out business against the drive-thru lanes of other QSR concepts,” he said.

Carside also taps on-location staff and doesn’t rely on a delivery driver. As the economy reopens, restaurants nationwide are struggling to find employees to hire. Taco Bell, for example, announced a goal to hire at least 5,000 new team members.

“The combination of COVID, strong sales, the broader economy reopening, and the high level of government stimulus, it's creating one of the most difficult staffing environments that we've seen in a long time,” said Allison.

a person in a blue uniform

Increasing Staff Efficiency with Tech

Even with limited staff, restaurants have to be focused on delivering great customer service.  “I think everybody sees a lot of the technology investments that we make on the front-end,” said Stu Levy, Domino’s Executive Vice President-CFO, in the earnings call. “There is a lot that we do on the back-end to try and improve the efficiency of the labor in store … So, whether it's tools related to the make-line or other initiatives that we're doing to try and drive throughput in the stores and trying to reduce the labor required on a daily, hourly basis, (the labor shortage is at) the forefront of everybody's mind right now.”

Domino’s is using tech to maximize the efficiency of the workforce it does have to provide better CS.

The result has been 0 change in service times “which for us is not good enough because they've got to … continue to get faster,” said Allison. “We've absorbed the volume without any material change in the service times, but we got to get faster.”

The Plan to Gain Market Share

Allison shared three ways Domino’s plans on gaining more market share in the future. 

Fortressing:  "It sets us up extremely well to compete in 2021 and beyond, as we continue to drive lower relative costs, better service, higher runs per hour, and therefore, better economics for drivers, along with meaningful, incremental carry-out within our stores in fortress territories."

Delivery: “We've got to continue to offer great value to our customers and terrific service to continue to gain share on the delivery side. And we've talked about how fortressing helps that over time."

The real pinch point in the business is drivers.

Technology:  Domino’s will continue to invest in technology initiatives and operating practices, procedures to continue to improve customer service. "The real pinch point in the business is drivers," said Allison. "…We continue our work around fortressing to give drivers more deliveries per hour, which translates into higher wages. We're working on technology and operating practices that keep drivers in their cars. So, imagine a world where they don't come back into the store. We run the pieces out to their cars and they go and take the next order. So, we're trying to work on those economics for our drivers to keep them busy and earning higher-level wages."

Q1'21 Highlights

  • Domino's Pizza Inc. reported that during Q1, U.S. same store sales grew 13.4% versus Q1 ‘20. International business also posted strong results, with same store sales growth of 11.8%.
  • Q1 marked the 109th consecutive quarter of international same store sales growth and the 40th consecutive quarter of U.S. same store sales growth.
  • Revenues increased $110.6 million, or 12.7%.
  • Net Income decreased $3.8 million, or 3.2%