The quick-service pizza landscape is shifting and Domino’s is at the center of it. Consumers are increasingly opting to pick up their pizzas instead of having them delivered.
According to Domino’s latest earnings call, carryout performance hit a record high, rising 5.8 percent.
“Our highest quarter of average carry-out time,” said Sandeep Reddy, chief financial officer at Domino’s, during the call.
Executives credit the uptick to its revamped Domino’s Rewards program and new promotions.
“We’re incredibly pleased with what’s happening with carryout. I think it’s really a testament to the loyalty program…we are seeing the frequency build compounding over time,” said Reddy.
Domino’s expects Rewards to be a multi-year sales driver, bolstered by national campaigns like the “Best Deal Ever” and the parmesan stuffed crust promo.
“Same-store sales accelerated to 3.4 percent for the quarter on the strength of our Parmesan Stuffed Crust pizza launch, which drove positive transaction counts,” Reddy added.
Also on the earnings call was CEO Russell Weiner. He emphasized that product launches are meant to be long term.
“When we look at New York style and we look at stuffed crust, these are not LTOs,” said Wiener. “When we do the research, we launch products that we think are going to stick around for a while, that we think will help us take market share.”
Looking at the company as a whole. In Q2, U.S. retail sales grew 5.1 percent, outpacing the flat QSR pizza category. This growth was driven by both same-store and net store growth.
Price matters
The shift to carryout isn’t just about perks, it’s about affordability. According to a study by PYMNTS, 58 percent of consumers choose pick-up to avoid delivery fees, and nearly half of all off-premises orders are now pick-up in the fast casual space.
Delivery isn’t going anywhere
Yet delivery remains a vital part of Domino’s strategy.
“Delivery was positive at 1.5 percent, and we saw improvement in both our own channel and aggregated delivery business,” said Reddy.
Domino’s expanded its delivery strategy through third-party partnerships like DoorDash and Uber Eats.
“We recently completed our national rollout with DoorDash, the largest aggregator in the U.S. This rollout went extremely well as we were able to apply learnings from our prior launch with Uber,” said Weiner. “We’ll now begin marketing on the platform with investments coming from both sides.
“All our stores were participating by the end of Q2, but we expect the majority of the volume push to come in the second half of the year. I’ll remind folks that DoorDash is about twice as big as Uber in pizza sales,” he added.
Carryout gains across the industry
Domino’s isn’t alone. Pick-up is also dominating independent restaurants, many of which are reverting to traditional service models.
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“We’ve been seeing a trend where indie operators are going back to how they functioned before the pandemic,” said Loren Padelford, CRO at Slice, in a former interview. “A lot of them are now offering first-party or pick-up, which was the model for 100 years.”
