Dominoes (DPZ) – Get the report from Domino’s Pizza, Inc. builds his business on delivery. In its early days, the company had a 30-minute delivery promise – which it had to abandon because it led drivers to make dangerous decisions. In recent years, he’s relied on his ability to bring pizza just about anywhere.
Delivery has carried Domino’s business through the pandemic. People couldn’t leave their homes like they used to and the pizza chain offered an inexpensive, convenient and comforting option. This led to very strong sales, which has generally been the case for the chain.
Now, however, Domino’s has a delivery problem that they can’t blame on The Noid. The company cannot find enough workers to deliver its pizzas and takes a number of steps to solve the problem.
Domino’s subtly discourages delivery
The pizza chain cannot directly tell its customers not to order for delivery. Instead, he should encourage them to pick up their orders. That’s something Domino’s has been aggressive about, according to retired chief executive Ritch Allison’s comments during the chain’s fourth-quarter earnings call.
We increased awareness of Domino’s Carside Delivery during the fourth quarter with our two-minute Carside Delivery guarantee. I continue to be satisfied with our Carside Delivery performance. Our research shows that it attracts both existing and new customers. And we have always spent an average of less than two minutes at the door and in the way of our customers’ cars.
Allison also clarified that Domino’s intended to use the prizes to encourage customers to pick up rather than have food delivered.
During the fourth quarter, we went on air to launch three great new products to support our signature $7.99 offer. We call them Dips & Twists, and they hit the mark for great taste and consumer appeal with awesome savings for our franchisees. The results indicate that these products contributed significantly to the growth of our on-the-go tickets in the fourth quarter, as many customers added these additional items to their orders, resulting in the smart ticket growth that we have been focusing on. so focused.
Domino’s has also made some of its best deals available only through online ordering (which costs the business less because no one has to answer the phone), only for pickup. The chain recently made its $7.99 take-out offer available only through online ordering.
“This supports a balanced approach of bringing value and a great experience to our online customers while supporting our goals of growing the digital delivery business and supporting the profitability of our takeout orders,” he said. -he declares.
“Online takeout orders generate a higher ticket and require a lower cost of service than takeout orders over the phone, in addition to driving digital engagement and the ability to add members to our loyalty program. “
Domino’s literally started paying customers to pick up their orders by offering a $3 “tip” for every online order.
“This approach is also intended to drive repeat purchases, as the tip comes in the form of a coupon that the customer can use on their next order,” Allison added.
Staffing boosts Domino’s business
Allison made it clear that Domino’s understands the extent to which recruiting challenges are impacting the company’s business. He clearly laid out the numbers.
When we break our U.S. stores into quintiles based on staffing levels versus a fully staffed store and then compare their sales performance to the fourth quarter, it gives us an idea of the magnitude of the impact of the staff about our operations in the United States. Stores in the top 20%, those that are mostly or nearly fully stocked, saw an average fourth-quarter same-store sales increase of nearly 6%. In contrast, stores in the bottom 20%, those facing the greatest labor shortages, saw same-store sales decline nearly 7% on average in the fourth quarter.
Domino’s took big steps to resolve its hiring issues. This has included not only efforts to find more people, but also measures to make stores more efficient.
A new Applicant Tracking System we rolled out a few months ago has made it easier for candidates to apply for openings and be onboarded into corporate and franchise sites across the US system. We also share operational best practices to eliminate unnecessary and time-consuming tasks in the operation of our stores, tasks such as pre-folding boxes that could increase team member and customer satisfaction. We now have over 2/3 of our stores that are not pre-folded boxes, which saves approximately 30-40 hours per store per week in labor.
This change may seem silly, but it’s all about efficiency, according to Allison. And, of course, like so many of its rivals, Domino’s has resorted to raising wages, though it can’t force franchisees to do the same.
“Across our corporate stores in 2021, we have rolled out increases to team member compensation and benefits totaling more than $6 million in addition to required minimum wage increases,” he said.
“In 2022, we currently plan to make an additional $8 million investment in team member salaries in addition to the required 2022 minimum wage increases at our corporate stores.”