Domino’s posted its lowest-ever increase in same-store sales on its Q2 earnings call yesterday, a drop that’s in-part fueled by what CEO Rich Allison called “headwinds related to aggressive activity from third-party delivery aggregators.”
On the call, Allison noted that he didn’t expect to see third-party delivery activity slow any time soon, but that he questioned the sustainability of the third-party delivery model, noting that “there are going to be some survivors in this business and some of these aggregators will not be around in the future would be my hypothesis.”
A veteran of delivery, Domino’s has not and may never partner with a third-party service like Grubhub or DoorDash when it comes to getting pizza into the hands of customers as fast as possible. Rather, the company has over the last few years doubled down on its own in-house efforts, from its chatbots named DOM that can take your order to AI tools that assess pizza quality to a partnership with Nuro this year to test delivery via driverless cars.
On the call, Allison also hinted at what’s to come in terms of more and new technology initiatives from the company. Domino’s will launch GPS tracking technology at the end of 2019 that will, “bring even further transparency to the experience of tracking an order.” He also noted that the Nuro partnership will officially kick off this fall, and hinted at getting DOM into more stores across the U.S.
Despite their different context and mediums, all of these technology efforts roll up into the same goal: get the pizza delivered to the customer as fast as possible. And we’ll continue to see Domino’s attempt that through constant technology innovation, even as third-party delivery services continue expanding across the U.S.
Despite lower sales for the quarter, Allison said he was “pleased” with overall performance, and Domino’s is on track to meet the lower end of its five-year outlook.
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