Grub

Domino's wins with its DIY attitude (and its takeaway-only HOV lanes)

Friday, February 21, 2020 by Robinhood Snacks | Disclosures

Tastes better when you Do It Yourself

Anything you can do, I can do better (alone)... Domino's just delivered a hot box of tasty earnings — without relying on food-delivery middlemen. The pizza chain beat both sales and profit expectations in the 4th quarter, sending shares up a steamy 26%. Extra impressive, given Domino's DIY attitude:

  • Delivery app middlemen like DoorDash and Grubhub promise to boost restaurants' sales, but they take a cut of that money.
  • Restaurants don't want to splurge on their own delivery app/drivers, so they'll partner with apps for tech + exposure despite the fees. Shake Shack, Starbucks, and Wendy's are all listed on partner apps.
  • Domino's is 1 of the only big chains that refuses to work with outside delivery apps — it thinks commissions are lame and wants to have control over its customer service (and guard against cold pizza).

Domino's is one of the OGs... that popularized delivery — it was always DIY. But now with increased competition from the apps, it's rolling up its sleeves to beef up its delivery/carryout game:

  • Online: Introduced online-ordering for carryout, and an app that shows real-time GPS order tracking. Its AnyWare platform lets you even order via Alexa, Slack, or Apple Watch.
  • Speed: Introduced designated lanes in stores to cut wait times for carryout — it's also building more stores to be closer to pizza lovers and slice delivery times.
THE TAKEAWAY

DIY carryout could be Domino's future... Efficient carryout operations can hurt delivery middlemen — if there's a Domino's 8 min away from your house, you prob won't be down to pay for delivery/tip on Postmates. Carryout now makes up nearly half of Domino's orders, up from about 30% in 2012. And carryout is more profitable than delivery (no drivers to pay). Maybe Domino's will scrap dine-in altogether (have you ever actually sat down in one?).

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