Dive Brief:
- Domino’s plans to expand its use of third-party delivery later this year, CEO Russell Weiner said Monday during an earnings call.
- The chain extended its exclusivity with Uber Eats through May 1, but began negotiations with additional aggregator partners. Domino’s has piloted with some new aggregator partners in a small number of stores, he said.
- Aggregator marketplace sales, which made up 3% of sales in 2024, could represent $1 billion in incremental sales over time, he said.
Dive Insight:
Third-party delivery could help Domino’s boost its delivery same-stores sales, which have been sluggish compared to carryout for several quarters. Overall same-store sales rose 0.4% during the fourth quarter, driven by a 3.2% increase from carryout and offset by a 1.4% decrease in delivery, CFO Sandeep Reddy said during the call.
In 2024, Domino’s delivery represented 46% of transactions compared to 54% for carryout, which had full-year comparable sales growth of 6.2%, Reddy said. Delivery, on the other hand, had full-year comparable sales of 1.1%.
Domino’s originally partnered with Uber Eats in July 2023, expanding the partnership in October 2023. Last year marked Domino’s first full year on an aggregator platform. The goal at the time was to capture new users and to charge a slight premium across its entire menu on the platform.
Domino’s U.S. same-store sales Q1 2023 to Q4 2024
While third-party delivery tends to be more expensive than carryout because of delivery fees and driver tips, Domino’s had relative value compared to other partners offering third-party delivery, Weiner said.
“When you look at delivery to delivery, we’re very competitive, down to the delivery fee and the price, not only to other pizza, but really other items you get delivered,” Weiner said. “If you think about getting a pizza delivered to your house for $6.99 each, that’s 16 slices. You’re feeding a lot of people.”
Domino’s expects a more meaningful sales impact from further penetration into aggregator marketplaces during the second half of the year, Weiner said.
“Incrementality has continued to track as expected and we remain focused on tailoring our offers and programming to optimize it,” Weiner said.
“In 2025, we know that aggregators are a meaningful sales-driving opportunity for us, and we have yet to join the largest aggregator platform in the U.S.” Weiner said in apparent reference to DoorDash.
Domino’s has been purposefully managing the incremental volume for several reasons, but once it is on more marketplaces, sales are only going to grow, Weiner said. Domino’s wants third-party delivery to be incremental and accretive to the profitability of its franchisees and through its partnership with Uber has learned how to market effectively on third-party aggregator platforms. Management also expects future integration to be quicker than it was with Uber Eats since it had to build that integration from scratch.
“The aggregator marketplace is the fastest growing segment within QSR pizza and we’re just getting started,” Weiner said.
