Dive Brief:
- Domino’s is expanding its Uber Eats ordering partnership from Las Vegas to corporate and franchised stores in Houston, Miami, Detroit and Seattle over the next few weeks, CEO Russell Weiner said on the company’s Q3 2023 earnings call on Thursday.
- Domino’s delivery same-store sales fell 2.3% year over year, CFO Sandeep Reddy said, which is in line with projections the company shared in July. This marks an improvement over Q2, when delivery sales were down 3.5% year over year.
- Lackluster delivery sales were partially responsible for Domino’s overall 0.6% contraction in U.S. same-store sales for Q3, but Domino’s expects its Uber Eats initiative and new promotions to eventually lead to a return to delivery sales growth.
Dive Insight:
Domino’s is preparing for a national launch of the Uber Eats activation, which it expects to boost flagging delivery performance. The company hasn’t dedicated much marketing spend to support the gradual deployment of the delivery partnership, Weiner said.
“This is really more to test out what I call kind of the handshake between two really large platforms,” Weiner said. Domino’s is using test markets to make sure the technology functions properly.
The company will charge a slight premium across its entire menu on Uber Eats, though Weiner said its pricing will remain competitive with other pizza brands on the delivery platform. Domino’s bets that its marketing and social media expertise will enable it to capture considerable market share on Uber Eats once the partnership is available nationwide.
“If you're in that platform we are going to drive you to Domino’s,” Weiner Said. “We have a lot of expertise on how to do that.”
Domino’s carryout in the U.S. continues to outstrip delivery, however, notching 1.9% same-store sales growth for the quarter. Domino’s anticipates this channel will also see considerable sales growth in Q4 as a result of changes to its loyalty program, which make redemption possible at lower-spend thresholds. Those changes took effect on Sept. 12, just after the end of the quarter, and are intended to incentivize spending by carryout customers because of lower average tickets on carryout orders.
Domino’s expects its “emergency pizza” promotion, which Weiner described as a buy-one-get-one-later deal for U.S. loyalty customers, to boost delivery sales in Q4. Since 2022, Domino’s has employed a number of strategies to improve its delivery sales, including adding hundreds of EVs to its delivery fleet, and using call centers to free up in-store labor. Those efforts have yielded partial success: sales may be down, but service times have recovered to pre-pandemic levels, Weiner said.