Domino’s Digital Presence Now Accounts for Nearly 80% of Sales

Need to Know

• Domino’s, the largest pizza company in the world based on global retail sales, reported a Q1 global sales increase of 4.4%. 
• Digital sales are also growing as CFO Jeff Lawrence noted in the sales call “at least one week where we were over 80% digital” with an average coming in between 70% and 75%.
• The chain has moved to 100% contactless delivery model across the country, and enabled contactless drive-up, carry out technology available to all US stores.
• Throughout Q1, the quick-service-restaurant opened 178 gross new stores and 69 net new stores, comprising 30 net new US stores and 39 net new international stores.
• In 2019 more than half of Domon’s global retail sales came from its digital channels, including online ordering and mobile applications.

Analysis

With many restaurants around the globe struggling due to the economic and social impacts of the coronavirus pandemic, Domino’s reported positive Q1 sales growth thanks in part to agility and a robust digital strategy. 

In its latest financial report the largest pizza company in the world, based on global retail sales, reported gains in global sales of 4.4%. International stores saw same-store growth of 1.5% during the quarter, marking the 105th consecutive quarter of international same-store sales growth. 

“In a time of unprecedented change in our industry, I am pleased to report that Domino’s is in a very strong financial position, both at the brand and franchisee levels,” said Ritch Allison, Domino’s CEO in the earnings report. 

With many governments enforcing social distancing orders, Domino’s was quick to act rolling out a “100% contactless delivery model across the country,” in addition to making contactless drive-up, carry out technology available to all US stores.

While the QSR made changes to its health benefits programs, in-store procedures, delivery, and supply chain practice it is its recent digital growth that likely attributed to a large portion of the gains reported in the earnings report.  

CFO Jeff Lawrence reported “For the fourth quarter, we touched 70% digital [sales] in recent weeks, and we’ve had at least one week where we were over 80% digital. So, that’s also another benefit we’re seeing is that customers are coming to that digital channel as we go into this contactless space that we’re in.”

Growing its digital channel has been a focus for the chain. Earlier this year it rolled out Pie Pass, allowing carryout customers to bypass the line and head straight to the counter for a personalized experience. In keeping up its competitors, Domino’s also improved its delivery service by launching real-time GPS tracking technology to its apps. The chain also partnered with Branch, launching an app that grants its employees instant access to earned wages. 

Despite positive sales growth and a booming omnichannel experience Domino’s withdrew its two to three-year outlook, “due to the current uncertainty surrounding the global economy and the Company’s business operations considering COVID-19.”