Can Third-Party Delivery Revive Domino's Same-Store Sales?

With same-store sales growth of just 0.1% in the second quarter of 2023, Domino’s Pizza is hoping its partnership with third-party delivery platforms can turn things around soon.

The 0.1% figure fell shy of analysts’ estimates of an increase of about 0.2% in same-store sales, according to U.S. News and World Report. “The sluggish results help explain why Domino’s is listing its menus on Uber Eats and Postmates to attract new customers,” Insider Intelligence senior analyst Zak Stambor said in that article.

Overall, Domino’s global retail sales grew 5.8% in the second quarter. The company posted net store growth of 197 locations worldwide, including 27 net U.S. store openings.

After struggling with delivery challenges since the pandemic, Domino’s announced earlier this month that it would allow U.S. customers to place orders via the Uber Eats and Postmates apps, both owned by Uber. The roll-out will start this fall in four pilot markets and is expected to go nationwide by the end of 2023.

Key to that deal: Third-party orders will be delivered by uniformed Domino’s drivers. Additionally, Uber Eats and Postmates Unlimited members will receive Domino’s orders for no delivery charge.

Despite the chain’s stagnant same-store sales growth, CEO Russell Weiner said he believes the company is well-positioned for the future. “We are executing our plan to restore delivery growth in the U.S.,” Weiner said in a statement. “Our efforts to improve service and staffing while driving value and innovation will continue to make a difference in driving order counts in this important part of our business.”

The Uber deal will also pay off globally, Weiner said. “Over two-thirds of our stores around the world will have the ability to take orders from Uber Eats. We are excited to strategically enter the multi-billion-dollar aggregator marketplace as the number one pizza brand in the world.”

But a big challenge looms ahead, as Weiner explained in a recent earnings call. “We do not currently have the number of delivery drivers we will need for this incremental volume,” he said, according to Business Insider.

But the addition of more electric vehicles to Domino’s delivery fleet is expected to pay off, enabling new drivers to work for the chain without using their own cars. Last month, the company announced it would add more than 1,100 Chevy Bolt delivery cars by the end of this year.

“Do I expect to need more incremental drivers? Yes,” Weiner said. “And, yes, I expect to be able to get them.”