Same-store sales climbed 16.1 percent for Domino’s U.S. restaurants and 1.3 percent for its international stores in the second quarter of 2020. It was the strongest quarter for Domino’s U.S. same-store sales in nine years.
According to Nation’s Restaurant News, the dramatic jump can be attributed to an increase in digital and delivery orders in the midst of the ongoing pandemic, “further cementing delivery leaders as the restaurant industry ‘winners’ over the past several months.”
“We believe value and convenience are bringing customers to us, and we hope it will continue to bring them back,” Domino’s CEO Ritch Allison told investors during an earnings call last Thursday, NRN reports. “Nearly 75% of our sales in the U.S. are coming through digital channels through the second quarter. This, combined with loyalty adoption, gives us a good proven chance at driving additional customer frequency. I am glad, more than ever, that we have this direct digital and loyalty relationship with our customers and we are not dependent on third-party to bring us orders.”
He also said menu innovation—such as improving its chicken wings—was key to Domino’s strategy. “Menu innovation doesn’t always have to be something brand-new but [can be] a major renovation of existing products that customers have simply told us need to be better,” Allison said. “Our strategy in launching new products focuses on first driving incremental sales and orders and incremental profitability through our franchisees and [at] store level. We focus on permanent menu items and simple operations.”
Domino’s second quarter of 2020 represents a dramatic turnaround compared to the same period in 2019. Last year’s second-quarter results—which showed an increase in same-store sales of just 3 percent—was the lowest increase in seven years and sent Domino’s stock plunging by nearly 8 percent. At the time, Allison said substantial discounting from third-party food delivery aggregators was putting pressure on Domino’s, which handles its own deliveries in-house.