Dominio's Pizza, a popular pizza chain, is still struggling to overcome its delivery problem. In the second quarter, delivery sales at stores open at least a year fell 11.7% compared to the prior year. This decline is attributed to staffing problems, which continue to plague the company.
The issue with delivery is not new for Domino's or the pizza business as a whole. Earlier this year, Domino's CEO Ritch Allison warned that a driver shortage would be a drag on business. Pizza Hut also blamed its own same-store sales drop in the first quarter on a lack of delivery drivers.
However, demand for delivery has been soaring, with Domino's reporting an 8% increase in delivery sales compared to the second quarter of 2019, before the pandemic. To address this issue, Domino's is trying to solve its delivery problem in several ways.
Firstly, the company is using call centers to free up employees for other tasks such as delivery. At the end of the second quarter, roughly 40% of Domino's US stores were using the service in some capacity.
Secondly, Domino's is considering offering more flexible schedules to attract more drivers. "One of the key issues for delivery drivers is flexibility," said Domino's CEO Russell Wiener. Allowing drivers to work shorter shifts, fewer hours per week, and sign up for assignments last minute are areas where we are continuing to evaluate and evolve our practices.
Thirdly, the brand is trying to simplify operations in stores to increase efficiencies and free up more employee time. One option Domino's has been trying to avoid is the use of third-party delivery providers such as DoorDash, Uber Eats, or Grubhub, which charge a commission fee.
"We continue to believe that many of the answers to the labor shortages we are facing are already in our system," said Weiner. However, he noted that "the question remains, can we close the gap in performance and get back to fully meeting demand utilizing our current delivery model." Until Domino's comes up with a solution, all options will remain on the table.
In related news, Domino's CFO Sandeep Reddy reported that US sales at stores open at least a year fell 2.9% in the second quarter. This decline is attributed to the same staffing issues affecting delivery sales.
Overall, it appears that Domino's still has some work to do to overcome its delivery problem and capitalize on the growing demand for delivery. The company will need to continue to explore innovative solutions to attract more drivers and improve efficiencies if it hopes to meet customer demand.