Domino’s Sales Plagued by Aggressive Third-Party Delivery Advertising

Consumers’ growing appetite for third-party delivery services is finally affecting Domino’s Pizza where it hurts — its pocketbook.

Strategic marketing on the part of GrubhubDoorDash, and Uber Eats in the first quarter had a negative impact on the pizza chain’s U.S. same-store sales growth, which plummeted by more than 50 percent, according to Chief Financial Officer Jeffrey Lawrence.

…Since the introduction of third-party delivery services in the U.S. back in 2011, restaurant sales growth has not been incremental. Instead, market share is shifting across more stakeholders, as operator margins steadily diminish, Allison added. While Domino’s has historically shunned third-party delivery, both Pizza Hut and Papa John’s, the chain’s top rivals, work with at least one third-party aggregator to date.

“I don’t see any need for us to go onto these third-party platforms,” said Allison. “We have an incredibly strong digital channel in our business. We’ve got a loyalty program with 20 million-plus active members, so it’s just not clear to me why I would want to give up our franchisees margin or give up the data in our business to some third party who will ultimately use it against us.”

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