- Domino’s Pizza CEO Ritch Allison says investments in third-party delivery apps are subsidizes that are causing short-term pressure on the pizza chain’s business.
- “We’re not going to do foolish things, you know, in the short term in reaction,” he tells CNBC.
- “We don’t know how that’s going to shake out once consumers actually have to pay the full cost of that delivery because those fees are quite substantial, relative to the cost of the underlying food,” he says.
Domino’s Pizza is sticking by its long-term plans even as third party delivery companies such as GrubHub, Uber Eats and DoorDash present short term pressures, CEO Ritch Allison told CNBC following the company’s Tuesday earnings call.
Delivery apps that make it convenient for customers to order food from a plethora of restaurants are “creating some turbulence in the marketplace,” but it’s not clear how viable those businesses will be in the long run, he said in a one-on-one interview with Jim Cramer.
…Investors are subsidizing delivery costs for third-party aggregators, and helping to keep costs artificially low, he said.
“We don’t know how that’s going to shake out once consumers actually have to pay the full cost of that delivery because those fees are quite substantial, relative to the cost of the underlying food,” Allison said. “I think we also have not yet seen what’s going to happen with the supply of restaurants on these platforms as well.”