An employee moves a pizza to an oven at a Domino’s Pizza Inc. restaurant in Chantilly, Virginia.
Andrew Harrer | Bloomberg | Getty Images
Domino’s Pizza CEO Ritch Allison said “carryout” 17 times on the pizza chain’s earnings call Tuesday as the company looks for growth outside of the competitive delivery market.
The company’s business has long been focused on delivery, but its carryout sales are growing as it adds more U.S. locations and renovates its stores worldwide. Carryout orders are more profitable than delivery because they do not require a delivery driver.
For Domino’s, carryout offers the chance to gain more market share from other pizzerias because it is a larger market overall than delivery. Carryout offers 2.5 times the market opportunity of delivery, according to a September note from Guggenheim analyst Matthew DiFrisco.
Nearly 45% of Domino’s sales came from carryout during its fiscal third quarter, according to Allison. Its strategy to add more U.S. stores and to update existing locations has helped drive carryout orders. The pizza chain also introduced more crust options to its daily $7.99 carryout deal.
“We believe that adding more variety at that $7.99 price point will not only drive orders, but also ticket, to this rapidly growing part of our business,” Allison told analysts.
The focus of Domino’s rivals Pizza Hut and Papa John’s is turned squarely on their delivery sales. They have both inked deals with third-party delivery aggregators including GrubHub and DoorDash.
Those outside delivery services have been putting pressure on Domino’s U.S. sales as consumers opt for discounted delivery on a wide variety of cuisine through UberEats or its competition, instead of ordering Domino’s pizza. Domino’s reported earnings and revenue that missed expectations Tuesday morning and slashed its sales growth outlook.