Domino’s looks to better delivery to fight off rivals
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Domino’s looks to better delivery to fight off rivals

Gone are the days when pizza provider Domino’s Pizza – the world’s largest chain by store number and undisputed market leader – were only competing with other pizza chains. Today, a flurry of food order and delivery services, from Grubhub to Uber Eats, have sprung up that offer hungry homebodies the chance to order not just pizza and Chinese food, but all types of cuisine, from the comfort of their sofas. Domino’s has taken a hit from these giant upstarts – but it knows how to bounce back.

Domino’s share price has trended down by less-than 1% over the past five days

Domino Aug 15

Source: Yahoo Finance

Domino’s is planning to roll out hundreds of e-bikes in partnership with Rad Power Bikes across stores in Miami, Salt Lake City, Baltimore and Houston. The reason is simple: e-bikes are more agile than most delivery vehicles, letting Domino’s drivers zip through traffic and avoid lengthy holdups. According to Domino’s, each e-bike will have the capacity to hold 12 pizzas and travel at speeds of 20 miles per hour.

This is part of a larger strategy by Domino’s to stay competitive against companies that offer a wider selection of food. The premise is simple: we’re only competing with you for the pizza customers, and we want to get as much of the action as possible. To this end, the company has opened more stores in locations where they’ve already got a presence – by expanding its network, the chain is betting it can offer a faster and fuller service.

Greg Keller, a Domino’s franchisee in Seattle, made a comment to the press about the company’s new mode of transportation: “While delivery on a traditional bike solved many of our traffic and parking issues, the hills in Seattle were tough on even our best cyclists. E-bikes were a game-changer for us, and we’ve been delivering with them for three years now.”

Disclosure

Dominion holds Domino’s Pizza in its Global Trends Managed Fund.


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