Domino’s Pizza sees US consumer as “really strong”, vows to keep control of delivery
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Domino’s Pizza sees US consumer as “really strong”, vows to keep control of delivery

Domino’s Pizza has no interest in switching its delivery service over to Grubhub, Uber Eats, or any of the other order and delivery apps that are currently winning big with Millennials all over the US. The reason is that the company thinks keeping its operations in-house gives it advantages in both costs and service. Speaking to reporters recently, Domino’s CEO, Richard Allison, said: “When a customer orders from Domino’s, I want a Domino’s uniformed driver to show up and deliver that pizza. It helps us to control customer experience and also the quality of our product.”

Domino’s share price has remained basically flat over the last five days

graph 17 dominos

Source: Yahoo Finance

Domino’s delivery skill is not up for debate. It was one of the first big food brands to make significant investments into a digital platform – which is still market-leading – and tie it to a dedicated delivery service. The company’s use of “hotspots” (public locations to which you can get a pizza delivered), and expansion of its physical network, both play in to a much more powerful order-and-delivery service than its competitors can access.

That’s particularly important, as Allison sees the US market remaining strong – meaning there could be a significant windfall for companies that can get by without sharing profit. He said: “What we see here in the US is still a really strong consumer. Unemployment is still very low, we’ve had good wage growth across the US economy over the last couple of years, and we haven’t seen any slowdown in ordering pizza, or in ordering from Domino’s.”

Speaking to CNBC this week, he also reiterated his lack of concern with the current economic climate worldwide, saying “we’ve had a successful run of growth internationally now for several decades, and that’s spanned many economic cycles and various points of tension between countries over the years […] I think things will work out just fine for us.”

Disclosure

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


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