Domino’s Pizza Says No Thanks To Third-Party Delivery

Domino's keeps delivery in-house

Domino’s Pizza is just saying no to third-party delivery apps.

Instead, the company relies on its own employees to make deliveries from its 6,000 U.S. stores and most of its 11,000 international ones, as well as runs its own online-ordering app.

While rivals Papa John’s and Pizza Hut have said deliveries through Grubhub and DoorDash have helped them expand into new markets and boost sales, Domino’s Chief Executive Ritch Allison told The Wall Street Journal that the profit hit and reputational risk of working with those companies isn’t worth the extra revenue.

“As profit is extracted from the industry, I think we’re going to see a lot of players really struggle,” Allison said.

However, the company reported its slowest same-store sales growth in nearly seven years during its most recent quarter, and its shares were down 5 percent for the year as of Aug. 16. Shares in Papa John’s and Pizza Hut owner Yum Brands were up 7 percent and 26 percent, respectively.

Still, Domino’s stands by its decision, saying that partnering with third-party delivery apps would take too much of the profit away from the company and its franchisees. So it is investing in its own order and delivery technology, including GPS tracking technology that would be rolled out by the end of the year.

“This will be an innovation step that will bring even further transparency to the experience of tracking an order,” Allison said last month. In addition, the company recently announced a pilot program and partnership with American robotics company Nuro during the quarter.

And other companies are following Domino’s lead. For example, Jimmy John’s Gourmet Sandwiches is using its own couriers because it has found delivery companies slower and customers often blamed the restaurant for any problems with an order.

“The math just doesn’t work for restaurants. Many are realizing that now,” said Jimmy John Chief Marketing Officer John Shea.