Domino's will pay people to pick up their own pizza
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Illustration: Eniola Odetunde/Axios
People are getting paid to pick up their own pizzas.
The big picture: Worker shortages and increasing food prices are pressuring restaurants that deliver their own food to seek alternative routes to protect profits.
Why it matters: With the Super Bowl less than two weeks away, the pandemic near its peak, and winter raging in the Northeast, restaurants can’t afford to miss out on a key opportunity to lure customers.
Driving the news: Domino’s Pizza announced Monday that it will offer customers a $3 credit through the spring if they choose online-ordered carryout over delivery.
- The credit is good for a week and can be used for another carryout purchase.
Threat level: Delivery accounts for two-thirds of Domino's U.S. sales. The move calls into question the company's long-running strategy of shunning third-party apps that specialize in delivery, such as DoorDash, Uber Eats and GrubHub.
- Domino's has had a hard time getting enough drivers.
- It may “show cracks in that business model,” CFRA Research food delivery analyst Angelo Zino tells Axios.
Unlike Domino’s, competitors Pizza Hut and Papa John’s do business with third-party apps, which Domino's has bashed for what it calls "surprise fees."
Yes, but: Domino’s current issues don’t necessarily mean its long-term strategy is flawed.
- “Some of the constraints that you're seeing out there [like inflated ingredient costs and worker absenteeism] aren’t necessarily going to be permanent,” Zino says.
What we’re watching: Expect the food delivery apps to try to take advantage of Domino’s moment of weakness.
- “I would expect them to be fairly aggressive ahead of the Super Bowl,” Zino says. “It’s definitely an enormous day for them.”
