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Photo: Scott Olson/Getty Images

Domino's Pizza has shunned delivery app giants Uber Eats, DoorDash and GrubHub, and the pizza chain's CEO confirmed the company has no plans of collaborating with them any time soon.

Why it matters: While its No. 1 competitor, Yum Brands' Pizza Hut, has partnered with and taken a stake in the to-go dining app GrubHub, Domino's has banked on its technological investments in delivery and user operations to beat out competition, the Wall Street Journal (subscription) reports.

"Our same-store sales performance for the quarter came in toward the lower end of our 3-year to 5-year outlook, as we continue to navigate through headwinds related to aggressive activity from third-party delivery aggregators. I do not expect this activity to ease in the near term."
— Domino's CEO Ritch Allison, in a Q2 earnings call

By the numbers:

  • U.S. same-store sales growth at Domino's has tapered off, and in the most recent quarter, the company reported 3% same-store sales growth — the slowest in at least 3 years, per Reuters.
  • The results disappointed Wall Street, and shares of Domino's fell more than 8% after the news broke.

Domino's still holds the largest market share in the pizza sector. But as the multinational restaurant doubles down on delivery technology, company executives are more concerned about delivery apps boosting demand for their competitors' food, not the competitors themselves.

  • For instance, valued at $12.6 billion, privately held DoorDash is now worth more than Domino’s, which has a market cap of $10.43 billion.
  • With the exception of UberEats and GrubHub, the delivery apps are backed by venture capital, and as private markets, they have patience the public markets do not.

What they’re doing: From chatbots to drones and its newly expanded driverless delivery cars, the world's largest pizza chain has been upping its investments for the past decade in technologies to give its customers a more seamless experience, and the push internally for innovation only continues.

  • Domino’s has been testing Ford-built, self-driving delivery vehicles in Michigan and Miami for several years. In June, Domino’s announced autonomous-vehicle startup Nuro will make a custom driverless fleet of cars for pizza deliveries in Houston later this year.
  • A Domino’s division in Australia and New Zealand began testing AI cameras that photograph and grade each pizza on different criteria to control quality. Auckland, New Zealand has also been home to pizza delivery by drone for the past 3 years.
  • Domino's has delivered to more than 200,000 nontraditional locations in the U.S., like parks and beaches.
  • The company’s voice-recognition system, “Dom,” has been automating telephone orders in about 40 stores since last year.

The bottom line: Outside delivery companies pose a real threat to about 20-25% of Domino's locations, Morgan Stanley analyst John Glass said in a research note Thursday. This competition could chip away at sales growth by up to 2% for locations open for a year or more.

Go deeper

SoCalGas agrees to $1.8 billion settlement for 2015 gas blowout

An evacuee with a Save Porter Ranch sign outside Southern California Gas Company's Aliso Canyon gate in Porter Ranch in January 2016 as the gas leak continued. Photos: Al Seib / Los Angeles Times via Getty Images

Southern California Gas Company and its parent company announced Monday they've agreed to pay up to $1.8 billion in settlement claims over the 2015 Aliso Canyon natural gas storage facility blowout.

Why it matters: Some 100,000 tons of methane, ethane and toxic chemicals poured into the air for 112 days, forcing over 8,000 families to evacuate from their Los Angeles-area homes and sickening many with headaches, nausea and nosebleeds, per the L.A. Times.

Updated 4 hours ago - World

North Korea fires short-range missile to sea, slams "hostile" U.S. policy

North Korean leader Kim Jong-un. Photo: API/Gamma-Rapho via Getty Images

South Korea's Joint Chiefs of Staff said Tuesday that North Korea's military had fired a short-range missile toward its eastern sea, per AP.

Why it matters: North Korea's ambassador to the United Nations defended the latest launch in remarks to the UN General Assembly, demanding the U.S. and South Korea end their "hostile policy" against the country.

Arizona Judge: Adding mask mandates ban to budget bill unconstitutional

Arizona Gov. Doug Ducey (R) Photo: Michael Brochstein/SOPA Images/LightRocket via Getty Images

An Arizona judge ruled Monday that the state's ban on mask mandates in schools, and other measures put into the state budget by Republicans, are unconstitutional, the Arizona Republic reports.

Why it matters: The sweeping ruling voids a ban on vaccine requirements for public universities, community colleges and local governments, and strikes down some non-COVID-related measures like a ban on teaching critical race theory in classrooms and anti-fraud measures for ballots.