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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

Ina Fried, author of Login
33 mins ago - Technology

Microsoft to buy Activision Blizzard

Photo: Jakub Porzycki/NurPhoto via Getty Images

Microsoft announced Tuesday it plans to acquire video game giant Activision Blizzard for $68.7 billion in cash.

Why it matters: The move comes as Activision Blizzard has faced a wave of accusations of workplace harassment.

1 hour ago - World

Blinken to visit Ukraine as Russia invasion threat looms

Blinken (R) with President Zelensky. Photo: Efrem Lukatsky/Pool via Getty

Secretary of State Antony Tony Blinken will travel to Ukraine on Tuesday as the country faces an ongoing threat of Russian invasion.

Driving the news: Blinken will meet with Ukrainian President Volodymyr Zelensky and Foreign Minister Dmytro Kuleba, as well as officials at the U.S. embassy in Kyiv to discuss contingency planning. He'll then travel to Berlin to meet German Foreign Minister Annalena Baerbock and attend a meeting of the "Transatlantic Quad" — France, Germany, the U.K. and U.S.

Updated 1 hour ago - World

At least 3 dead after Tonga volcano eruption and tsunami

A satellite image of the explosive eruption of the Hunga Tonga-Hunga Ha'apai volcano on Saturday. Photo: UNICEF/NOAA

At least three people are confirmed to have died in Tonga following the undersea volcanic eruption that sent tsunami waves toward the island nation and across the Pacific over the weekend, officials said Tuesday.

The big picture: Officials reported major damage along the western coast of the main island of Tongatapu, where the capital, Nuku'alofa, was covered in ash and dust, including on the runway of the airport. Officials in Tonga confirmed three deaths in the country's first official statement since the crisis began.