Domino’s built its business on the back of its pioneering delivery service.
These days, however, customers are just as likely to visit one of the chain’s 7,000 restaurants to get their pizzas themselves.
That fact was driven home on Monday, when the Ann Arbor, Michigan-based pizza chain reported a surprisingly robust 3.4% same-store sales growth in the U.S. in the second quarter. That included 1.5% same-store sales from delivery, as Domino’s new agreement with the aggregator DoorDash drove more business through that channel.
But carryout same-store sales rose 5.8% in the quarter. The average number of carryout orders hit a new high, executives said.
Two things helped drive that carryout business: The company’s new Stuffed Crust pizza and its loyalty program, Domino’s Rewards.
Domino’s upgraded its loyalty program in 2023, shifting from one in which customers had to buy a certain number of pizzas to get a free pie to one in which they collect points based on purchases. That was designed to target carryout customers that often make smaller sized orders and would often be ineligible for the old loyalty program.
That program continues to attract new users, who are increasingly likely to get their orders from the stores themselves.
“There are customers who want value and want rewards,” CEO Russell Weiner told analysts on Monday. “The biggest change we did to the Domino’s Rewards program was made it a better program for light users.”
Pizza chain sales have taken a hit in the past three years as more customers order pizzas from one of the major third-party aggregators.
Chains like Domino's are relying more on carryout customers to generate sales, and the pizza chain is opening more locations in existing markets in part to attract more of that business. But the chain is now selling pizzas on both Uber Eats and DoorDash to maintain what delivery business it does have.
Domino’s has said that $5 billion worth of pizzas are delivered through those services every year, and it expects to get about a third of that.
The DoorDash deal helped deliver positive delivery same-store sales this quarter, and executives expect those results will continue to grow. “The second half of the year is going to be where you see more growth out of DoorDash,” Weiner said. “Uber is half the size of DoorDash, so I think over time we’ll see more out of that.”
Yet those customers don’t use the loyalty program. They tend to be less concerned about price and will use the aggregators like a marketplace for dinner. “If you think of aggregators, it tends to be a higher-income customer,” Weiner said. “These are folks who we hope will eventually come to Domino’s, but we’re willing to meet them where they are. The economics are set up for them to stay aggregator customers should they need to.”
Another thing drove Domino’s sales last quarter: a stuffed-crust pizza. The chain joined longtime rivals Pizza Hut and Papa Johns in selling Stuffed Crust earlier this year, which helped generate stronger average ticket as more consumers opted for the higher-priced item.
The new crust, the loyalty program and the growing use of aggregators all give Domino’s more sales levers as it gains market share in the pizza business. Domino’s has been growing both with organic sales at its existing locations and with new store growth—the chain has opened nearly 900 locations since 2019 compared with 71 for Little Caesars and 149 for Papa Johns, while Pizza Hut has closed 750.
Weiner believes the company has everything necessary to keep building its pizza market share.
“We have best-in-class franchisee economics, the largest advertising budget, the best supply chain and a rewards program that has never been bigger,” he said. “We’re now fully rolled out on the two largest aggregators. And with the addition of Stuffed Crust, we have all the major crust types on our menu. We have never had this many tools at our disposal to capture market share.”
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