Domino’s doesn’t monitor franchise staffing levels and has no say in how operators implement menu price increases or changes in pay. Allison said the company can only lead by example.
“One of the most important things about running corporate stores is that we’re out there across the country feeling exactly what our franchisees are feeling,” Allison said. “So when they’re feeling pinched on staffing and wages and other things, we feel it in our own business, as well, and it allows us to make maintain a level of alignment that’s just impossible to have if you’ve sold all of your corporate stores over time.”
Allison acknowledged with staffing challenges, Domino’s hasn’t accomplished the type of service improvements it was hoping for in 2021. The chain has slipped “a minute or two” in average delivery times.
The key to turning that around is more than just gathering additional team members—it’s about becoming more efficient in stores so delivery drivers never have to leave their vehicle. For example, Domino’s no longer ask employees to pre-fold boxes, which saves time and leads to better-looking stores, and the chain rolled out GPS software that helps drivers become more familiar with the surrounding area. Additionally, the brand is using machine learning to predict sales and match the right number of team members.
Despite headwinds, Domino’s experienced positive delivery same-store sales in Q2 fueled by ticket growth, proving to Allison the brand’s own delivery fleet is still a more efficient model and provides better value than third-party aggregators. For guests, it means charging a single, transparent delivery fee, and for restaurant operators, it means charging a marginal amount for digital orders.
“We don’t exactly know yet how all this will ultimately shake out and all of the dynamics that may shift over time, but we’re really focused on maintaining a competitive position with both of those groups—the customers and the restaurant operators.”
Domino’s overall carryout business has withstood staffing challenges as well. In Q2, the chain’s takeout business saw positive comps, due to a balance of order count and ticket growth. The channel took a hit during the pandemic, but as restrictions have lifted nationwide, Domino’s is actually seeing higher sales in markets with fewer restrictions thanks in part to the big comeback of carryout.
The channel returned to pre-COVID levels in terms of orders per store in the second quarter, but when it comes to the mix between delivery and carryout, the company is still slightly below pre-pandemic marks. Allison said that’s driven by the fact that delivery order counts on a two-year basis are significantly higher than they were in 2019. Still though, the CEO thinks the surge in carryout orders is an initial sign that the business is coming back, and carside pickup will continue to play a major role in that growth.