To Domino’s CEO Russell Weiner, adding Uber Eats as a third-party partner is another step in proving to consumers that the brand is obsessed with delivery. 

And he’s right—the move is big, but it’s not singular in nature. 

Before it was even announced, Domino’s revealed pinpoint delivery, which allows guests to receive a pizza at locations without a traditional address, like parks, beaches, or baseball fields. Additionally, the brand will have 1,100 custom-branded Chevy Bolt electric vehicles across the country by the end of the year to help attract drivers without a car of their own. There’s also Domino’s ongoing “Summer of Service” training program in which U.S. franchisees are visiting headquarters in Ann Arbor, Michigan, to learn best practices, such as making pizzas before customers complete their online order or dispatching orders to drivers before they arrive to ensure they don’t have to leave their car. Thus far, franchise owners representing 50 percent of U.S. stores have gone through the training. 

“When we show our customers that we are obsessed with the delivery process or even the ordering process— there are 20 different ways to order Domino’s Pizza—they realize and recognize that means we’re obsessed with every piece,” Weiner said during the chain’s Q2 earnings call. “And what that does is it drives long-term brand love. And that’s why we are and we have to be delivering these aggregator orders, right? We are obsessed with delivery. We do have pinpoint delivery, we do have fleets of vehicles out there. And we do it because we think there’s a competitive advantage to owning the entire customer experience.”

All of these initiatives, working together, will be needed to boost Domino’s faltering delivery business. In the second quarter, the channel’s same-store sales dropped 3.5 percent, rolling over an 11.7 percent decrease in 2022. The chain expects a slight improvement in Q4 because of its updated loyalty program—which will lower the bar for customers to earn rewards—and a significant uptick in 2024 as a result of transaction growth from the Uber Eats partnership. 

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Weiner said aggregator sales have grown to almost $5 billion in the 12 months ending May, and that Domino’s plans to get “our fair share of this market.” 

What does that look like exactly? Domino’s projects more than $1 billion in incremental sales from the third-party deal, an estimate that’s supported by what international master franchisees—who developed a $1 billion aggregator business themselves—have already learned. The pizza chain and Uber Eats overlap in nearly 30 global markets, meaning the agreement will cover about 70 percent of the brand’s worldwide footprint. The key part to note is that orders can be placed on Uber Eats’ platform, but they will be fulfilled by Domino’s drivers so the company has access to crucial customer data. 

“We have here at Domino’s a common sense process for making business decisions,” Weiner said. “We ask ourselves this important question—’Is it the right thing to do for the long-term growth of our brand and the business?’ Our extensive evaluation indicates that participating in the aggregator marketplace will drive net incremental orders over the long-term by tapping into a new group of consumers.”

Weiner said the brand will spend marketing dollars on the Uber Eats platform, but not on driving customers toward the channel. The goal is not to capture every guest—just the right ones. 

“The value customers, we want them to come to Dominos.com,” Weiner said. “But this will be a premium price channel for us, and specifically the higher-income customers that they’ve got are the ones that we’re going to be targeting here. And so, I think if anything, this gives us more levers to unlock value for customers, but also value from our franchisees as far as a higher-income, higher-price marketplace.”

Domino’s does have momentum to work with. For example, delivery service levels finished Q2 nearly two minutes better than last year and the chain has more driver applications than it did in 2019. Weiner added that turnover rates are improving inside corporate stores.

The CEO knows that Domino’s does not currently have the number of delivery drivers it will need to meet the brand’s expected $1 billion-plus incremental sales volume—not yet that is. 

“I’m confident, based on what we’ve learned through what’s been a struggling time to hire drivers, that we know what it takes now, whether it’s the certain hiring practices, if you look at our new training, if you look at actually our corporate stores and just the turnover numbers going down, as well as the incremental fleet we’re talking about. So yes—do I expect to need incremental drivers? Yes. And yes, I expect to be able to get them.”

Domino’s aiming to get its fair share is similar to how the brand approached carryout in 2011. With aggressive action, Weiner said, the channel is almost $2.5 billion larger than it was 12 years ago. The goal is to drive growth even higher by adding 10 points of market share. That equates to roughly $2 billion in additional retail sales. 

Carryout same-store sales rose 5.6 percent in Q2, rolling over 14.6 percent in the year-ago period. One consistent way to keep this growth going is Domino’s fortressing development strategy. 

“The incrementality of carryout when we split the store is even more incremental than delivery from a customer standpoint,” Weiner said. “The second piece is carryout customers, they really want value. And one of the reasons they’re doing carryout is they want to avoid the tip, they want to avoid the delivery fee, and nobody provides better value than Domino’s Pizza. Part of the scale that we’re able to get through our purchasing is then passed along to customers, and I think we’re very competitive from a carryout standpoint.”

Domino’s added 27 net new stores in the U.S., bringing its store count to 6,735. Over the past 12 months, the brand has only closed 16 restaurants. That’s 0.2 percent of its base, and the quick-service average is roughly 1.5 percent to 2 percent, Weiner said. The last time Domino’s closed more than 20 shops in one year was 2016. 

The brand’s same-store sales rose 0.1 percent in Q2, backed by a rise in average check, but offset by lower order counts. Pricing during the quarter was 3.9 percent; it should be around the same in Q3 and decrease to about 2 percent in the fourth quarter. Despite issues with delivery, Domino’s franchisees are continuing to experience EBITDA growth and the chain is tracking to deliver average store profitability of at least $150,000. That’s compared to $139,000 in 2022, $174,000 in 2021, $177,000 in 2020, and $143,000 in 2019.