Domino’s announced Wednesday plans to partner with DoorDash, further solidifying its commitment to the third-party delivery channel.
Similar to its agreement with Uber Eats, the pizza giant will appear on the DoorDash marketplace, but orders will be fulfilled by its own uniformed drivers. A pilot is underway in select locations, with a nationwide U.S. launch beginning in May 2025 and in Canada later this year.
Domino’s believes using these two aggregators could represent $1 billion worth of annual sales. Currently, delivery mixes around 3 percent.
For years, Domino’s rejected the idea of third-party delivery, but that changed in July 2023 when the brand struck a deal with Uber Eats. At the time, CEO Russell Weiner explained aggregator sales had grown to nearly $5 billion and that it was time that Domino’s got its “fair share of this market.” He added that the brand turned away the option previously because the sales opportunity wasn’t as worthwhile.
Domino’s noted during its Q4 earnings call in February that its exclusivity agreement with Uber expired in May and that it was negotiating with additional aggregator partners.
“The ability to connect seamlessly with DoorDash customers means more sales for Domino’s stores, while efficiently leveraging our brand’s robust delivery network,” COO and president Joe Jordan said in a statement. “Tapping into incremental customers, particularly in suburban and rural markets, is a meaningful opportunity for Domino’s, as our brand continues to open stores nationwide.”
Weiner told investors that the aggregator marketplace is the fastest-growing segment within QSR pizza and that it’s learned plenty of lessons from Uber Eats.
“I think what we’ve learned with Uber is a couple of things,” Weiner said in February during the brand’s earnings call. “One is how to optimize the marketing. So, one of the reasons I’ve talked about kind of the $1 billion maybe taking a little bit longer to get to is we’ve learned how to optimize incrementality. And so, we’re not going after all the volume right away. We want this to grow over time and be incremental and accretive to the profitability of our franchisees. So, we’ve learned how to do marketing better, I think, on this platform. And then, just technology integration, I would expect that if we were to go on another platform that the tech integration would be quicker than it was when we were doing it from scratch.”
DoorDash customers will have access to GPS tracking to monitor the delivery progress of their uniformed Domino’s driver. These orders will also be available to subscribers of DashPass, DoorDash’s subscription program. Domino’s Rewards will only be offered on Domino’s e-commerce platforms.
DoorDash and Uber Eats are the two largest third-party delivery companies in the U.S. at 67 percent and 23 percent market share as of March 2024, according to Bloomberg Second Measure. The next closest is Grubhub at 8 percent.
“DoorDash is excited to welcome Domino’s to our Marketplace across the U.S. and Canada. Domino’s chose DoorDash for our unmatched scale and reach, helping them serve millions of customers and drive incremental sales,” DoorDash president and COO Prabir Adarkar said in a statement. “By joining forces, we’re bringing customers a new choice in the rapidly growing pizza category.”
Domino’s delivery same-store sales fell 1.4 percent in Q4 due to lower-income consumers feeling pressure. Carryout comps rose 3.2 percent.
