Domino's pushing carryout business to add to store-level profits

 
Feb. 7, 2013 | by Alicia Kelso

Domino's Pizza is extending its early-week carryout special to Thursday. Previously the promotion — a large, three-topping pizza for $7.99 — ran Monday through Wednesday each week.

Domino's is marketing the extension through a new television commercial featuring Scott Boyle, a franchise owner, and Patrick Doyle, CEO. In the ad, Boyle asks Doyle if the company has "gone crazy" in adding a day to the promotion.

"We continue to focus on giving people what they want and, in this case, taking a great deal and making it even better," Doyle said. "While Scott and I lightheartedly argue during the ad, we certainly agree on the fact that customers deserve a lot of pizza at a terrific value — and that is what the carryout special is all about."

Carryout has grown steadily in the past few years and now makes up about one-third of all U.S. orders. Boyle said a benefit with the carryout special is that it brings customers into the store, where they can witness team members at work and experience Domino's new store design.

During Domino's Investor Day in January, Mike Lawton, Domino's chief financial officer, said the company has been intentional and "careful" with its recent promotions, including a push toward carryout.

"We are trying to encourage carryout, which is an incremental opportunity for us in many cases. Our carryout business continues to grow each year as a percentage of mix and in total and we are going to keep pushing," he said.

The early-week nature of this push is also intentional. The company is leveraging early-week opportunities to try to take some costs out on packaging, Lawton said.

"Early in the week, there is a lot of labor in stores, fixed costs. If we can push a few more orders in there, which we have done with some very specific promotions, that's good for profits at the store level," he said.

However, Lawton cautioned against deal saturation by hosting such promotions.

"In many cases, you are offering what looks like a very good discount to the customer and you are still making more money because of the way they are cost at," Lawton said. "You have to be real careful because you don't want to cannibalize your weekend sales. You're going to be at higher prices (on weekends). As long as we are careful, this is a good way to go."

Read more about marketing and promotions.


Topics: Business Strategy and Profitability , Domino's Pizza , Marketing / Branding / Promotion , Operations Management , Staffing & Training


Alicia Kelso / Alicia Kelso has been a professional journalist for 15 years. Her work with QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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