Domino's sales now equal from phone and digital orders

Feb. 25, 2014 | by Alicia Kelso
Domino's sales now equal from phone and digital orders

Domino's Pizza opened 58 net new domestic units in 2013, the most the company has completed in recent years. CFO Michael Lawton said during this morning's earnings call that the plan is to continue that momentum in the U.S.

Additionally, domestic same-store sales rose 3.7 percent in the fourth quarter, lapping a positive 4.7 percent in Q2 2012. The brand experienced both an order count and a ticket lift during the period.

CEO Patrick Doyle said domestic drivers include "great promotions, quality products, strong service, compelling advertising and customer-friendly technology innovations."


International momentum also continues to be on the upswing, with 573 net new stores opened in 2013. Domino's international division's same-store sales grew by 7 percent in Q4, compared to positive 5.2 percent in Q4 2012. This marked the company's 20th year of positive quarterly same-store sales.

"We've looked and we can't find evidence of another restaurant brand doing this, ever," Doyle said. "With about 95 percent of the world's population living outside the U.S., the majority of opportunity to grow stores is in international markets and international will generate the majority of our global annual store growth."

In 2013, Domino's experienced "balanced growth" in established markets, such as Canada, the United Kingdom and South Korea, as well as emerging markets, including Brazil and Indonesia. The brand also debuted in Paraguay.


As the brand has touted in recent calls, its technology platforms also continue to drive positive results. Lawton said Domino's invested more than $40 million in capital expenditures in 2013, primarily for technology initiatives, as well as stores and supply chain centers.

"We are increasing our spend as we see continuing opportunities to invest in our industry-leading technology platform," he said.

Domino's recently launched Profiles feature, for example, will be used to provide a building block for other technologies.

"Our latest announcement with Ford Sync would not have been possible if Profiles weren't in place first," Doyle said. "And there are other advances that will be possible to the future because of the flexible and scalable technologies we're introducing. We plan to continue to build the platforms and provide the experiences our customers are demanding, more long lines of what technology companies are doing and be a technology pioneer for the restaurant industry."

Digital sales now account for "well over" 40 percent of domestic sales. Domino's ended 2013 with about $3 billion in digital sales globally.

"It took our company 38 years to hit $3 billion in global retail sales, but just over 5 years to hit this number in global digital sales, which demonstrates the rapid growth of this platform," Doyle said.

About 10 percent of Domino's business comes from walk-ins, while 90 percent comes from order ahead, whether over the phone or through a digital channel.

"We are now basically right at the point where we are doing just about equal amount of sales digitally versus over the phone," Doyle said.


Finally, Domino's completed 2013 without a product launch, coasting entirely on the prior year's Q4 rollout of its pan pizza. That will likely not be the case this year.

"I think it would be pretty unusual for us to go a full year without a new product launch. And so while I think it will continue to see far fewer new product launches from us than we may have done 5 or 10 years ago over the course of the year, I also think 0 is not going to be a common outcome either," Doyle said.

Topics: Domino's Pizza, Franchising & Growth, Marketing / Branding / Promotion, Online / Mobile / Social, Operations Management

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

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