ORLANDO, FLA. — Despite being the leader in the U.S. pizza delivery business with a 28% share, Domino’s still sees “substantial” opportunity for growth, said Patrick Doyle, president and chief executive officer of the Ann Arbor, Mich.-based company.
|Patrick Doyle, president and c.e.o. of Domino's|
"As large as we are, we still will only sell about one out of seven pizzas sold in the U.S. tonight and even though we have an important market share, (there is) still very substantial room for growth, even in the core of our business on the delivery side,” Mr. Doyle told participants at the ICR Conference held Jan. 9-11 in Orlando.
Mr. Doyle said Domino’s has recovered from some lean years by getting brand momentum going again in the United States, first by starting and focusing on the quality of the pizza chain’s food.
“At the end of the day, quality of the food is always going to be the most important attribute for any restaurant company,” he said. “We had to get that right.”
While focusing on the quality of the food started the momentum, Mr. Doyle said the real key for Domino’s has been a business approach geared toward permanently improving the experience of the company’s customers.
“What you don’t see from us is product of the month,” he explained. “Everything we invest in are things that we believe, if it’s a new product, are going to be permanent parts of our menu. A lot of investment obviously around technology as that has driven our business, but the things that we are doing are designed to incrementally improve the experience of our customer and our measure of success is, ‘Is the customer experience better today than it was a year ago?’ If we continue to move that bar consistently, we believe that’s going to generate the best return on investment for the dollars and the time and the advertising that we are investing. That has led to total retail sales of both same-store sales plus store growth and average growth rate of our domestic business since we really started the turnaround at the beginning of 2010 of almost 8%.”
Although Domino’s primarily is a delivery business, Mr. Doyle said about a third of the company’s sales are carryout, and the company needed to revamp its stores to improve the customer experience. He said Domino’s will have substantially completed reimaging all of its stores by the end of 2017.
Another important aspect of Domino’s success has been the fact the company controls its own supply chain in the United States and Canada. Mr. Doyle said this control allows Domino’s store managers and franchisees to more easily order food and get it delivered.“Most of our deliveries are at night when our stores are closed,” he explained. “Our drivers have the keys to the stores. They show up in the middle of the night when nobody is there. They bring the food in. They rotate the stock in the walk-in. The manager comes in the next day, and the comment we hear often is that the food fairy was here. It just appears. We think it’s an important competitive advantage leveraging the scale of the business from an efficiency and purchasing standpoint, but also making the manager’s job easier to run our store.”