Dive Brief:
- Domino’s U.S. carryout business grew comparable sales by 5.8% in Q2, which was also the highest quarter of average carryout orders in the company’s history, CFO Sandeep Reddy said Monday during an earnings call.
- The company expects comps for both delivery and carryout to be positive for the year, Reddy said. Delivery comps rose 1.5% in Q2.
- Growth in carryout was one of the primary drivers behind the chain’s loyalty program redesign in 2023, and active users continue to grow, CEO Russell Weiner said, adding that he expects Domino’s Rewards to be a multi-year driver of sales.
Dive Insight:
Carryout gains were partially responsible for Domino’s 3.4% same-store sales jump. Parmesan Stuffed Crust pizza, growth in third-party delivery partnerships and strong value perception also contributed to this bump.
Domino's U.S. carryout versus delivery same-store sales
Domino’s is reaping the benefits of offering rewards at lower point thresholds, making it better for infrequent users to redeem free items more quickly. Users can redeem at 20 or 40 points versus 60 in the past, which can attract more carryout customers. Carryout orders typically have a lower ticket compared to delivery. Rewards can promote more spending, especially at the lower point redemption levels.
“Because essentially, people are getting side items. And so the ticket on our 20- and 40-point item checks tends to be higher than when you're getting a free pizza,” Weiner said.
Management didn’t provide an update on total reward users, but the chain added 2.5 million members last year, reaching 35.7 million. The chain is also in the process of testing a new e-commerce platform with a website that will improve the carryout experience. That platform is expected to be rolled out during the year.
“We continue to acquire more customers into that loyalty program, and we are seeing the frequency build compounding over time with the carryout business,” Reddy said.
