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Domino’s Rebounding Sales And 18K Store Count Create ‘Pizza Fortress’ Versus Rivals

It has been a big couple of years for Domino’s Pizza. Following quarter after quarter of strong sales across the globe and some significant evolutions in its digital strategy, the company just hit a major milestone. Domino’s announced Thursday (July 15) that, with a new store opening in La Junta, Colorado, the chain has hit 18,000 stores globally. For context, the largest quick-service restaurant chain (QSR) by store count is Subway.

Domino’s is the seventh largest chain worldwide, just behind competitor Pizza Hut’s “more than 18,000 restaurants” and well ahead of eighth-place chain Dunkin’s “more than 11,3000”  restaurants around the world. Domino’s describes itself as “the largest pizza company in the world based on global retail sales,” a clear dig at Pizza Hut. The former’s revenue worldwide in 2020 came to over $4.1 billion, while Pizza Hut’s revenue was less than a quarter of that — just over $1 billion.

The news comes as restaurants around the world shift from the near-term survival mindset that carried them through the pandemic to a longer-term view that is becoming possible as consumers return to restaurants. OpenTable’s State of the Industry finds that, while the global number of seated diners each week remains slightly below pre-pandemic levels, down just 2 percent as of Friday (July 16), seatings are very much on the rise. Additionally, the percentage of restaurants around the world taking reservations is growing each week, reaching above 80 percent as of Wednesday (July 14).

As restaurants look toward redesigning stores to incorporate the ways in which the industry has changed since the initial outbreak of the COVID-19 pandemic, new openings pose an opportunity to revitalize the business. On Domino’s most recent earnings call with investors, CEO Ritch Allison noted that the company is excited about growing its store count domestically and abroad.

“We see a really strong pipeline ahead and an opportunity to continue to accelerate that pace of unit opening … giving us an opportunity to do two things,” said Allison “One is to shrink the territory, so we can get more deliveries per hour of delivery driver labor, but also you get that incremental carry-out business, which is a much less labor-intensive business for our stores, which is one of the reasons we want to continue to grow and build that business.”

To that point, the company has made significant investments in its carry-out business recently. For instance, Domino’s recently announced that it is guaranteeing all carside delivery orders — where a Domino’s employee brings the food directly to the customer’s car outside the restaurant — will be brought out within two minutes of arrival.

The company is investing in marketing to create awareness for its carry-out capabilities, an ordering channel that can capture the increased demand for off-premises meals without Domino’s bearing the labor cost of fulfilling delivery orders to consumers’ doors. However, even these delivery orders may not be so labor-intensive for Domino’s for much longer, given that the company is pilot-testing autonomous delivery with robotics company Nuro’s self-driving on-road delivery vehicles.

The store count growth and the focus on carry-out are all part of Domino’s “fortressing” strategy.

“We and our franchisees are continuing to focus on growing our global store count,” the company explained in its 2020 Annual Report. “We have focused specifically on increasing our presence in our existing markets to provide better service to our customers, including shrinking our delivery areas to provide better delivery service and adding locations that are closer to our carryout customers.”

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