Domino's Pizza to increase national ad spending

The IT factor

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Doyle also noted that investments in information technology continue to pay dividends for Domino’s. At an Investor Day presentation earlier this year, executives point out that the brands' scale in IT, especially for placing orders over the Internet and on smartphone apps, was a big competitive advantage that would help Domino’s take market share from independents and regional chains unable to make such investments.

The chain now receives more than one-third of its orders from digital platforms. That has produced favorable benefits on labor cost, but that was not always the case, Doyle said.

“It took some critical mass,” he said. “When we were at 10 percent to 15 percent [of sales for online ordering], we thought we were going to see labor efficiencies and we really weren’t. As we’ve gotten up to north of 35 percent of sales, we definitely see that now.”

He added, “There are a number of ways where it shows up over time,” including saving company-owned stores money on utilities, since more online ordering means fewer phone lines need to be maintained in each store.

Many stores still derive their sales from online ordering well below the systemwide average, leaving some moderate runway for more upside, he said.

“More savings will come,” Doyle said, “just not in the hundreds of basis points on the labor line.”

Domino’s operates 388 company-owned units and franchises another 4,540 in the United States and 5,327 restaurants internationally.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN