Domino’s Pizza is “experiencing one of the most difficult staffing environments in a long time,” CEO Ritch Allison said during Thursday’s earnings call for the first quarter ended March 28, citing the “very tight labor market” that other operators throughout the industry have been experiencing at this point in the pandemic.
“A combination of COVID-19, strong sales amid the broader economy reopening and the high government stimulus checks is creating one of the most difficult staffing environments delivered in a long time,” Allison said during Thursday’s earnings call. “It puts pressure on our workers.”
One of the most significant areas of labor pressure Domino’s sees is their drivers. Domino’s is famously known for being one of the last quick-service holdouts that has not partnered with any third-party delivery companies.
“The real pinch-point is the drivers,” Allison said. “We’re working on continuing to make that a great job with the best economics relative to other alternative [job opportunities]. We continue our work around fortressing to give them more deliveries per hour, which translates into higher wages; we’re working on technology and operating practices to have them never have to get out of their cars.”
One of the strategies Domino’s is using to ease labor pressures is continued investment in technology, like their recent test in the Houston market with the Nuro driverless delivery technology.
Amid these challenges, Domino’s reported continued sales growth with U.S. same-store sales up 13.4% with overall 1% unit growth as the company ramps up its fortressing strategy.
But Domino’s sees some pressure on carryout, with Allison admitting in Thursday’s earnings call that they “have not been as aggressive” in their marketing of their carryout as they could have been.
“We have not deployed some of the tools this year that we’ve used in the past,” Allison said. “As customer patterns continue to change and economy opens up, we feel confident we have a set of tools to continue to grow our business.”
Domino’s reported a 12.9% increase in company-wide revenues last quarter to $983.7 million, driven by U.S. and international same store sales growth and increases in global store counts. The company’s net income decreased 3.2% to $117.8 million or $3.00 earnings per share, down from $121.6 million or $3.07 earnings per share in the same quarter the previous year, driven by higher income taxes.
Domino’s Pizza added 175 net new units in the first quarter, bringing their portfolio to a total of 17,819 company-owned and franchised stores.
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