“Each time we take a look at technology we look at all of the options,” says Domino’s CEO Ritch Allison. “Do we build it? Do we partner? Do we go out and buy something. For the things that are really core to our business like our point-of-sale system and our digital ordering capabilities, we believe we have to own those. But there are other places like new autonomous delivery where we’ll go out and partner with someone, like Nuro for example, because we’re not going to build the car itself. We’re going to build the interface around it for the customer.”
Ritch Allison, CEO of Domino’s, discusses how the company is using technology, innovation, and reimagined stores to drive growth.
We Look At All Technology Options
We’ve had a very strong and profitable delivery business for many years now. So unlike a lot of the other restaurant brands, we don’t have to decide to get in or not or try to figure out which of these third-party aggregators is ultimately going to be the winner at the end of this shakeout. We’re really focused on continuing to build that delivery business with our franchisees and doing it in a profitable way for them. We believe that means doing it on our own.
Each time we take a look at technology we look at all of the options. Do we build it? Do we partner? Do we go out and buy something. For the things that are really core to our business like our point-of-sale system and our digital ordering capabilities, we believe we have to own those. But there are other places like new autonomous delivery where we’ll go out and partner with someone, like Nuro for example, because we’re not going to build the car itself. We’re going to build the interface around it for the customer.
We’ve Got a Terrific 4-Wall Economic Model
Most certainly construction costs have gone up with the combination of tariffs on steel and aluminum. But also we’re in a really robust labor market right now and so wages have risen in construction as well. The good news for us is we’ve got such a terrific 4-wall economic model that even with some of those rising costs we’re still able to deliver to our franchisees a great investment. We are averaging two and a half year average paybacks for Domino’s Pizza today in the US.
We’re not really seeing (much impact) in our business with respect to trade tensions. The great thing about our business model outside the US is we have international master franchisees. They’re locally owned, they employ the local citizens, and we buy almost all of our ingredients locally as well. We’re really building businesses that are benefiting the economies of these international markets that we operate in. So in places where we’re growing rapidly like China, India, and Brazil, we’re an emerging part of the economy in those countries.
85 Percent of Our Global Footprint Reimaged
We have grown our carryout business significantly over the course of the last ten years. A big part of that is having a great value offer for our customers. It’s about having the reimaged stores. We’ve now got 85 plus percent of our global footprint reimaged. Also, it’s about getting more stores on the map closer to our customers. The number one criteria when consumers choose is convenience with carryout. So we’re going to continue to build more units and get closer and closer to them.