Domino’s causes a rare decline in US sales as demand slows and labor shortages increase

Oct. 14 (Reuters) – Domino’s Pizza Inc (DPZ.N) posted the first drop in U.S. sales in the same store in over a decade on Thursday as the world’s largest pizza chain struggled with slowing delivery demand and a tight labor market had led to a driver shortage.

As the containment of COVID-19 wears off, Americans have started eating at restaurants after ordering food at home for more than a year, slowing sales at Dominos, which makes most of its business from deliveries and orders to the Take away refers.

Domino’s added that a severe labor shortage in the United States dealt its business a blow, forcing it to reduce store operating hours and compromise on delivery service times.

To address the labor shortage, Domino’s chief executive officer Richard Allison said the company will maximize the number of deliveries a driver can make per shift.

“I don’t see why drivers should ever have to get out of their cars. Why can’t we get them back to the customer and maximize deliveries per driver per hour,” Allison said on a call with analysts.

The Michigan-based company said its introduction of stimulus check services also helped sales at its U.S. restaurants in the same store decline 1.9% in the third quarter.

According to IBES data from Refinitiv, that was outside of analysts’ estimate of a 1.89% increase and a reported 17.5% increase a year ago.

However, compared to 2019, the pizza chain’s sales in the US were still up 15.6%.

The company’s shares rose 2% in afternoon trading as international sales in the same store rose 8.8%.

Domino’s net income rose 21.5% to $ 120.4 million, or $ 3.24 per share, beating estimates of $ 3.11 per share and dispelling some concerns about rising labor costs Put pressure on the company’s profit margins.

Reporting by Deborah Sophia in Bengaluru; Editing of Uttaresh.V

Our Standards: The Thomson Reuters Trust Principles.


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