Domino’s is going to battle with food delivery services and all those fees.
And the pizza company is going so by giving away free stuff. The Michigan-based company calls it “surprise frees.” That’s a catchy term for free food. Domino’s COO and U.S. president Russell Weiner explained the strategy behind the move.
Basically, DoorDash, Domino’s wants you to go down. Same for UberEats and GrubHub.
“Unlike many third-party food delivery apps, Domino’s provides customers with one straightforward delivery fee,” Weiner said. “Because (Domino’s) know(s) that’s what customers want and deserve. There are no hidden city or service fees with Domino’s.”
OK, so how does it work? Get out your laptop or phone, go to the Domino’s web site and order online. Anyone who orders between now and Nov. 21 — that’ll get you through almost to Thanksgiving — will be eligible for free stuff.
How Does This Domino’s Food Give Away Work?
The pizza company is giving away $50 million in free food. Order and you could see a free menu item pop up like magic. Domino’s said there’s a 7% chance of landing free food on any online order.
Domino’s is doing all this as a way to attract customers who are stunned when third-party delivery services attach last-minute fees. CNN Business explained that some cities across the country paused caps placed on fees. So DoorDash added a fee of up $2 in delivery charges in cities, including Chicago, Cleveland and Denver. UberEats did so in Portland, Chicago, Minneapolis and Boston.
Domino’s has resisted using third-party delivery services. You order off their site and their delivery people bring the pizza. The pizza company doesn’t sub contract its delivery to other services.
In an earnings call back in February, Domino’s Richard Allison addressed the company’s views on other delivery services.
“In 60 years, we’ve never made a dollar delivering a pizza.” Allison said. “We make money on the product, but we don’t make money on the delivery. So, we’re just not sure how others do it.”
Pizza Company Addressed Slower Delivery Times in Earnings Call
The free food also may ease concern about longer delivery times. Domino’s, similar to the rest of the restaurant businesses, is having problems holding on to employees. The company said it is paying higher wages to employees.
“We’ve slipped a minute or two” on average delivery times in some areas, Allison said in an earnings call last month.
“That is a big area of focus for us as we look going forward,” he said.
Allison also said that the company views these third-party delivery companies are Domino’s stiffest competition.
But the company is doing well. In its second-quarter earnings call, Allison said that stores, which have been open at least a year, enjoyed a 3.5 percent jump in sales. Same store sales growth increased by 14 percent.
So, maybe Monday is the lucky day for free food.