Domino’s strong growth down to tech innovations

Domino’s recent raft of innovations in Australia and New Zealand – including its pizza tracker and ‘Internet of Food’ – has helped it to drive a 17 per cent growth in both revenue and same store sales, the company said today.

“The company’s focus on…continuous technology enhancements and innovation has seen Domino’s results significantly surpass expectations,” group CEO and managing director Don Meij said in the company’s half year 2017 market presentation this morning.

It’s recent trials of drone deliveries in New Zealand, and further investment in automated deliveries, were a “meaningful part of our strategy over the next two to three years”, Meij said, adding that “this is not a gimmick”.

Meij said the company would be launching an “artificial intelligence first” initiative next month which would be “one of the biggest launches in our history”.

Domino’s Live Pizza Tracker app – which allows customers who are picking up in store to time their arrival so the pizza is ready when they are – had a “strong impact” on growth in online ordering in the half (up 32 per cent), the company said.

The app, along with efforts to remove the barriers to ordering online, meant Domino’s orders now represented 2.8 per cent of all online retail transactions in Australia, Meij said.

Taking a slice

The half year announcement comes just days after a damning Fairfax investigation which uncovered “widespread underpayment of wages”. Part of the problem, quoted insiders suggested, was the pressure on franchisees to keep their businesses viable.

The situation is exacerbated, the investigation suggested, by the cost of Domino’s technology such as GPS trackers, quick-cooking ovens and digital menu boards.

However, some franchisees were quoted as saying the new technologies grow customer numbers.

In its results presentation today, the company said that franchisee profitability was increasing and was set to break a new record in the current financial year. It added that it had a “zero tolerance” towards under-payment of wages or under-reporting of sales.

Ongoing investments in technology are “helping our store managers and franchisees become more efficient and productive”, the company said.

In the last half year, Domino’s has launched its MyDomino’s App – a portal for franchisees and workers, and rolled out a new rostering system. The SaaS rostering platform by Brisbane-based Tanda was evidence that the company continued to invest in its workers, Domino’s said.

The company also forecast that labour costs as a percentage of sales would increase by up to 2 per cent in the coming year. However, it added that initiatives including Tanda would “not only cover these labour increases, but exceed them”.