Domino’s Pizza Is Soon Coming to Uber Apps

Domino’s Pizza, hungry to claw back pizza sales now rung up on mobile apps, is reversing its long-held stance against working with food-delivery companies in the U.S.

The world’s largest pizza company by sales and stores signed a deal with Uber Technologies to list its menus on the ride-share company’s Eats and Postmates food-delivery apps across 28 of the pizza chain’s markets, including the U.S., U.K. and Canada, the companies said Wednesday. 

Domino’s Chief Executive Russell Weiner said in an interview that the chain and its operators, which will still deliver the pizzas, aim to generate a billion dollars in new sales by listing its menus on Uber’s apps. Weiner declined to discuss the commissions Uber will charge or other terms of the deal, but said franchisees will profit from those new sales. 

Domino’s shares closed 11.1% higher at $388.59 Wednesday, the highest level since November, according to FactSet.

Apps benefited from pandemic-related lockdowns in ways that aren’t reversing as consumers continue to seek delivery of all types of restaurant food. Pizzerias, which have offered delivery for decades, have lost direct sales as a result, according to restaurant executives and analysts. 

Uber, DoorDash and other third-party apps accounted for 14% of pizza sales in the 12 months ended May 28, up from 4% before the pandemic, according to market-research firm Circana. Those delivery sales rose to $4.7 billion for the period, Circana said.

Domino’s rivals Papa John’s International and Pizza Hut struck deals with food-delivery providers beginning around 2019 to broaden their reach with consumers. Those companies have said that working with apps have helped them secure enough drivers on hand during peak hours. 

Domino’s executives said that the pandemic turned many more people on to ordering food through apps and that the chain can’t afford to pass up those sales, even if Domino’s relinquishes some control and profit from them. Pizza-delivery orders directly from chains aren’t growing, while those from apps are, Weiner said. 

“It’s a multibillion-dollar marketplace that sells food and pizza,” Weiner said. “We need to play in a big category like this.”

Slice shops benefited from a surge in ordering as people sheltered at home after the Covid-19 pandemic hit, but their sales growth is now slowing. Pizza chains made $29.7 billion in sales last year, up 2% compared with 2021, according to market-research firm Technomic. The growth was the slowest of 10 types of fast-food tracked by Technomic.

Pizza chains struggled to find enough delivery drivers to shuttle their pies to people last year, cutting into sales. Domino’s in April said its U.S. delivery same-store sales for the three months ended March 26 declined 2% from last year. Domino’s shares were up 12% this year through Wednesday’s close, while the Dow Jones Industrial Average and S&P 500 were up 4% and 16%, respectively. 

Domino’s for years had said it saw no need to work with apps, instead giving priority to a direct relationship with its customers. It ran a promotion in 2021 offering millions of dollars in free food to customers to highlight its ordering system, seeking to draw a contrast with apps that Domino’s said charged additional fees. 

Domino’s began talks last year with various apps to assess the risks and rewards of listing its pies on their digital marketplaces, Weiner said. The food-delivery companies had developed loyalty programs that were keeping consumers from ordering directly from Domino’s, hurting the chain’s reach, Weiner said. 

Domino’s said it chose Uber given the company’s willingness to share information about customers who ordered on its platforms, its global scale and the demographics of its users. Uber customers are generally younger and more affluent than those who order directly from Domino’s, according to Weiner. 

Sarfraz Maredia, Uber’s head of delivery for the Americas, said Domino’s decision to list its menus on their apps after holding out for so long showed that food delivery has changed. 

“We can bring them a large number of new customers who are either not ordering from them as frequently or who don’t have Domino’s as top of mind,” Maredia said. 

Domino’s menu will begin appearing on Uber’s apps in Las Vegas and three other U.S. markets in the fall, with the rollout expected to extend nationwide by the end of this year. Uber will market Domino’s menu across 70% of the pizza chain’s locations, or around 14,000 restaurants, the companies said. Domino’s agreement with Uber lasts until next year, when the chain can extend to other apps. 

Weiner said Domino’s had no immediate plans to use the apps to deliver pizzas in the U.S., but he said the company hopes the Uber deal will still help franchisees with their labor pool. Operators have better luck hiring drivers when they are busy, he said. 

Write to Heather Haddon at [email protected]