Free Press beat writer Dave Birkett decides to exercise his sweet tooth and dig into Ford Field’s new 4-pound doughnut before the Lions’ home preseason game on Facebook Live on Aug. 18, 2016.
“Employed people buy more pizza than unemployed people,” says CEO Patrick Doyle of Ann Arbor-based Domino’s
The chieftain at the nation’s largest pizza delivery company has a simple recipe for predicting how the economy will affect his bottom line — people with jobs buy more pizza
“We have run all of the regression analyses on our business and it all comes down to one thing for us and that’s employment,” Domino’s Pizza Chief Executive Officer Patrick Doyle said in a one-on-one interview in his office last week. “Employed people buy more pizza than unemployed people. And to me, that’s the ultimate measure of the strength of the economy.”
As nation’s economy continues to recover, albeit slowly, Doyle expects to hire more people this year at Domino’s sprawling Ann Arbor headquarters (A herd of buffalo literally roam in a nearby fenced area visible to employees inside Domino’s offices).
And he says he’s more likely to add numbers in manning new technology than in testing tomatoes for its pizza pies.
“We’re absolutely growing in Michigan,” Doyle said. The state only has franchise, not corporate stores here. But those stores, he said, are still expected to grow in number. The company’s headquarters is also adding on average more than one employee a week, more often than not in its information technology department, according to Doyle.
“We currently have about 50 open positions,” company spokeswoman Danielle Bulger said in an email Friday. “We anticipate hiring about 100 team members at headquarters through the end of the year.”
The company has 720 employees, with an IT department manned by 264 workers who monitor the company’s sales from a multiscreen command center in real time, among their other duties.
“We’re going to continue to invest,” Doyle said of hiring plans. “We’re pretty optimistic.”
The drive to boost the ranks at Domino’s is fueled in part by changing consumer habits. At Domino’s, you can now order by Twitter, Amazon Echo, Ford Motor’s SYNC and iWatch among other alt-tech platforms.
Some options don’t even require words. Customers put in their pepperoni pizza order by using a online-symbol emoji or just tapping open a smartphone app armed with preselected personal preferences for “zero-click” ordering.
Pizza cyber-security
But as Domino’s encourages its customers to create detailed individual profiles to ease the ordering process, the company recognized the growing need to protect that data.
Six or seven years ago, the company had a cybersecurity team “of roughly zero,” Doyle said. Today, it numbers 25.
“They’ll never be a day where I don’t think about it,” the CEO says of the potential threat from hackers.
The other concern that occupies Doyle every day is food safety. Domino’s is now rolling out salads to all of its stores in the U.S. It would have been cheaper to assemble them in the stores, but Doyle said the company chose to prepackage them as an extra precaution to lessen the odds of food-borne illness.
Founded in 1960 as a private company, Domino’s Pizza went public in 2004 and now has more than 12,900 stores in more than 80 markets. Doyle has been at the helm since 2010 and the company’s stock value has zoomed more than 16 fold based on the price last week. One of Doyle’s first bold acts: altering Domino’s pizza recipe, admitted to the change publicly and then promoting the new pizza by reciting what customers used to think of the old product (Hint: Many didn’t like it).
International pizza
Doyle used to head up Domino’s international divisions and says he sees some of the greatest opportunities for growth in African countries south of the Sahara Desert. Domino’s now has stores in Nigeria, South Africa and Kenya.
“We have a really good start there,” Doyle said, noting the region’s consistent economic growth and rising middle class.
India has been another stronghold for the company with about 1,000 stores. But growth in China has been more slow-going, according to Doyle.
Among the hurdles: the Chinese consumer took time to adapt to at-home delivery – customers once preferred sitting down in restaurants – and dairy products, which were once completely foreign to the country’s diet. Still, Doyle says that the company now sees more growth in the near term.
Global retail sales at Domino’s last year exceeded $9.9 billion, with more than $4.8 billion in the U.S. and nearly $5.1 billion internationally. In the second quarter this year, Domino’s beat Wall Street expectations with global retail sales of more than $2.4 billion. More than half of U.S. sales streamed in from digital channels.
Many Wall Street analysts applaud Domino’s recent financial performance and its share gains on rival Pizza Hut, the market leader for the overall pizza restaurant business.
In the second quarter of this year, Domino’s put up earnings of 98 cents per share, up over 81 cents per share reported during the same quarter last year. Sales also grew to $547.3 million.
Same store sales for Domino’s U.S. operations were up 9.7% versus the year-ago period. The international division also posted strong results with quarterly same store sales growth of 7.1%, marking the 90th consecutive quarter of same store sales growth.
After its bold recipe change and the rollout of some new products including salads, Domino’s latest initiative is not in product improvement, but in presentation, Doyle says.
Stores across the chain are getting refreshed, with many adapting a “theater” style interior with glass walls and an open kitchen to let customers see how fresh dough stretched by hand turns into pizzas. That’s in part to compete with new pizza competitors who already showcase their work, Doyle said. As much as 40% of the companies transactions are done in person through carryout service, according to Doyle, making it necessary to improve the store experience.
“Our stores were just not terrific when you walk in,” he says of Domino’s outposts.
Contact Matthew Dolan: 313-223-4743 or msdolan@freepress.com. Follow him on Twitter @matthewsdolan.
Source: Freep.com
