Domino's (DPZ) built its business on delivery but labor shortages have made delivery a tough model to deliver on right now. Because of that, the pizza chain wants more customers to pick up their own orders and has encouraged them to do that with a "tip discount."
As part of the "Domino's Carryout Tips: Because You Earned It" promotion taking place from now until May 22, those who order at least $5 of Domino's food before tax online will get a $3 discount — the money they would have spent on a delivery tip or received if working as a delivery driver — to use on a future order.
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Domino's Wants Us to Tip Ourselves Now?
"It takes skill to get pizza from a Domino's store to your door," Art D'Elia, Domino's executive president and chief marketing officer, said in a statement. "As a reward, Domino's is giving a $3 tip to online carryout customers who take the time and energy out of their day to act as their own delivery drivers."
To encourage customers to continue picking up orders themselves, the credit can only be used on carryout orders rather than in-store dining or delivery.
While the offer is being presented as a fun way to tip a "deserving" driver (yourself), the promotion comes amidst a severe nationwide labor shortage — industries from restaurants to tech have struggled to find enough work to keep up with what they want to produce.
In an October earnings release, Domino's CEO Ritch Allison named the shortage as the reason in-store sales dropped for the first time in 10 years. At $449.26, company shares are up 20.96% year-over-year but down 15% in the last six months.
"Staffing has been a challenge most certainly during the quarter as we highlighted," Allison told analysts during the call. "[...] We certainly saw more of an impact in the system around some things like reduced operating hours and some challenges with respect to delivery service times in particular."
But What About the Super Bowl?
The biggest food-ordering day of the year, Super Bowl Sunday is expected to bring with it 12.5 million pizza orders. With Domino's is already fielding delivery difficulties, the tipping discount shows that it is trying to take some of that load off as much as possible.
"Domino's carryout tips come just in time for the biggest football game of the year, which is also one of the busiest days of the year for pizza," D'Elia said. "Domino's typically sells about 2 million pizzas on football's favorite Sunday, so if you're throwing a party and feeding hungry fans, make it a carryout order and get tipped!
