60% home deliveries are now done in 20 minutes: Domino’s
PremiumThe shorter delivery time has helped improve customer experience, and the company is seeking to capitalize on it by opening new outlets closer to consumer homes in existing markets
NEW DELHI : Domino’s has reduced the delivery time for over 60% of online orders from 30 minutes to 20 minutes, Jubilant Foodworks Ltd, which owns exclusive master franchise rights of the international pizza chain in India, said during an earnings call on Thursday.
The shorter delivery time has helped improve customer experience, and the company is seeking to capitalize on it by opening new outlets closer to consumer homes in existing markets, it added.
Domino’s opened 75 outlets in India in the December quarter—the highest ever by a franchisee worldwide in a quarter. However, it also shuttered 15 stores during the same period.
To be sure, Domino’s had first announced its 20-minute delivery initiative during its second quarter earnings call in October. As a part of the initiative, the company has put in place a “fortressing strategy", to aggressively expand its store network in existing markets to bring down delivery times further. Domino’s first piloted the initiative in its home market in the US in 2012. “We have made very good progress in the last two quarters. As I mentioned earlier, more than 60% of our orders now get delivered in under 20 minutes. It led to significant improvement in customer satisfaction scores," Pratik Pota, chief executive officer, and whole-time director, Jubilant Foodworks, said.
Promoters of HT Media Ltd, the publisher of Mint, and the promoters of Jubilant are closely related, but there is no promoter cross-holding.
Jubilant currently operates 1,500 Domino’s stores in India. Last year, the company management had said it could open over 3,000 stores.
“One big driver, therefore, of our fortressing strategy and store-split strategy is linked to shrinking the delivery areas and get to customers faster. So, you will see us maintaining this approach and this strategy as we go ahead. You will see us fortressing markets, but you’ll also see us enter new towns and grow the network in that manner as well," Pota said.
Driving faster deliveries is a very “deliberate" and “important" part of the pizza chain’s strategy, despite a short-term impact on revenues of large mother stores, he added.
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Analysts said given the consumer demand for quick delivery, the move is a positive. Small stores in existing markets help to cater to quick delivery, said Abneesh Roy, executive vice-president, institutional equities, Edelweiss Securities.
Meanwhile, on Wednesday, the management’s decisions to stop disclosure of same-store sales growth (SSSG) going forward while only listing like-for-like (LFL) growth sales growth surprised analysts. LFL refers to the year-over-year growth in sales for non-split restaurants opened before previous financial year.
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