Thursday, February 28, 2013

How Domino's cut its telephone costs

The benefits of online ordering can extend beyond a restaurant’s savings in time and labor, according to Domino’s Pizza. As the off-premise specialist explained today to investors, it’s realizing significant margin gains through lower outlays for older unit technology.

We “realized, as we're taking fewer orders in the stores, we don't need as many order-taking stations and we don't need as many phone lines into the stores,” explained CEO Patrick Doyle. “And it's about $30 a line.”

The revelation was one of several aha moments for listeners. Among the other interesting tidbits that came to light during management’s quarterly call with financial analysts:

--Domino’s is synonymous with delivery, but carryout has grown more quickly during the last three to five years, according to Doyle.

--Rising gas prices have relatively little immediate impact on Domino’s sales or costs. “We have not seen a lot of change in the consumer’s behavior,” said CFO Michael Lawton. “There is more reimbursement to drivers, but it’s not a huge additional cost to stores.” The real wallop, said Doyle, is the spike in commodity costs.

Those revelations were in addition to the much-covered news that Domino’s franchisees voted to raise their commitment to the chain’s national marketing fund to 6% from sales, an increase of half a percent. 

1 comment:

Leslie Lynn said...

Just found your blog and I really like it.

Good post illustrating that by digging below the surface, restaurants can mine some good savings in unexpected places.

All the best,

Leslie Lynn