Domino’s Pizza delivery driver shortage is so severe that 40% of stores ‘use call centers’

If you call a local Domino’s Pizza (DPZ) to place an order, you may be directed to a call center.

Domino’s says the practice has freed up workers to deliver pizza amid a driver shortage that has plagued the company for more than a year.

Using call centers “allows team members to focus on making and delivering pizzas without having to worry about answering the phone, especially during the busiest times in the store,” said Domino’s Pizza’s new CEO Russell Wiener told analysts on an earnings call Thursday. “At the end of [second] quarter, approximately 40% of our stores in the United States used call centers in some way.”

A pizza comes out of the oven at Domino’s Pizza restaurant in Los Angeles, California, U.S. July 18, 2018. REUTERS/Lucy Nicholson

The effort, while smart, may have minimal impact in terms of resolving lost sales due to labor shortages. Delivery sales reported by Domino fell 11.7% in the second quarter from a year ago.

The company’s same-store sales in the United States fell 2.9%, a sharp reversal from a 3.5% increase in the same quarter last year. Same-store sales at company-operated stores in the United States fell 9.2%, while franchise stores fell 2.5%.

International sales also fell 2.2%, worse than the 13.9% gain recorded a year earlier.

“The decline in same-store sales in the United States in the second quarter was driven by lower order counts, which continued to be pressured by the challenging recruiting environment, which had certain operational impacts such as shortened hours and customer service issues at many stores, both company-owned and franchisee,” Weiner explained.

This weak sales led Domino to miss analysts’ earnings estimates for the quarter. Adjusted earnings were $2.82 per share, down 7% year over year and below estimates of $2.89 per share.

Domino’s Pizza shares fell on the news and are down 27% since the start of the year.

“Existing challenges persisted during the quarter (e.g. labor availability, particularly for drivers, and food price inflation),” said Citi analyst Jon Tower, in a note to clients, adding, “although new pain points emerged during the quarter (slowing international same-store sales, mounting headwinds in the foreign exchange market), these new pressures should come as no surprise to investors . »

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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