What's next for Domino's Pizza? CEO Patrick Doyle outlines some goals
Patrick Doyle gives a presentation on Domino's Pizza to four Michigan Congressmen.
Melanie Maxwell | AnnArbor.com
“Every day, you either get better, or you get worse. You never stay the same.”
Doyle said continuous improvements are the key behind the 53-year-old company’s growing profits — from introducing a new core pizza recipe to growing the company’s technology department.
“We have to wake up every day and figure out how to get better,” he said. “Otherwise, eventually the brand starts to fade.”
Domino’s hosted a tour of its 220,000-square-foot Ann Arbor Township-based headquarters this month. Doyle took time to outline for attendees — which included four Michigan Congressmen — the company’s recent triumphs.
Domino’s reported a net income of $112.4 million in 2012, up from $54 million in 2008, and the company's stock value has shown steady gains for three years.
AnnArbor.com sat down with Doyle after the tour to ask the question: What’s next for Domino’s? Here are some goals Doyle mentioned:
Store redesigns
Earlier this year, Domino’s Pizza rolled out a new look for stores in certain markets. The stores feature open kitchens so customers can see employees spinning dough in the air and prepping pizzas. It also includes interactive features, such as a chalkboard for customers to write comments.
The Domino's Pizza store on Ann Arbor's Plymouth Road features the company's redesigned look.
AnnArbor.com file photo
Doyle said every Domino’s store built now has the new design, and the company is working through a plan for renovating old stores.
“We’re getting really positive feedback,” he said. “It’s still early enough — we have over 100 of them total — that we can’t quantify what kinds of sales lift it’s generating yet, but we do know from the feedback we’re getting that it’s definitely a big step forward.”
“That’s clearly going to be part of what we’re doing with the brand moving forward. We have to have all of our stores looking great,” he continued.
Technology developments
As much as Domino’s Pizza is a food company, it’s also a technology company.
At the Ann Arbor Township headquarters, Doyle said the largest department is technology, which accounts for about 170 jobs out of the 550-person workforce.
From designing phone applications to tracking Domino’s website analytics, Doyle said the company has heavily shifted focus to its still-growing technology department. He said talented web developers and statisticians are in high demand.
“We have laid out years of advancement from a technology front,” he said.
After developing applications for the iPhone, Android and Windows Phone 8, Domino’s plans to introduce an iPad application.
The IT department at Domino's Pizza's headquarters accounts for about 170 jobs out of the 550-person workforce.
Melanie Maxwell | AnnArbor.com
“We want to make the ordering experience as efficient as we can for the customers, because we know that generates happier customers who will come back more. And frankly, in just the near term, it will generate more sales,” he said.
Marketing innovation
As part of the pizza recipe relaunch in 2009, Domino’s Pizza spent $75 million on a marketing campaign to tell the world its former pizza recipe was subpar.
Although risky, Doyle said the campaign paid off.
Doyle said Domino’s has since tried to remain innovative in the marketing world. The company rented an electronic billboard in New York's Times Square to highlight customer feedback, whether it was positive or negative. Domino’s also ran its “Show us your pizza” campaign, where it asked customers to take pictures of their Domino’s products at home and post the photos online.
“All of these things are about showing (customers) that we’re truly listening, taking feedback and making changes,” Doyle said. “What it means is customers have some ownership of the brand perceptions that they didn’t have in the past.”
Domino's introduced its pan pizza in in Sept. 2012.
Courtesy photo
He added: “You’re going to continue to see that.”
He said Domino’s has replaced a lot of its mailbox coupons with digital advertising.
“We still do some of that, but we continue to see the efficiency and effectiveness of digital advertising being terrific and so we keep shifting dollars that way.”
International growth
In 2012, for the first time in Domino’s history, the company’s international store count exceeded its domestic store count. As of March 2013, the company had 5,407 international stores and 4,923 domestic stores.
Doyle said there is plenty of opportunity for expansion overseas — from India, the company’s fastest growing market, to certain markets in Africa.
“Most of our store growth is still going to come from existing markets,” he said. “So, growing bigger in India, growing bigger in Brazil, growing bigger in Russia. Opportunity for us is largely now driven by sheer scale of population. The bigger the country, the bigger the opportunity.”
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Laurie Barrett
Mon, Sep 2, 2013 : 11:41 p.m.
Mmmm . . . I remember when a Dominos pizza was the best you could get and really good.
Tex Treeder
Mon, Sep 2, 2013 : 3:39 p.m.
I liked the old crust better. The new buttered crust is too oily for my taste. C'est la vie.
snark12
Mon, Sep 2, 2013 : 3:33 p.m.
Just a note: 95% of Domino's locations are franchises, meaning Domino's corporate has nothing to do with the pay for the store workers or the delivery drivers. I have no interest in defending low pay or bad working conditions, but chances are those low wages do nothing to help the corporate profits mentioned here. Those decisions are made by local franchisees who benefit from them.
Joshtu
Mon, Sep 2, 2013 : 10:57 p.m.
Yes, you are correct on the low % of Dominos Corporate ownership, with the large volume of locations. However, with all due respect to your perspective, Domino's Corporate has the ability to establish their own "floor" minimum wage and compensation structure for driver reimbursement on deliveries that all franchises would adhere to. For example, Chick Fil A Corporate dictates that all Chick Fil A franchises must close on Sunday and be open only 6 days a week. Also, Domino's dictates their new theatre style design for any new store to open and they have dress code and requirements of personal hygiene on hair length, visible tattoos, etc. The wage structure could be a regulated area for franchisee adherence if Domino's Corporate were to make this ethical responsibility quality of life wage structure a priority; currently they do not. And they are not alone in the fast serve industry in this area.
Joshtu
Mon, Sep 2, 2013 : 1:57 a.m.
To correct a comment inaccuracy, hand tossed, pan and Brooklyn style pizzas and all other non=pizza dough products (cheesy bread, breadstick and parmesan bite)s--all dough products except for one--are made by hand inside the store right before baking. Only one item--thin crust pizza, come in as a premade crust shell and then the pizza is assembled on that shell. The quality and freshness is remarkable and strict quality control for date labeling is in place, and audited continuously with manager's bonus at risk for non-compliance. That said, I am no shill for Domino's. What is not remarkable is the Federal min wage paid out to workers in most of the almost 5,000 Domino's stores of $7.25 that has not changed in over 4 and 1/2 years and is now worth about 70 cents less than when it was first paid in Jan 2009 after the 10 % inflation sin since then. Drivers on the road fare even worse earning usually about $4 per hour when out on deliveries. And, the compensation for using one's car is about 1/3 of the IRS mileage rate or about 18 cents per mile (usually a lump sum of an "avg" run of around $1.40 to $1.90 per delivery, depending on a store's coverage area). Most drivers not only fail to get compensation for war and tear, many shifts result in several dollars short to even cover the cost of gas. Yes, Patrick is the darling of Wall Street and a big hit with delivering a premium product to consumers, but as a great Capitalist Republican he is, complete with opposition to Obama Care and efforts to keep employees at 20-25 hours under the 30 hour Obamacare trigger, he has left the rank and file employees in the dust--or shall I say the gutter--who have rebuilt the company into the success it currently enjoys.
ManA2
Mon, Sep 2, 2013 : 11:59 p.m.
Joshtu is correct.
Joshtu
Mon, Sep 2, 2013 : 3:28 p.m.
JRW: This is the quote from your 9/1 post: "By the way, they make ONE pizza that with handmade crust. The rest are pre-packaged industrial dough made in mass quantities. Their advertising would lead you to believe that all their crusts were "handmade." Not true, based on info from an insider who works there." Now for more comment by me: There is only 1 pre-packaged dough--the Thin Crust--due to the complexity of the product to ensure it is uniform. All other dough, of course, comes in on bakery trays as fresh and never frozen dough balls and the balls are all shaped by hand in the store. There is nothing wrong or no lower quality that a main processing facility produces large production quantities of fresh dough, (or as you try to disparage "mass quantities") and then provides shipments as needed to stores of dough balls, and these are not "pre-packaged" dough balls, they are completely fresh made.
JRW
Mon, Sep 2, 2013 : 2:47 p.m.
We are talking about two different things. The dough itself is made off site, according to a friend who worked there in the past. They may be "shaping" the pizza crusts at the various locations, but the dough is made off site at an industrial location.
Nic F.
Mon, Sep 2, 2013 : 1:48 a.m.
I'll admit Domino's has come a long way since '09 as far a pizza quality has come. Their marketing of course is fantastic because it looks at customer trends, but what about the workers who make their "artisan" pizza? Highlighting their in store workers ability to make a quality product would speak volumes to their customers!
Frank Tanner
Mon, Sep 2, 2013 : 3:24 a.m.
Confused by your comments...not sure what message you are trying to send.
brian
Sun, Sep 1, 2013 : 7:19 p.m.
They need to offer thick cut pepperoni. Yes that will boost sales, at least from me.
JRW
Sun, Sep 1, 2013 : 5:05 p.m.
Maybe Pizza Man Brandon should get his old job back.......and use his "commercialization" skills inside those cardboard boxes instead of the in the skyboxes in the stadium. That Kraft noodle would look great in front of Dominoes headquarters.
JRW
Sun, Sep 1, 2013 : 4:59 p.m.
"We have to wake up every day and figure out how to get better," Hahahaha Do they all have insomnia? Still cardboard crust and canned sauce. By the way, they make ONE pizza that with handmade crust. The rest are pre-packaged industrial dough made in mass quantities. Their advertising would lead you to believe that all their crusts were "handmade." Not true, based on info from an insider who works there.
JRW
Mon, Sep 2, 2013 : 2:49 p.m.
Frank: The dough itself is made off site, according to a friend who worked there in the past. They may be "shaping" the pizza crusts at the various locations, but the dough is made off site at an industrial location. Handmade only means they are shaping raw dough into crusts, not that the actual dough is made on-site.
Frank Tanner
Sun, Sep 1, 2013 : 9:18 p.m.
You need to check your facts. Your "insider" obviously is delusional and I am sure Domino's would be interested in who is giving out false information. Especially since you state they work for the company.
C'est la vie
Sun, Sep 1, 2013 : 2:11 p.m.
The goals don't seem to include passing along a share of the "growing profits" to employees in the form of higher hourly wages. Too bad.
Lou Perry
Sun, Sep 1, 2013 : 12:41 p.m.
Who was the members of congress?
ManA2
Mon, Sep 2, 2013 : 11:58 p.m.
It's cutting off the link. Not sure how to do it. But the answer is Dingell, Walberg and Bentivolio. The article and photo are mostly about Dingell. You can google the title which is: Political insider: Domino's tries recipe for Congressional bipartisanship From The Detroit News: http://www.detroitnews.com/article/20130822/POLITICS02/308220037#ixzz2dmbXaSEr Sorry I'm not better at links.
Thaddeus
Mon, Sep 2, 2013 : 5:58 p.m.
ManA2 - Can you provide an updated link? When searching for it, I just get: http://www.detroitnews.com/Story_not_found
ManA2
Sun, Sep 1, 2013 : 12:47 p.m.
http://www.detroitnews.com/article/20130822/POLITICS02/308220037
Nick Danger
Sun, Sep 1, 2013 : 12:05 p.m.
Profits grow as Dominos lays off older workers.Typical American corporate stragety cut jobsto increase profits for the entitled
Angry Moderate
Sun, Sep 1, 2013 : 9:29 p.m.
I wasn't aware that Domino's is a charity that hands out permanent jobs whether they need the workers or not.
DexterDad
Sun, Sep 1, 2013 : 4:49 p.m.
Nick is correct. I know of at least a half-dozen 45-and-older folks who have been let go by the IT department alone in the past few months. Several more are looking to jump ship before their time comes.
Tom
Sun, Sep 1, 2013 : 3:14 p.m.
And who are the "entitled?" You mean retirees who own Mutual Funds and the stock itself, pension funds? And for those few that are in management who might earn higher salaries, what do you think they do with their money? Put it in a mattress or do they spend it, invest it, or give it to charities? I think you need to re-think your assumptions.
A2comments
Sun, Sep 1, 2013 : 12:53 p.m.
Cite facts.