Video source: YouTube, Domino’s Pizza
Domino’s Pizza Inc (NYSE: Chart DPZ - $311.51 3.92 (1.243%) ) is taking on third-party food delivery platforms that charge extra fees by giving away $50 million worth of free food to random customers across the US.
On Monday, the Ann Arbor, Michigan-based chain unveiled its “Surprise Frees” promotion, which Domino’s said is in response to the “surprise fees” charged by companies like Uber Technologies’ UberEats and DoorDash Inc.
Any customer who orders Domino’s delivery online directly through Nov. 21 is eligible to receive a giveaway item, like a hand-tossed pizza, boneless chicken wings, stuffed cheesy bread or a chocolate lava crunch cake.
In a statement, Russell Weiner, chief operations officer and president of Domino’s US, said altogether the chain will give out more than 5 million “Surprise Free” during the promotion.
“Unlike many third-party food delivery apps, Domino's provides customers with one straightforward delivery fee, because we know that's what customers want and deserve. There are no hidden city or service fees with Domino's, as we've been working to provide the best delivery experience at the best value to customers for more than 60 years, and that's not stopping any time soon,” he said.
Free food will be added to one in every 14 orders, giving customers about a 7% chance of winning each time they order, according to Domino's.
Over the past year, local governments around the country have restricted how much third-party delivery apps can charge restaurants in order to help struggling businesses during the pandemic. As a result, UberEats, DoorDash and other platforms have added fees, which often are not made clear until just before checkout.
Domino’s has resisted offering deliveries through a third-party and continues to rely on its own network of drivers to get food to customers’ front doors.
Chief executive officer Richard Allison has acknowledged that delivery apps represent some of Domino’s “biggest competition,” but said he’s “struggled” to understand “the long-term economics in some of the aggregator businesses,” according to CNN.
Allison has also said that it “doesn’t make sense economically” for Domino's franchisees to use the apps.
“In 60 years, we’ve never made a dollar delivering a pizza. We make money on the product, but we don’t make money on the delivery,” Allison said. “So, we’re just not sure how others do it.”
Source: Equities News