• Sun. Jun 26th, 2022

Pizza has a delivery problem

ByThomas McGaughey

May 15, 2022

Pizza places have always been experts when it comes to delivery, flexing with remote drop-offs and robot delivery cars. But now they’re facing a problem: not enough drivers.

In early March, Domino’s then-CEO Ritch Allison warned that a driver shortage would be a drag on business. “Delivery driver staffing may remain a significant challenge in the near term,” he said, pointing to a dip in deliveries in the last quarter of 2021 compared to the prior year.

He was right — and the problem has continued into this year. In the first three months of 2022, delivery at Domino’s US stores open at least a year fell by 10.7% compared to the prior-year period, Allison said in an April analyst call, noting that he’s “disappointed” with the delivery results. Overall, sales at those stores fell 3.6% in that period, due in part to staffing issues.

The difficulty finding and keeping employees has hampered businesses across multiple sectors, but the restaurant industry has been hit particularly hard, leading to shorter operating hours and longer wait times for customers. It’s not just Domino’s (DPZ). Pizza Hut, owned by Yum Brands (YUM), is also hurting. The brand’s same-store sales in the United States dropped 6% in the first quarter due to “our delivery channel, where capacity constraints limited our ability to meet demand,” said Yum Brands CEO David Gibbs during an analyst call discussing the results. “This was driven by staffing challenges, mainly from delivery driver shortages that have been felt across the industry.”