Domino's will 'tip' customers $3 if they order for pickup as the chain tries to convince customers to skip delivery

• Domino's is giving customers who pick up online orders a $3 coupon "tip" toward their next purchase.
• Domino's CEO noted a lack of delivery drivers in October 2021.

Domino's is offering a $3 discount to customers who pick up their own orders, and it's the latest sign of the impact a lack of delivery drivers is having on the chain.

The pizza chain is characterizing the coupon as a tip for buyers who take "the time and energy out of their day to act as their own delivery drivers," Domino's executive president and chief marketing officer Art D'Elia said in a statement. The tip comes in the form of a coupon code that customers can use on another carryout order in the next week.

The deal comes ahead of the Super Bowl, and will last through May 22, Domino's said. The pizza giant typically sells two million pizzas on Superbowl Sunday alone, one of the biggest days for the industry, D'Elia said.

Domino's has been having trouble hiring delivery drivers for a while. In a third-quarter earnings call in October 2021, CEO Richard Allison acknowledged the labor shortage as an issue for the chain, saying "staffing has been a challenge."

Allison said that overall staffing levels in the quarter were lower in the first half of 2021. While there were labor shortages across the business, the chain was most lacking drivers, he said. To keep sales up, Domino's told investors that it planned to focus on promoting carryout orders, which don't require delivery drivers. This newest promotion announced three months after that earnings call seems to be part of the plan to direct customers away from delivery.

A lack of delivery drivers could pose a real problem for the chain's bottom line. Domino's saw a drop in same-store sales for the first time in 10 years in 2021 after enjoying a pandemic-induced boom. Pizza chains had a major advantage over competitors for the two years. They already had the infrastructure and customer base for delivery — on-premise dining was a much smaller part of their business than other chains, so they had less business to lose. Growth was strongest in the early days of the pandemic, with same-store sales growth topping 10% in the second, third, and fourth quarters of 2020.

Demand hasn't necessarily dropped off, but low staffing could make fulfilling orders harder. Difficulty hiring and retaining workers isn't unique to Domino's or the pizza business. Business owners across the industry say they're unable to find staff and in some cases even cite a lack of desire to work, while workers say they can demand better pay and benefits in the tight labor market.

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