COVID-19

Pizza companies vie for bigger slice of COVID-19 dine-at-home business

Scott Tong Apr 22, 2020
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Domino's pizza is in the middle of hiring 10,000 drivers. Joe Raedle/Getty Images
COVID-19

Pizza companies vie for bigger slice of COVID-19 dine-at-home business

Scott Tong Apr 22, 2020
Domino's pizza is in the middle of hiring 10,000 drivers. Joe Raedle/Getty Images
HTML EMBED:
COPY

On Thursday, Domino’s Pizza reports earnings in this brutal first quarter of the COVID-19 economy. The entire restaurant industry will be watching.

But there is relative optimism about Domino’s and pizza delivery even in this dismal moment.

Even though earnings for fast-food and sandwich companies are falling by double-digit percentages, pizza delivery earnings are expected to be flat or up a bit.

Especially Domino’s, which is running an ad about how the only hands that touch its $6 pizza are yours, along with contactless delivery.

“Typically we see consumers flock to value propositions in times of uncertainty,” said R.J. Hottovy, an analyst at Morningstar. “With Domino’s $6 anchor price point, that’s hard to match.”

The pizza chain’s other big strength is technology. You can order from the Domino’s app, Twitter, Alexa or Slack. And that’s trending now, said Peter Saleh, an analyst at BTIG.

“People tend to want to order digitally online,” Saleh said. So Domino’s is “essentially set up extremely well to take advantage of this environment.”

Meantime, he said, competitor Papa John’s is still recovering from racial slurs uttered by its founder two years ago. He stepped down as chairman and CEO.

And Pizza Hut faces a challenge, as it depends on people dining in.

What about third-party food delivery app companies, like DoorDash and Uber Eats? Can they compete well against Domino’s delivery? Restaurant analyst John Gordon at Pacific Management Consulting isn’t sure.

“There is some worry and discomfort regarding the third-party delivery agents,” Gordon said.

Still, there is a potential cloud for Domino’s. Andrew Custage, at the research firm Sense360, sees signs that customers may choose to just eat at home.

“As more and more people in this economy are becoming more insecure about their incomes and are focusing on value, we think this is something that all restaurants have to keep in mind,” Custage said.

But Domino’s seems to be confident. It’s in the middle of hiring 10,000 drivers.

COVID-19 Economy FAQs

It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?

The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been signed into law yet.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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