It is no secret that Jubilant Foodworks, the franchise owner of pizza chain Domino’s in India, wants to gradually shed its dependence on food aggregators like Zomato and Swiggy.
In an analyst call on July 28, the company’s management said that this was one of the major goals of its newly launched loyalty programme which rewards a consumer with a free pizza after he purchases six of them.
On being asked what was the rationale behind not making this deal exclusive to Domino’s own sales channels, Jubilant CFO Ashish Goenka said: “The fundamental premise of our loyalty programme is to drive up order frequency and also attract new customers to our brand.”
“We are making this an omnichannel programme so that the customer can enjoy the benefits irrespective of the point of entry… But the burn can only happen on our own assets which will also drive more traffic to our own assets,” he explained.
In effect, any customer can become eligible for the benefits of the loyalty plan even on orders placed with Zomato or Swiggy. But to avail the benefit, they would have to order from Domino's own channels like its app, website or phone number.
The company said in its Q1 earnings report that it recorded 8.3 million installs of Domino’s app during the June quarter, up from 7.7 million in the previous quarter. Meanwhile, online contribution to delivery sales was 97.7 percent, a slight dip from the 97.9 percent registered in the March quarter.
Meanwhile, Jubilant has told the country’s competition watchdog that it will consider taking some of its business away from food delivery apps Zomato and SoftBank-backed Swiggy if their commissions rise further, according to a report by Reuters.
Industry insiders say that the Domino’s franchise in India already enjoys a comparatively sweeter deal with the food aggregators, with commission rates being much lower than the usual 20-25 percent mark for other restaurants.
"We have not seen any pressure or increase or change in the kind of permission or commercial that we have with these platforms... This has been our concerted strategy that we look to migrate traffic more and more on to our own assets, which gives us better control and better profitability,” Goenka said at the earnings call.
The restaurant chain operator said that it continued with its strong store opening momentum and opened 58 new stores in the June quarter, taking the strength to 1,625 stores.
The company, which also runs Dunkin Donuts in India, entered 12 new cities during the quarter, expanding its reach to 349 cities across India. The company also opened two new stores each for Popeyes and Hong’s Kitchen.
The master franchisee of Domino's Pizza in India, Bangladesh, Sri Lanka and Nepal reported a 63 percent year-on-year growth in consolidated profit at Rs 112.6 crore for the quarter ended June 2022, driven by a low base and strong revenue and operating performance.While the year-ago quarter was affected by the second COVID wave, the sequential growth in the bottom line was 17.3 percent.