Domino’s Pizza and Ford Motor Co. announce a second round of self-driving delivery vehicle testing.
In 1960 Tom Monaghan and his brother, James, purchased “DomiNick’s” pizza in Ypsilanti, Michigan. Monaghan borrowed $900 to buy the store. A year later, James traded his half of the business to Tom for a Volkswagen Beetle.
Tom Monaghan in 1965 renamed the business “Domino’s Pizza, Inc.” (DPZ) https://dominos.gcs-web.com/ Today, there are over 16,300 stores; including more than 10,000 outside the U.S.
Pizza is a $40 Billion industry worldwide and every second there are about 350 slices of pizza consumed. The pizza industry is largely dominated by the big three: Pizza Hut holds the top spot with 18% of the market – Domino’s Pizza is ranked second at 11% of market – Papa John’s Pizza in third place enjoys 7% pizza lovers.
Competition and Acquisition
Pizza Hut, owned by Yum! Brands http://investors.yum.com/ remains a dominant market leader with a very expansive global presence in U.S. and international locations. They have over 12,000 outlets and the number continues to grow.
When it comes to satisfying customers, Papa John’s Pizza https://ir.papajohns.com/ is at the top spot for the 14th consecutive year delivering quality pizza and leading service according to a national survey. Papa has 4,700 stores worldwide.
In 2019 MTY Food Group acquired Papa Murphy’s at a huge premium. Of the top 10 pizza chains in the U.S., four have been acquired in eight years: Papa Murphy’s, California Pizza Kitchen, Round Table Pizza and Cicis. Papa John’s is the most likely acquisition target in 2019. The liklihood of Domino’s being acquired in the foreseeable future is very low.
Unlike its pizza peers, Domino’s has leveraged technology integration and menu innovation to drive positive sales results and robust profit growth. And, probably why DPZ stock rallied 250% over the past five years.
Domino’s is one of the largest chains to ignore third-party delivery apps Grubhub and DoorDash, relying on its own employees to make deliveries. They run their own online-ordering app and lunched “Anyware” ordering technology that allows customers to order on more devices than ever imagined, including IFTTT and Slack.
“Domino’s DXP” is a specially designed delivery vehicle that can hold up to 80 pizzas and features a warming oven behind the driver’s door and storage areas.
In 2018 Domino’s introduced “Paving for Pizza” grants to each state to help smooth the ride for pizza, one pothole at a time.
Domino’s became the first and only national pizza delivery chain to offer points to loyalty members.
This month Domino’s announced it is launching an E-bike delivery program to attract the pool of potential workers who don’t have cars. The bikes have been tailored to hold up to 12 large pizzas and can reach a top speed of 20 MPH.
Ford and Domino’s team up on a collaboration to understand the role self-driving vehiles can play in pizza delivery. In Miami researchers from both companies investigate customers’ reactions with a self-driving vehicle for their delivery experience.
The gap between Domino’s and 1st place Pizza Hut’s global outlets is getting smaller. At its current growth, Domino’s will soon overtake Pizza Hut in store count, then market leadership will probably follow. In terms of stock performance, it outperformed Pizza Hut with 37.12% YTD growth. Domino’s recently reported its 78th consecutive quarter of international same store sales growth. Ut oh! Domino’s stock today, Friday, August 23, 2019, set a new low 52-week bargain basement low of $226.15.
Are You a Bull or Bear?
August 23, 2019 — Stock: Domino’s Pizza Inc (DPZ) –Share price was $226.15
If you’re a Bullish Mom and think Domino’s Pizza will go up, try the December 20th Expiration Date – CALL $220 Bid; and $210 Ask strike prices. Premium is $7.00 debit to pay = Long Call Vertical Spread on www.TDAmeritrade.com
On the other hand, Mom, if you think Domino’s is bearish and will go down, try the Expiration Date of December 20 – PUT $220 Ask; and $210 Bid strike prices. Premium is $4.20 debit to pay = Long Put Vertical Spread on www.TastyWorks.com
Let’s empower all of us Moms and Dads to Face Down the Wall Street bull!