USA | Rewarding customers who generously tip delivery drivers.
Domino's has launched the You Tip, We Tip initiative, a promotion that will tip customers who tip their delivery drivers.
"Domino's drivers have been hustling to deliver hot, delicious pizzas since 1960, and we love that customers have been tipping them for their great service since day one," said Kate Trumbull, Domino's senior vice president and chief brand officer.
"But these days, everywhere you go, there's a tip screen. The pressure to tip is real, even when no extra service is provided. So, we decided to flip the script and show our appreciation by tipping customers back."
The concept is straightforward. When customers tip their Domino's delivery driver $3 or more online, they'll receive a $3 coupon to use on the following week's online delivery order. Domino's is the first quick-service restaurant to tip customers for tipping their delivery drivers.
Domino's revenue increased USD 60.2 million, or 5.9 percent, in the first quarter of 2024 as compared to the first quarter of 2023, primarily due to higher supply chain revenues and U.S. franchise royalties and fees, as well as higher U.S. Company-owned store revenues. The increase in supply chain revenues was attributable to higher order volumes, partially offset by a shift in the relative mix of the products sold by the Company and a decrease in the Company's food basket pricing to stores.
The Company's food basket pricing to stores decreased by 1.9 percent during the first quarter of 2024 as compared to the first quarter of 2023. U.S. franchise royalties and fees benefited from an increase in fees paid by U.S. franchisees for the use of the Company's technology platforms, in addition to higher same-store sales and net store growth. U.S. Company-owned store revenues increased due to higher same-store sales.
Its U.S. Company-owned store gross margin increased by 0.6 percentage points in the first quarter of 2024 as compared to the first quarter of 2023. This increase was primarily driven by a decrease in the Company's food basket pricing to stores, which drove lower food costs, as well as sales leverage, which was primarily driven by higher customer transaction counts. These improvements were partially offset by increased labour costs due to higher wage rates.
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