Domino’s Has A Swiggy Problem
Domino's faces a stiff competition from online restaurant search and ordering services like Zomato and Swiggy as they threaten to eat into its sales.
Both the aggregators are now more popular than the pizza chain. More people searched for Zomato and Swiggy than Domino's as on Dec. 1, according to Google Trends. While Zomato edged past the pizza maker earlier this year, Swiggy overtook it recently.
- Note: Numbers represent interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity, 50 means that the term is half as popular and a score of 0 means there wasn't enough data for the search.
Same-store sales of Jubilant Foodworks Ltd., the operator of Domino's in India, could slow down because of the competition, multiple brokerages including CLSA and Goldman Sachs said. That's because they charge a fee for deliveries from restaurants, including Domino's, and also offer more choices.
The pizza chain operator, in its post-earnings conference call, admitted that its employee costs have gone up as competition forced it to increase salaries of delivery fleet to stem attrition.
Jubilant Foodworks said the company will stop using third-party manpower for delivery. Both Swiggy and Zomato still take Domino's orders when BloombergQuint checked.
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