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Domino’s Subs

As if the sub sandwich category wasn’t crowded enough, Domino’s Pizza is adding sub sandwiches to its menu and delivery service.¬† The $4.99 oven-baked sub sandwiches will include classic favorites like Philly Cheese Steak and Chicken Bacon Ranch.

The move comes five months after Pizza Hut began delivering baked pasta dishes as well as pizzas. And it will be a wake-up call for sub shops Subway and Quiznos, which find themselves competing with pizza chains.

For the pizza giants, the message is clear: If pizza sales aren’t growing in a sour economy, maybe something else will. Besides the hot subs and baked pasta, some pizza chains also deliver chicken wings.

It’s an attempt by the pizza players to try to get back into being a growth industry,” says Ron Paul, president of Technomic, a restaurant research firm. “They’ve all lost their mojo.”

They also are further conflating a fast-food world that’s grown jumbled. McDonald’s (MCD), Burger King (BKC) and Wendy’s sell salads and chicken. Subway and Dunkin’ Donuts have tried pizza. Arby’s, once roast-beef-only, now makes a killing on Market Fresh deli sandwiches and sells toasted subs.

Domino’s U.S. same-store sales fell 5.4% in the second quarter after a 5.2% decline in the first quarter.

Brandon says the move should boost Domino’s lunch business and expects lots of calls from groups of office workers. (The minimum delivery order is $8 to $10, depending on location, and delivery fees are $1 to $2.)

Rivals are unimpressed.

Pizza Hut delivers hot sandwiches regionally but is focused on growing its national pasta delivery sales, says Brian Niccol, marketing chief.

Tony Pace, marketing chief of the Subway Franchisee Advertising Fund Trust, says, “Domino’s is watching our success and wondering how to get a piece of the action.”

Half of Quiznos’ locations deliver, and two-thirds will by year’s end, says Rebecca Steinfort, senior vice president.

The trend is clearly delivery to prevent a loss of sales, and online ordering.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
5 comments
Harmon
Harmon

[quote comment="397579"]I love this latest food fight Domino's will make a dent in the overall sandwich category of sales for one reason: DELIVERY. This is Subway's Achilles heel-they have no delivery mechanism. Quizno's is trying delivery with limited success as their franchisees are not happy about the added costs, efforts and their general food costs anyway. I heard Dunkin Donuts just got into the flatbread sandwich game too. Let us see how this plays out..... see my blog on mrfranchiseman.com[/quote] Do you know if delivery is by their own employees or are they outsourcing it?

mrfranchiseman
mrfranchiseman

I love this latest food fight Domino's will make a dent in the overall sandwich category of sales for one reason: DELIVERY. This is Subway's Achilles heel-they have no delivery mechanism. Quizno's is trying delivery with limited success as their franchisees are not happy about the added costs, efforts and their general food costs anyway. I heard Dunkin Donuts just got into the flatbread sandwich game too. Let us see how this plays out..... see my blog on mrfranchiseman.com

Quiznos Owner
Quiznos Owner

Why it won't affect Quiznos or Subway? It's really easy to answer. You don't call Domino's or Pizza Hut for a sandwich. You just 'DON'T'. Sandwiches and pizza are a completely different thing right now, as they have been in years past. Right now for delivery you have primarily 3 different options, Pizza, Chinese and Sandwiches. Sandwiches... A far stretch. Quiznos would love to be a part of that category, but honestly, I don't see it happening. Catering maybe, does Domino's cater? Of course Domino's wants to grab onto some kind of $5 sub sandwich thing, but, what is their minimum order price for delivery? You're honestly going to tell me that Domino's will drive > 8 miles to deliver a sandwich priced at 4.99? Fuel prices are through the roof, delivery drivers are a constant turnover. It's not practical or prudent to think that Domino's are actually selling a lot of these Subs. A national commercial campaign is great and their commercials are enticing and hilarious. But when I think of 'sandwiches' I don't think, 'I should call Domino's.' And when I think of pasta i don't think, hell, lets call 'Pizza Hut.' Unless they take HUGE marketing campaigns to change the direction/focus off of pizza and focus on sandwiches/pasta it will never affect Quizno's or Subway. Right now, the economy is crap, and all the suits are getting complaints from franchise owners from sales being down. Thats whats happening. In affect, Domino's, Pizza Hut, Quizno's, Subway etc etc etc.. Are offering new services instead of discounted prices. Thats great, but coupons and discounts get people through the doors. You shouldn't have to scrape together a bunch of money (which, by the way, NOBODY has right now, including customers) to offer a service that could possibly pay of in 2 to 3 years. It just doesn't make sense. What a horrible time to ask franchisees to shell out more money for something that could break even. I got off topic I'm sorry. Regarding franchises, all of them, if we can weather this economy storm for the next 18 months I'm sure well all be fat and happy again. Just watch everything you do, and count the pennies. My 2 cents, Quizno's Owner / Fast food burger place owner

fuwafuwausagi
fuwafuwausagi

It was written: This is a natural extension and long overdue. Subs are simple to make, can use the same ovens, uses many of the same ingredients as pizza, and compliment the pizza brand. Most of the sub brands I can think of even have pizza subs. My reply: Yes and no, I would think it really depends on the store. For instance a high volume shop, that really cranks pizza may find its profitability destroyed by this. You may run into a space problem. You may run into quality control problems in terms of food costs (the most likely) . And you may run into spoilage issues. And it may simply destroy the operational side of things. For instance a cheese, mushroom, and sausage (assuming the work station is prepped) can be easily thrown together in under 1 minute by an experienced worker. My pizzeria concept does have baked sandwiches. But it was designed from the ground up with them, and because of the design the only waste is associated with the bread products, additionally they are only available on Friday/ Saturday night and for football events. The reason for the limited availability is found in the 1 minute to throw a pizza. During week days we can run skeletal shifts because 1 person can crank the pizzas, throw in a few sandwiches and it is different story. Back logs build, deliveries bog, pick-ups get jammed, it is really ugly, so we needed to be able to justify having and extra worker who effectively does the sandwiches and a lot of prep for the week in any down time. So I would suggest it depends on if the sandwiches can be operationally fitted into a kitchen, if the additional labor, is worth the overhead, and if you have some assurance that your waste will not increase. What I see happening is those carefully controlled pizza portions so necessary to profitability getting lost in the needed for speed when sandwich orders come up. In a tightly controlled owner operator environment that may not be a concern, but if you are multi unit owner who does not share ownership it may be problematic. My opinion is, you always need to make sure what you are adding is a profitable dollar and will not effect your current operation. I would love to see if this is sales neutral, where many people who would have ordered pizza now opt for sandwiches rather than purely revenue enhancing. By the way, if I was trying to explore new markets I would lean to pasta dishes of sandwiches, fewer prep steps, waste is minimal, higher mark-up, quality control is easy, portion control is easy, minimal retooling, minimal training, operationally very smooth, plus the likely hood is it is a new customer base rather than exhibiting the potential for cannibalizing existing sales. Regards, FuwaFuwaUsagi

Odus
Odus

This is a natural extension and long overdue. Subs are simple to make, can use the same ovens, uses many of the same ingredients as pizza, and compliment the pizza brand. Most of the sub brands I can think of even have pizza subs.