When you can't fill your open roles, consider paying your customers instead.
That's the strategy Domino's is using to compensate for both labor shortages and a decline in sales. The Ann Arbor, Michigan-headquartered pizza chain announced this week that it will offer customers a $3 "tip" to apply to their next order (placed within a week) if they pick up their online orders themselves. The promotion is expected to run through late May.
In October, Domino's reported its first decline in same-stores sales in more than 10 years, MarketWatch reported. It attributed this decline to a "challenging staffing environment" that caused a combination of reduced store hours and customer service challenges, like long delivery wait times and the inability to fulfill orders. Unlike competitors like Papa John's and Pizza Hut, Domino's uses its own delivery drivers and is not available on third-party delivery platforms like Seamless and DoorDash.
Time will tell if a $3 limited-time credit is enough to compensate customers for the added work of completing a pick-up themselves. As the New York Times recently reported, fast-food customers appear willing to pay for increased delivery costs in exchange for convenience, data from Chipotle shows.
But as hiring struggles have continued into 2022 -- especially for hourly roles -- customer incentives may help businesses make up for staffing setbacks. In the long run, businesses still have to attract and retain talent, which likely means increasing compensation and improving benefits in an increasingly competitive job market.