ANN ARBOR Mich. When Domino's Pizza started delivering Oven Baked Subs from most of its 5,000-plus domestic stores in August, the pizza delivery giant instantly became a sandwich delivery behemoth. The move could bite into the bottom lines of quick-service and fast-casual sandwich specialists, and that pleases Domino's franchisee Dave Melton immensely. In a quick-service market where Subway now sells pizza, it's time to turn the tables, he said.
"Everybody and their brothers have been selling pizzas lately, so if they're going to get in our yard, we'll get in theirs," said Melton, a four-unit operator in Manhattan. "Selling sandwiches opens up a lot more dayparts for us, and already we're seeing a serious impact on our lunch business."
That potential shot in the arm is sorely needed for Domino's, whose U.S. same-store sales slipped 5.2 percent in this year's first quarter and 5.4 percent in the second. The resuming school year and the return of football season typically spur pizza sales to consumers' homes, but Domino's is optimistic its four new $4.99 sandwiches—Philly cheese steak, chicken bacon ranch, chicken Parm, and Italian—will sell well to workers seeking hot, affordable meals delivered to offices.
Tim McIntyre, Domino's vice president of corporate communications said the new sandwiches are positioned to meet changes in ever-dynamic consumer consumption patterns.
"We're seeing a lot of people eating a lunchtime meal at 11 a.m. and 4 p.m., not just noon to 1 anymore," McIntyre said. "Consequently, people who are doing late lunches are also doing later-evening meals. What we needed was an opportunity to attract that audience … with a different product that would appeal to them."
Partly for that reason, a number of Subway stores have started opening for breakfast. In addition to selling a new menu of items intended for morning consumption, the units also offer the chain’s signature hero sandwiches, since many customers want to grab lunch along with their breakfast.
Subway is experimenting with delivery in some of its urban markets, and toasted-sandwich specialist Quiznos offers delivery through about half of its 5,000-store, virtually all franchised system. Delivery has long been a signature of the 700-store Jimmy John’s sandwich chain.
ADomino's veteran, McIntyre said he couldn’t recall a faster product launch than the development and rollout of Oven Baked Subs.
"These things went from concept to creation to in-market test to launch in about four or five months, which is incredible," said McIntyre. In the recent past, he added, many Domino's menu additions suffered from over-analysis and lengthy launches. "Compare this launch to the Oreo dessert pizza, which was in development and test for a year as [a limited-time offer]."
McIntyre said sandwich sales are moving smoothly after operators overcame "normal training complications" connected to mastering new skills. Schooled in stretching dough, spoodling sauce and spreading cheese, team members soon mastered new moves required for sandwiches, which slashed production times.
"A franchisee I talked to said the first day he and his team were being trained, it took almost 8 minutes to make a sandwich before they put it in the oven," he said. Just like with most new pizzas, he added, "They were constantly looking up [at assembly instructions] to see what goes on the bread first, what's next and how much. But by the end of two or three days, they had it down to a minute-and-a-half."
Concerns that new ingredients would consume too much real estate on the already-tight "makeline" disappeared quickly, Melton said, since many sandwich ingredients are those used for pizza toppings. He said other franchisees have told him the overall integration has been simple.
"Operationally, it gets a green light from us because it goes right down the makeline as if you were making a pizza," said Melton, adding that franchisees were accepting of the minor investment required to add the items. "It's just like everything else you learn here: After you've made a thousand of them, it's as easy as sleeping."
Domino's isn't the first pizza operation to serve toasted subs, though not all have mastered the method for producing them in conveyor ovens. To avoid burning fully baked sandwich bread, some operators do "half passes" by inserting the sandwich through the observation window at the middle of the oven. Domino's sandwiches, however, are engineered for a single end-to-end pass through the oven, just like its pizzas and wings. Melton credited that simplicity to a carefully crafted and par-baked bread.
"The sandwich is placed on a little silicon insert, onto a screen and into the oven. That's it," he said. "When it's baked, the bread is just great, not hard on the outside, fluffy on the inside. To me, it's the best part of the product."
Domino’s is charging a delivery fee of $1 or $2 for sandwich orders, and requires a minimum order of $8 to $10, the company said in announcing the program in mid-August.
