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Domino's (DPZ) Partners Nuro for Autonomous Pizza Delivery

Zacks Equity Research

Domino's Pizza, Inc. DPZ announced that it is starting driverless pizza delivery services in Houston, TX. To this end, the company has partnered with Nuro — a robotic company for the delivery services.

The driverless pizza delivery services can be only be availed by select residents of Texas. It has been underway in the Houston metro area since March 2019 and will further expand Nuro's autonomous delivery operations.

After placing the order, customers can track the vehicle via the Domino's app. Kevin Vasconi, Domino's executive vice president and chief information officer, said that “Nuro's vehicles are specially designed to optimize the food delivery experience, which makes them a valuable partner in our autonomous vehicle journey. The opportunity to bring our customers the choice of an unmanned delivery experience, and our operators an additional delivery solution during a busy store rush, is an important part of our autonomous vehicle testing.”

Moreover, in 2017, Domino's in conjunction with Ford Motor Co., initiated a research on consumers’ responses to Pizza delivery using self-driving vehicles. Notably, digital leadership is helping the company expand its brand in the domestic market as well as overseas.

In a bid to boost sales, Domino’s is investing heavily in technology-driven initiatives like digital ordering. In 2017, the company’s AnyWare suite of ordering platforms, which allow customers to order from various ordering apps and platforms such as Google Home, Facebook Messenger, Apple Watch, Amazon Echo, Twitter and via a Pizza emoji on text, grew significantly. Meanwhile, its digital loyalty program — Piece of the Pie Rewards — continues to contribute significantly toward traffic growth.

In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 13.4% compared with the industry’s 10.3% growth.



Bottom Line

With Internet, digitalization and electronics influencing every facet of our day-to-day lives, it is obvious that the restaurant industry has embraced this trend. Per The NPD Group, foodservice delivery services have contributed significantly to restaurant sales over the past few years. Over the last four years, digital orders increased by 23%.  As a result, digital sales are no longer a luxurious feature but the dire need of the hour.

Key Picks

Better-ranked stocks worth considering in the same space include Denny's Corp. DENN, Noodles & Company NDLS and Yum China Holdings, Inc. YUMC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Denny's have gained 16.1% in the past three months.

The long-term earnings growth rate for Noodles & Company and Yum China is 8.8% and 9.4%, respectively.

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