[bduerst]

Is it though?

Most pizza delivery is an ancillary service to the restaurant itself. Are there very many profitable pizza-delivery only businesses?

Also you could argue that for the genre of restaurants where delivery is profitable as an ancillary service (pizza, chinese, etc.), they already offer delivery and there isn't any profitable market for the restaurants where they didn't have it before.

[paulcole]

> Most pizza delivery is an ancillary service to the restaurant itself.

Are you sure? Seems like the restaurant mostly exists for marketing, awareness, and as a place for people to not come in and eat.

90% of Pizza Hut’s orders are deliveries. 65% of Domino’s are deliveries. Over the entire industry, carry-out and delivery account for over 75% of revenue (delivery alone is 30% or so).

• https://www.cnbc.com/2018/12/05/pizza-hut-execs-dissatisfied...

• https://www.reuters.com/article/us-dominos-pizza-delivery/do...

• https://www.statista.com/topics/1610/pizza-delivery-market/

[bduerst]

Is that really profitable though? Your article talks about how Pizza Hut is struggling as it switched to digital delivery.

Also according your statista link, delivery only accounts for 30% of revenue in the pizza industry.

[paulcole]

Your intuition is probably spot on. Dominos stock has been doing terribly and pizza delivery will likely cease to exist because it is a constant money loser.

[askafriend]

This is...not correct at all. Dominoes stock has been on an absolute tear the past decade. I don't know what charts you're looking at...

[bduerst]

They've plateaued this past year with negative growth. Is what dominoes was doing a decade ago really relevant?

[mruts]

They have an excess return compared to the S&P 500 of 200% in the last five years. That’s hardly ten years ago, and the story for Domino’s is still very strong. There’s tons of market share left to eat up and many international opportunities.

Pizza Hut has already moved into EM markets (like Africa) and is gradually expanding. Domino’s could do the same thing, and probably better with their superior tech stack.

[paulcole]

I was making fun of the guy claiming pizza delivery wasn’t profitable.

[mruts]

Dominos has out performed the S&P 500 by like 200% in 5 years. In the last year it returned -2%, so that’s not good, but still a positive story overall.

[wp381640]

Lookup the stock of Domino's[0] - they've been on a years long tear by scaling delivery and adopting tech

In theory this could work better for some food delivery companies as they charge the restaurant rather than produce themselves and run the overhead of stores, etc.

[0] http://www.google.com/finance?q=NYSE:DPZ

[williamDafoe]

I think it's pretty obvious that nobody buys a Domino's Pizza because it tastes good! They buy it because someone shows up at your door and gives you food!

[mruts]

I mean, they’re not terrible. I think I prefer them to other Pizza chains. And they have a dope app.

[tallanvor]

Domino's and Little Caesars are the second and third largest pizza chains in the US. Some of them may have space for a few people to eat there, but their entire business structure is based on delivering pizzas. Sure, they have pick-up options as well, but I wouldn't say that changes them from being developed around the idea of delivering the pizzas.

[cosmodisk]

It's not profitable because every single restaurant does it for itself only.A post office service would never make a dime if it was only covering a small town.Scale it up to the entire city and it becomes very interesting

[komali2]

Back in frontier west, outside US territory (and therefore not served by the Post Office Department or the Pony Express), people would set up highly profitable transportation companies. These companies would make deliveries for local shops but also carry mail, bringing stuff to somewhere served by the Post Office Department or the Pony Express or the Wells Fargo freight routes.

I read all this in a book ages ago but I was skimming through some wikipedia articles that mention some of what I'm talking about if you're interested:

https://en.wikipedia.org/wiki/American_frontier

https://en.wikipedia.org/wiki/Pony_Express#Stations

[sjg007]

I mean this was how Wells Fargo started.

[bduerst]

Yes, I understand economies of scale, but there is a point where the time and resources spent driving take-out around is not profitable. That's what I mean about certain restaurants and cafes not offering delivery, because even with a third party full time delivery service it's not profitable to deliver certain goods.