Domino’s CEO warns driver shortage is squeezing margins

On Domino's most recent earnings call, CEO Russell Weiner warned the chain is having growing trouble staffing delivery drivers, pushing up labor costs and making it harder for stores to meet delivery demand.

The company reports shortages have forced some stores to limit delivery hours, increase carryout orders and change schedules to stretch available staff. Higher wage levels and fuel costs have raised labor expense per store.

Executives outlined measures to address the shortfall: higher pay, more flexible schedules, expanded recruitment and new incentive programs. Stores are testing tighter delivery windows and shifting some peak-period business to carryout. Domino's is also investing in digital tools to speed order processing and improve routing for drivers.

Weiner pointed to third-party delivery services and tight local labor markets as factors that intensify the issue. He noted third-party apps increase customer access but add fees and coordination costs that can erode restaurant profitability. The company plans to balance third-party delivery with its own fleet and carryout options to limit costs and maintain service standards.

Domino's is tracking driver availability and delivery times more closely. In densely populated and high-cost areas, shortages have led to longer wait times and occasional delays. The chain is piloting changes in those markets and will expand successful tactics to other regions, with management expecting fluctuations while tests continue.

Weiner described driver recruitment and retention as a “front-line” issue that affects customer experience and same-store sales. Analysts asked about long-term margin pressure and whether automation such as delivery robots could play a larger role. Management responded that technology, including route-optimization software and driver-app improvements, will be used alongside staffing and compensation adjustments.

Domino's operates more than 18,000 stores globally and depends heavily on delivery revenue. The company has faced food-cost inflation, wage pressure and competition from third-party platforms in recent years. Management plans to provide updates in upcoming quarterly reports on the impact of recruitment incentives and operational changes.