Domino's to add sub sandwiches to pizza delivery

By
Bruce Horovitz, USA TODAY
August 18, 2008, 11:54 PM ET
2 min read

— -- There soon may be pizza sauce dripping from your sub sandwich.

Domino's dpz, the pizza delivery giant, on Monday will announce plans to roll out a line of four, $4.99 oven-baked sub sandwiches, including Philly Cheese Steak and Chicken Bacon Ranch, that it will deliver with or without pizzas.

The rollout starts Aug. 25. When complete on Sept. 22, Domino's will become the largest sandwich delivery company in the nation, CEO Dave Brandon says. Non-burger sandwiches are a $21.2 billion market.

Domino's is not stopping at subs.

"We're looking at everything," he says. "We have more non-traditional products in various stages of R&D."

The move comes five months after Pizza Hut began delivering baked pasta dishes as well as pizzas. And it will be a wake-up call for sub shops Subway and Quiznos, which find themselves competing with pizza chains.

For the pizza giants, the message is clear: If pizza sales aren't growing in a sour economy, maybe something else will. Besides the hot subs and baked pasta, some pizza chains also deliver chicken wings.

"It's an attempt by the pizza players to try to get back into being a growth industry," says Ron Paul, president of Technomic, a restaurant research firm. "They've all lost their mojo."

They also are further conflating a fast-food world that's grown jumbled. McDonald's mcd, Burger King bkc and Wendy's wen sell salads and chicken. Subway and Dunkin' Donuts have tried pizza. Arby's, once roast-beef-only, now makes a killing on Market Fresh deli sandwiches and sells toasted subs.

Domino's U.S. same-store sales fell 5.4% in the second quarter after a 5.2% decline in the first quarter.

Brandon says the move should boost Domino's lunch business and expects lots of calls from groups of office workers. (The minimum delivery order is $8 to $10, depending on location, and delivery fees are $1 to $2.)

Rivals are unimpressed.

Pizza Hut delivers hot sandwiches regionally but is focused on growing its national pasta delivery sales, says Brian Niccol, marketing chief.

Tony Pace, marketing chief of the Subway Franchisee Advertising Fund Trust, says, "Domino's is watching our success and wondering how to get a piece of the action."

Half of Quiznos' locations deliver, and two-thirds will by year's end, says Rebecca Steinfort, senior vice president.