DOMINO’S IS BETTING THAT INFLATION WILL HURT DELIVERY SALES
The pizza chain is raising the price of its $5.99 carryout offer to $6.99 as those sales continue to perform well. It argues that inflation will be bad for the delivery business.
Domino’s Pizza is anticipating that inflation may lead some consumers to opt for cooking at home instead of ordering restaurant delivery due to the added expenses of fees and tips for delivery. The company’s CEO, Russell Weiner, stated that their research shows that a relatively higher delivery cost might cause some consumers to choose to prepare meals at home, especially if consumer spending becomes more constrained around the holiday season.
Domino’s Pizza has reported that its carryout same-store sales increased by almost 20% in the third quarter of 2021 compared to the same period the previous year. In contrast, delivery same-store sales declined by 7.5% in the same period. The company attributes the difference in performance to the added expenses of fees and tips for delivery, which may be causing some consumers to choose to prepare meals at home rather than order restaurant delivery. Domino’s has raised the price of its crucial carryout deal, which allows customers to select three or more medium pizzas, pasta, or sandwiches for $5.99 each, from $5.99 to $6.99. The company has also previously raised the price of its delivery offer and is facing increased labor costs and a 13.4% increase in food costs in the US in the quarter. Domino’s CEO, Russell Weiner, stated that the company would continue to balance customer value and franchisee profitability.
The original article is “DOMINO’S IS BETTING THAT INFLATION WILL HURT DELIVERY SALES.”