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Domino’s Wants You To Get Your Pizza (And Pay More For It)

Domino’s Wants You To Get Your Pizza (And Pay More For It)

Domino’s Pizza (DPZ) He made his mark by offering fast food type of pizza service options. Domino’s 30 Minute Pizza Promotion has really helped the company grow.

The company expanded by appealing to customers’ desire to sit on their sofa and wait for food to be delivered. Just-in-time delivery was one of the key ingredients to its success.

Another key component of Domino’s success has been its approach as a low-priced pizza option. Fast delivery and lower-priced pizza than its competitors proved to be a winning strategy for the Michigan-based company. The pizza company started in 1960 and has primarily grown through franchisees to 85 different countries. Since the company is mostly independent franchisees, owners can decide if their stores will charge a delivery fee and at what ticket price for free delivery.

Pizza companies are very competitive, and during the pandemic, the industry has been primed for the type of business in need, which is home delivery. Almost all other industries have had to focus on business models, but pizza delivery hasn’t. More people are ordering pizza during the pandemic more routinely than ever before. Dominos reported significant increases in sales during stay-at-home orders.

Dominoes were unable to avoid epidemic economic problems and inflation

The pandemic is likely the root cause of inflation worldwide and no industry is immune to its effects. Global inflation is causing prices to rise at every turn. Domino CEO Russell Weiner stated during the third-quarter earnings call, “Given the continued inflation we’ve seen, our analyzes now indicate that we should take prices [up] On our local deal as well. We will continue to balance customer value with franchisor profitability by taking the migration mix and matching deal from $5.99 to $6.99 starting October 17. region.”

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Raising prices at a company that built its business on low-priced pizza and just-in-time delivery is a huge blow to loyal customers. Customers are already feeling the price hike, and the low-priced dinner option has been a saving grace, as its deal is still much cheaper than going to other fast food restaurants like McDonald’s (MCD) . Prices were a more gradual increase, but the shock attached to McDonald’s still occurred. McDonald’s is said to have been increasing prices by 6% this year, and the $1 price increase by Domino’s reflects a 15% increase.

Since franchisees can decide whether or not to charge for delivery, this really is an understatement of the amount of savings between fulfillment and delivery. All things considered paying an extra $1 per item in a mix-and-match deal might sound like baby potatoes, but getting $1 is everywhere consumers start shopping.

Pizza is still a great dinner option, overall

It has become difficult to put dinner on the table for many families, especially those who live from paycheck to paycheck. All those families who were able to afford to go out to dinner once a week or once in a while, are now finding the most affordable options for treating their family.

Pizza pick-up or takeaway options are still popular and affordable. Since the pandemic, many restaurants have increased fulfillment capabilities and started delivery options to reach customers. While convenient, the majority of restaurant chains and small business restaurants have had to increase their prices to deal with inflation as well. Considering how a family can eat pizza for a meal and only pay $1 to $2 more for the same meal compared to the delivery fee, costs over many food items, and pizza is still a formidable dining contender.

Pizzerias are also suffering from the pain of understaffing and any other industry. It has reached the point where some pizza delivery will be outsourced through other delivery companies that have employees to be able to have dinner on the table on time.

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Companies innovate in how to attract customers. Domino’s Pizza recently made a marketing appeal to customers to save 20% for its “inflation relief deal.” The deal is available when customers place their orders online through the Domino app, online, over the phone, or in person. The special promotion is for a limited time, until October 16th and applies to both fulfillment and delivery orders.

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