Domino’s Pizza is losing customers due to recent price hikes

If you thought your last trip to Domino’s was abnormally expensive, you weren’t wrong. The world’s largest pizza chain has joined the trend of rising prices to combat high food and labor costs, and its customers are definitely taking notice.

Exactly how much have Domino’s prices gone up? Chain executives predicted in October that prices would increase by around 7% in the last quarter of 2022. Domino’s was contacted to confirm whether the price increases in the fourth quarter matched this forecast.

During 2022, Domino’s also targeted some of its most popular offerings with price hikes and changes that left customers unsatisfied. The chain increased the price of its Mix and Match deal from $5.99 to $6.99 for delivery customers in March 2022. In October, it also applied the same price increase on the Mix and Match deal for takeout orders.

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Domino’s has also made key changes to its popular transport offering, which currently offers customers a pizza, dip and bread combo, or wings for $7.99.

Although Domino’s didn’t increase the price of the deal, it did reduce the number of wings it contains from 10 to eight. Additionally, it now only allows customers to order one topping on a pizza as part of the delivery deal when it previously allowed them to choose three toppings. The chain has further limited this deal by turning it into a digital-only offer, excluding those who order in person or over the phone.

Customers, predictably, did not appreciate these changes. “Unfortunately it’s now cheaper for me to buy my favorite frozen pizza than a Domino’s pan pizza so that’s what I’m doing in the future,” one user wrote in a Reddit thread discussing the uptick. prices of the Mix and Match agreement.

“I used to only get food there occasionally because of deals like this,” another Reddit user wrote in a separate thread about the changes to 7’s deal. $.99 to go. “No one will pay the normal price for a pizza for Domino’s.”

Domino’s fourth-quarter results, released Feb. 23, appear to further demonstrate that customers may be put off by the chain’s pricing. The company missed expectations for same-store sales growth and its shares fell more than 11%.

At Domino’s, U.S. same-store sales rose 0.9% in the quarter, but that still fell short of expectations that the chain would see a 3.4% increase. In other words, established Domino’s stores did not generate as much revenue as expected during the quarter, indicating that customers are not enough like willing to pay more for Domino’s.

The number of orders with delivery also fell in the fourth quarter, as same-store sales with delivery fell 6.6%.

In addition to the loss of customers, the shortage of delivery drivers created additional difficulties for Domino’s, which negatively impacted sales and delivery times. Although staffing levels are now on the rise, Domino’s acknowledged ongoing challenges on the delivery side during the latest earnings call.

“We expect the economy to be a headwind for our delivery business in 2023…Every day, delivery customers will decide where to spend their hard-earned money,” CEO Russell Weiner said.

Zoe Strozewski