Pizza giant Domino’s has ruled out hiking up prices between now and June 30, 2024, despite a 74 per cent fall in profits.
In a statement, Domino’s group CEO and managing director Don Meji said: “I want to be clear to our customers facing cost of living pressures, we do not expect to pass on pricing increases this year.”
The move is a win for everyday Aussies struggling with the rising cost of living due to inflation.
And if pizza isn’t your cup of tea, there are signs that some fresh food prices are also starting to stabilise, if not fall.
“Fresh produce is now in deflation, driven by vegetables, and red meat is now also in deflation – that’s driven by beef and lamb,” new Coles CEO Leah Weckert said this week, when announcing its full year results.
Mr Meji acknowledged that the introduction of a delivery service fee in July 2022, which it scrapped this June, had cost the company customers.
The seven per cent fee added an extra $1.80 to an average $30 pizza delivery purchase and created outrage.
“Because of the speed at which we needed to respond to inflation we didn’t always get the ‘value equation’ right. For example, some of the changes we made including the delivery service fee did not resonate with some customers and over time they ordered less frequently,” Mr Meji said.
However, the increases the company pushed through on its value range last August, which saw the price of many of its $5 pizza options rise to $8, will stay.
Mr Meji said that decision had been “accepted by customers” and that the value range was “still providing amazing value”.
At the time of the increases, Domino’s blamed them on the “rising cost of fuel, food and utilities, and (to) ensure we can continue to train and retain our team members”.
Domino’s lacklustre financial result, released yesterday, was due to cost pressures and soaring inflation.
Unlike many big corporates who are passing inflation level price increases directly onto customers while posting record profits, Dominos has taken some of the financial hit.
Mr Meji said the business would get back on track by “launching inspired products and services and delivering everyday value” but it will also cut 20 per cent of its workforce globally, equating to about 200 people.
The job losses are expected to affect back-office staff.
In June Domino’s revealed it would also be closing all its stores in Denmark, while news broke this week that all 142 of its stores in Russia will close after its Russian master franchisor was forced into bankruptcy.