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Domino's is the world's largest pizza business, but it's battling to keep consumers.
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Today's Q2 reports showed decreased order volumes and a $40.6 million, or 3.8%, revenue drop. Domino's lost customers due to price adjustments.
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After supply chain concerns and inflation raised food, labor, and other costs, several big restaurants and fast-food companies upped their pricing.
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Domino's follows suit. In October 2022, executives expected a 7% price increase in the fourth quarter. Price hikes persisted till 2023.
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Domino's CFO revealed in an earnings call this morning that US prices rose 3.9% during the quarter. Pricing should remain stable in the third quarter before moderating to 2% in the fourth quarter of 2023.
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These pricing hikes have hurt Domino's sales. After raising the price of its popular Mix and Match package in 2022, some consumers indicated they were done with the chain.
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Domino's delivery company is also to blame. In the most recent quarter, same-store delivery sales fell 3.5%.
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Domino's officials blame delivery driver shortages and budget-conscious customers who want to avoid delivery fees and tips.
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The company expects "challenged" third-quarter same-store delivery sales. They expect a September loyalty program overhaul to address such concerns in the fourth quarter.
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They foresee a "considerable improvement" in 2024 from a new Uber Eats and Postmates agreement.
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For the first time, Uber Eats and Postmates will deliver Domino's orders. Domino's drivers will deliver all orders in four test markets this fall and nationwide by year's end.
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