Will Domino’s Roll Back Its Price Increases?

Domino’s released its half yearly financials yesterday and oh boy did that end badly.

The share price finished down 24% on the day, at $54.37.

The cause? Lower than anticipated sales. Same store sales were down 0.6% and total sales were down 4.0%. That has an exponential effect on profits: EBIT was down 21% to $114m, and underlying NPAT was down 22% to $72m

And the sales drop continues. “Sales growth in the second half has been less than anticipated”, they say.

“Domino’s anticipates Same Store Sales growth will be below the medium term outlook of +3-6% growth, as a result of most-recent tumultuous trading conditions.”

They are blaming their decision to lift prices, such as by applying surcharges. This negatively impacted customer repurchasing rates, especially in the markets of Japan / Germany where customers order less frequently.

The reduction in ordering frequency resulted in December trading being “significantly below our expectations”

“The effect of higher prices, reducing customer repurchasing, continued into January”

Now, companies don’t like their share prices going down. They aim for the opposite. Given how badly DMP was pummelled as a result of these figures, maybe they’ll roll back their increases, and our cheap pizzas will return.

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Comments

  • +12

    Used to get Domino’s once every few months but stopped a few years ago.
    Decided to get it last month and noticed their pizzas are so small now. With the double whammy of prices going up and size shrinking I’d rather go to my local pizza store where they at least still make large sizes and jam on the toppings.

    • +3

      I can't believe how small Domino's are now! An absolute joke. I haven't ordered from them in over 6 years easily.

      My local pizza shop load the toppings on and I actually get a Large size pizza.

    • whats the jam taste like?

    • +1

      I can get pizza from my local which is waaayyy better for a few bucks more. Last time I got two large pizzas (bigger than dominos), garlic bread and chips for $30. Lasted me for 4 days.

  • +11

    I'd rather spend triple and enjoy my pizza while supporting a mum/dad pizza joint.

    Domino's pizzas are junk - that's why their stock is plummeting.

    • Domino's pizzas are junk - that's why their stock is plummeting.

      Though, they've always been junk and yet their share price rose nicely…

      • +3

        Novelty factor of cheap pizzas in combination with broke uni students.

        • Plus no more lockdowns so people are going out and no one goes out for Dominos.

        • A bit like the ol' "Australia's Pizza House" super cheap pizza phase….

          …. yep it's cheap ….

          (my parents taught me, "if you don't have anything nice to say then don't say anything")

    • +6

      Domino's pizzas are junk - that's why their stock is plummeting.

      Do we need to be so dramatic? I am an absolute pizza snob but I still can make time for a Dominos Pizza. The pricing is absolutely outrageous these days, I can agree with you there.

      But if you find a good Dominos franchise, the pizzas can be really good. Woolloongabba Dominos was really good when I lived 'round that area, and i never had to wait longer than 5/10 mins for it to be ready

    • I think that's the fairly obvious reason! Its easy for execs to miss the obvious and talk about numbers and all sorts of fluff. But when it comes down to it - dominoes is trash. Thats why they aren't performing.

  • The only good thing about dominos these days is the thick shakes - far out they are decadent.

  • +3

    The size of the large pizzas makes you feel like you have been robbed. It has gone downhill for a while now.

  • -4

    and our cheap pizzas will return.

    Why do you want cheap pizzas? What's this obsession with focusing on purely price for every decision, is it a recession thing?

    Cheap means a sacrifice in quality and quantity. So sure, enjoy your $5 pizza which has the same amount of ingredients as a single slice of $20 pizza with the blandest flavours to boot.

    • +3

      It is really up to the consumer and what they see as value - I would say the $20 pizza is not 4x as good as a Domino's pizza, but obviously people's opinions differ.

      Also this is OzBargain so it shouldn't be a huge surprise that people are looking at the cheapest option right?

      • +1

        True, I've seen people bend over backwards to save $5 on this forum.

        • $5? I've seen them do more to save 3% on something!

    • Sometimes I want quality, sometimes I want volume.

      • -1

        Then a $5 frozen pizza is more volume than a dominos one and much better anyway IMO.

        • +3

          No it's not and I spent the majority of my twenties blazed so I'm kind of an authority on the subject. For most of the '10s Dominos was the best bang for buck delivered munchies food.

      • -1

        3 dominoes pizzas cost more than 1 decent pizza from a pizza shop and have the same volume if you exclude the doe. Dominoes pizzas just flies out your ass the next day too, its bloody slop, my dog doesn't even eat it

        • +1

          Dough*

          Also it really depends on your store. None are amazing but there are definitely better and worse stores.

          • -1

            @Cheaplikethebird: your just paying for a tonne of dough and minimal toppings, it really is disgusting, shout yourself a decent pizza.

            1 decent pizza > 3 dominoes ones. your just fooling yourself basing it on $ and quantity

            hold a dominoes pizza vertical and see all the sh*t slide off

            here is another analogy.

            3 pairs of kmart thongs ($5) vs 1 pair of decent thongs ($25). kmart thongs break after 3 months, good thongs last 2 years.

            • +2

              @Donaldhump: I've organised food for plenty a stoner gathering thanks to my OzBargain powers. 1 decent pizza does not equal 3 dominos pizzas but they did cost the same.

              • -1

                @Cheaplikethebird: why not just buy 8 loafs of bread

                • +1

                  @Donaldhump: Coles is shut at 9pm in Brisbane

                  • -1

                    @Cheaplikethebird: so go at 8:30pm? pointless argument. If you have a raging prong for Dominoes and think its a bargain go for it.

                    The discussion is why is Dominoes getting worse, and clearly the market thinks it is

                    • @Donaldhump: Lol you're the one with such a raging hard on for yuppie pizza.

                      BTW I've maybe eaten dominos a handful of times in the last 5 years. Now it's usually something woodfired or I'm making cast iron deep dish pizza at home but my point that dominoes, at a point in time, were the best value munchies food you could get delivered holds true.

        • +1

          doe

          Oh deer dear

    • I disagree. Cheap doesn't always mean lesser quality. But dominos is just crappy quality, whether it's $5 or $20.

    • I agree with this

  • +1

    The share price finished down 24% on the day, at $54.37.
    Shrinkflation so bad its affects the stock price too.

    uninstalled the app

  • Been on keto (more like low carb) lately. Already saving so much money, and time spending on eating, gaining weight.

    Cannot be better IMO. Just trying best to resist all tasty carbs

    • Keto is good but you will lose the will to live eventually, after 6 months I gave in.

      • Yup I also am doing it like 3rd time (left like 2 times for about a year or so).

        But I just cannot stop eating and gaining weight without keto (because of sedentary lifestyle)

        • same, life sucks. Nothing worse than having to wear a belt to work and by Friday lunch the thing wants to explode.

        • Maybe you should try intermittent fasting if you haven’t yet.

          • @Ghost47: doesn't work. I would eat too much in the 8hr window. Fats do keep me filled up longer

            • @USER DC: Same.

              I've tried many diets over the years, but found Keto to be the most effective for me.

              Much like Donaldhump, I get sick of it after 6ish months and go back to a regular eating for a while.
              Lost 30kg doing this previously.

  • +3

    They are blaming their decision to lift prices, such as by applying surcharges. This negatively impacted customer repurchasing rates,

    WOW Who would have thought that increasing prices, reducing sizes while adding these bullshit 'american' surcharges would drive customers away!?

  • +2

    Dominoes is slop but the price was appropriate for the slop. Now the price is too much, and pizzas have shrunk, I go to a local shop and pay $30 for one actual decent pizza

    Dominoes is going backwards.

    • +1

      $30 per pizza, geez. How I'm going to buy a Beamer, if I spending that much on a pizza?

    • $30 for one pizza?!

      • https://threekingspizzapw.yqme.com.au/Menu/PizzaSeafoodLover…

        yep, 13 inch seafood pizza $29 (132 inches squared) or 3 x 10 inch from dominoes (~240 inches squared total).

        less volume, but better taste, actually has toppings all over instead of sauce, dominoes is awful it's just dough loaded with sauce and sparse toppings, that's the key i'd rather pay more and eat decent food than dominoes barely tastes nice at all

        I can blaze through two dominoes pizzas, can only eat half of that three kings

        • Damn, no Beamer for you. I'm done with one domino pizza, a quality limits me from eating more, good for my health and wallet.
          I can't see my self spending $30 once in a while junk food, perhaps for special occasion, but I aren't gonna eat pizza for special occasion.

          Domino premium range on special $10, can't go wrong with that. Or $15 delivered during the lock down.

          • +1

            @boomramada: all depends on your finances.

            i drive a mazda2, i don't need or intend to own a beamer, but pay no interest on my mortgage so i don't think $30 will kill me, when it last 2 dinners

            • +2

              @Donaldhump: That's true, I'm happy with the dominos. Not everyone having the same pleasure sensors, mine isn't 30$ pizza. I guess.

        • Do they make their own dough? So many of these smaller places seem to just order in frozen bases and put their own toppings on.

  • +2

    It saddens me Domino’s (which objectively sucks) gets so much more attention yet Pizza Hut (which is objectively way better both in size of pizzas and overall value) is thought to be worse.

  • The simple explanation is sales after the pandemic boom aren't great . Surely expected .
    Its time to buy the share in gloom and doom :)

  • +2

    Lol when a budget, trash-tier, pizza chain is struggling during an economic down turn that sure says something about their product! With people tightening their belts it would make sense for domino's sales to increase not decrease. They are doing something very very very wrong.

  • DMP down 24% yesterday, but still above 52 week low. Up 2% today. Unsure re DMP’s future (and pizza prices), my impression is that they’ll screw over franchisees to protect executive interests and shareholders.

    Do you have any exposure to DMP?

  • People went out and bought ooni, gozney, roccbox, other knock off pizza ovens and can never go back to dominos

  • Domino's is good if you can get a pizza for < $5. But they charge like $15 now which is just stupid, you'd get so much better value at a smaller pizza shop.

  • With the 40% off (the only way to buy domino's), you can get a really decent sized XL premium pizza for about $14, I think that's well worth the money compared to any other offering.

  • Merged from Domino's CEO Regrets Speed of Price Hikes and Surcharges

    https://www.google.com/amp/s/www.news.com.au/finance/busines…

    I noticed a few News articles in the last week about Dominos. They recently posted results, and they have had share price smashed.

    I haven't ordered dominos for a while now.

    • they have had share price smashed.

      *

      I haven't ordered dominos for a while

      Uhuh..makes sense..

    • +5

      because dominos wasn't only increasing the prices, but decreasing food quality too (like shrinking the pizza size/crust (cardboard thin) + being SUPER DUPER STINGY on toppings, even when someone literally pays for triple the topping (maximum allowed online)).

      • Factor in the price increase with all this. then shouldn't be hard to figure out LoL.

      IMO they should have only done 1 (like only price increase, not shrunk pizza, and made quality $h!t @ the same time or vice versa).

      • What is the thickness of cardboard? It's quite a versatile product available in many sizes.

        • +1

          Well, put it this way, they started measuring their pizza bases in “gsm”…

      • SUPER DUPER STINGY on toppings

        have you tried a different store ?

        • Some stores are good but most are like that

      • +2

        You're right. I think they got wayyyy too cocky and forgot the concept of Just Noticeable Difference.

    • +1

      "Domino's CEO Regrets Speed of Price Hikes and Surcharges"
      So the pricing is what they need and they should have started raising it earlier by less each time
      .

    • +2

      I find domino's has pretty good quality toppings however I don't go there anymore as they undercook their pizzas and changed their thin base at some point to a weird cracker type base.

      I used to see advertisements on their website boasting how fast they cook their pizzas as though it was a good thing. It blows my mind they don't realise their pizzas are undercooked. Now I'll pay $22 at a local store if I feel like pizza as it won't leave me disappointed.

      Don if you are reading this please change the thin base recipe back and have an option to cook pizza for longer.

      • +2

        I prefer the new thin base over the old one, never had an under cooked pizza from them. Maybe your local store is the problem.

      • The deck ovens that local places tend to use for pizzas will cook a pizza just as fast as the conveyer ovens Dominos use. Though workers obviously won't pull a pizza from a deck oven if it is undercooked, but if a conveyer oven is full you can't put a pizza back in it for another minute very easily.

      • That would require stores to go back to making thin bases themselves instead of importing from SE Asia.

        Thin bases took the most time/effort to make, aside from cheesy crust maybe but those have a surcharge, so I doubt they'll do so.

    • Too expensive now

    • +1

      19% of the worlds Domino's is in Australia…. my god….

      • +1

        Well that's a little shameful.

      • Nope, the 3,700 is only the amount that the ASX listed Domino's has around the world, not the US listed

        There's 18,000 got globally so about 4% here.

    • Buy one premium, get a traditional pizza free.

      Yeah nah.

    • +2

      KFC all the way.

      • @Jimothy Wongingtons agrees

      • felt like the four burger four chips for $20 on the weekend. I couldn't see it. I guess KFC no longer wants to 'take my money'
        .

    • I think it's more the Australia/NZ region CEO that's led the recent bad decisions, still has too much of that franchisee who pushes head office to pass every cost onto the customer attitude despite now moving to head office

      • The Don's been CEO since 2002 mate, you'd still be eating Pizza Hut if it weren't for him. Put some respect on his name.

        • +1

          Don is the global CEO of DPE, not Australia/NZ CEO anymore, keep up.

          I said AU/NZ if you read my comment.

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