Domino's is the world's largest pizza business, but it's battling to keep consumers.
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.
After supply chain concerns and inflation raised food, labor, and other costs, several big restaurants and fast-food companies upped their pricing.
Market Watch reported in October 2022 that company officials projected a 7% pricing increase in the fourth quarter. Price hikes persisted till 2023.
Domino's CFO Sandeep Reddy said in an earnings call this morning that US prices rose 3.9% during the quarter.
Reddy said the business anticipates third-quarter pricing to be comparable before decreasing to 2% in the fourth quarter of 2023.
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. In the second quarter of 2023, same-store sales rose 0.1% due to increasing prices, according to Reddy.
Domino's delivery company is also to blame. Last quarter, same-store delivery revenue fell 3.5%.
Domino's officials blame delivery driver shortages and budget-conscious customers who want to avoid delivery fees and tips.