Domino’s is one of the top pizza restaurant chains in the world, with a total of over 19,000 store locations. The company is known for its extensive pizza menu and fast delivery.
However, customers have observed an increase in menu prices at Domino’s over recent years. What is the reason for these high prices? I’ve done the research, so here are ten reasons why!
Why is Domino’s So Expensive?
Many factors contribute to Domino’s high menu prices such as higher employee hourly pay, increased delivery costs, and higher gas prices have affected the company financially. In addition, food prices overall continue to increase. Ingredients that have become especially costly include meat and cheese, both of which are crucial to the success of Domino’s company.
Keep reading for ten reasons behind Domino’s increased menu prices!
1. Higher Labor Costs
According to the National Restaurant Association, hourly employee wages rose by 12.1% from 2021.
Therefore, increased pay for restaurant workers often results in higher menu prices when combined with several other factors.
2. Increased Shipping Costs
The global economy largely relies on cargo shipments from around the world.
Further, rising shipping costs have contributed to the increase in inflation and the raised prices you find at restaurants like Domino’s.
Also, when supplies are more expensive to transport across the globe, those expenses slowly make their way into the prices of simple items like food and basic restaurant supplies.
3. Much Higher Gas Prices
Gas prices are one of the biggest reasons for the general increase in prices on almost everything you can buy at a store or restaurant.
Not only does the drastic increase in the price of fuel affect the cost of food and supplies, but it also makes it more expensive for Domino’s delivery employees to get a pizza to your door.
For these reasons, the 48.0% surge in gas prices is a significant reason why restaurants like Domino’s have had such high menu prices lately.
4. Increased Cost of Ingredients
Another reason why Domino’s has increased its prices is the overall increase in the price of food ingredients.
That said, the rising costs are not expected to slow anytime soon, as the USDA expects food price increases this year to be above the increases observed in 2020 and 2021.
Naturally, when food is more expensive for a restaurant to buy, the price of the final menu item that uses these food ingredients must account for the increase in cost.
5. Increased Employee Bonuses
Domino’s invested over $9.6 million in 2020 to provide special bonuses to over 11,500 team members and drivers. Also, the company expanded sick leave benefits for employees.
Further, these efforts reflect the company’s recent focus on expanding its workforce and offering benefits.
Of course, all of the money poured into keeping Domino’s workforce happy has undoubtedly affected the company’s overall financials.
6. Price Of Meats Has Increased
The biggest increase in food prices has been observed in the meat industry, with pork and beef up 14% to 20% compared to the prices in 2021.
Of course, Domino’s relies heavily on meat for pizza toppings, and the main ingredient in the iconic Domino’s pepperoni is pork and beef.
These increased prices affect the menu prices you see when visiting Domino’s to order your favorite pizza.
7. Price Of Cheese Has Increased
With a projected lower milk production this year, even lower than decreased production in 2021, the USDA predicts additional increases in prices for cheese and whey.
So, since cheese is a major ingredient in nearly all of Domino’s menu items, these increased prices have affected the company’s financial status.
8. Price of Certain Grains Has Increased
Strong demand for grains and higher global commodity market prices have caused an increase in the price of wheat and other grains.
That said, this pressure on wheat exports has not been helped by the conflict between Russia and Ukraine since Russia is the top exporter of wheat and Ukraine is in the top five.
Domino’s uses a lot of wheat to make its pizza dough. Therefore, the restaurant cannot operate without pizza dough, so raised menu prices attempt to balance these increased costs.
9. Fewer Staff Members Available
The national staffing shortage affected Domino’s overall sales revenue in the first quarter of 2022, and executives warn that these challenges could persist in the future.
So, when a restaurant location is low on staff, this often affects the operating hours, which means the store will have less time to sell food and make money.
Therefore, the decrease in profits affects inflation in menu prices.
10. Innovations In Technology
Over the years, Domino’s has invested significant resources into technological innovations and improvements that benefit the company’s efficiency and customer experience.
For example, these innovations include the Online Ordering, Domino’s Tracker and Pizza Builder, Domino’s DXP (Delivery Expert) Car, and Domino’s Heatwave Hot Bags.
All these inventions and aspects of the company require money to maintain, produce, and adjust, which is another contributing factor to Domino’s menu prices.
Domino’s increasing menu prices can be attributed to many factors.
Global inflation has affected nearly every aspect of the economy, especially high gas prices, which is a big reason why Domino’s has hiked its prices.
Additionally, increased prices for essential ingredients like meat, cheese, and wheat and higher shipping costs contribute to Domino’s expensive menu.