👉 Background: Domino’s Pizza Enterprises is the owner of the Domino’s pizza chain in Australia - with hundreds of franchisees of its brand. It’s also got franchised stores in Europe and Japan too.

👉 What happened: Over the last six months, Domino’s net profit fell 28.3 per cent to $63.9 million. The big reason? Domino’s has seen a number of its raw materials spike in price.

👉 What else: At first, Domino’s tried to absorb this cost… but that hurt its profit margin a little too much. Then Domino's raised its prices.. and that meant customers kept ordering.. BUT on fewer occasions.

What's the key learning?

💡 One of the trickiest balancing acts in the world of business is the art of raising prices without scaring off customers. It's all about finding the right balance.

💡As an example, many companies tend to increase their prices over time, rather than all at once. This gives customers the chance to adjust to the new prices. And allows the business to gauge their reactions before making any more changes.

💡For Domino’s, it seemed like they struggled to maintain profitability while still remaining price-competitive. So it’s no surprise that investors sold off its stock big time - and its share price fell over 25%.

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