👉 Background: Domino's Pizza Enterprises is the ASX-listed company that owns more than 2,800 Domino's Pizza stores across Australia, New Zealand, Japan, Taiwan, and a heap in Europe too.

👉 What happened: Last year, Domino's increased the price of its pizzas to offset the rising costs of ingredients. It also added a 6% delivery fee to offset fuel costs. But, this decision has backfired on them. In fact, Domino's released its full year results and have seen its net profit drop by more than 74%.

👉 What else: Now, Domino's has got its tail between its Meatosaurus pizza legs. It will make more than 200 staff redundant globally and promises not to increase prices anymore.

What's the key learning?

💡The art of pricing is like trying to balance the perfect amount of toppings on a pizza. There is a delicate balance to strike between pricing your product for profit but also ensuring you're not hurting its perception.

💡Raise the prices too much and customers might just head for the door. Raise the prices too little and you can't cover the increase in costs. For Domino's, their 10-11% price rise plus delivery fee was a painful lesson learned.

💡Interestingly though, we've seen almost all manufacturers and supermarkets increase prices and it hasn't backfired in the same way (Think: Coles, Woolies, Nestle, Procter & Gamble, Coca-Cola). So, maybe there's more to this than just pricing.

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