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2
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· Posted on
February 21, 2024

Domino's launches premium pizzas to lift margins

Margins are being hammered by inflation, so suit up before ya dig into that Peri Peri.

What's the key learning?

  • Price inflation is causing an increase in the cost of Domino's' raw materials (think: cheese, tomatoes and meat)
  • Rather than increase the price of all pizzas, Domino's will introduce a premium range of pizzas to make up some of the lost margin.

Background: Domino’s Pizza is the largest pizza chain in Australia based on stores and sales. It also owns the Domino's franchise in 10 other countries (like NZ, France, Japan and Germany).

What happened: Domino's' CEO has warned that price inflation will cause an increase in the cost of the company's raw materials (think: cheese, tomatoes and meat).

What else: Rather than increase the price of their tasty, tasty core pizzas, Domino's will introduce a premium range of pizzas to make up some of the lost margin on the core pizzas (due to inflation).

🔔 What's the key learning?

💡In most businesses, the pricing model will fall into one of two categories.

  • Low margin and high sales volume: that means you’re not making as much money on each product, but you’re selling a LOT of it.
  • High-margin products and lower sales volume: that means you're making more money on each product, but you're selling fewer products.

💡Domino’s has always specialised in driving many customers to purchase with low margin pizzas - but will now upsell with the créme de la créme, premium pizzas.

‍

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