Domino’s Australia drops its 7 per cent pizza delivery fee in midst of cost of living crisis
Takeaway pizza night just got cheaper as Domino’s is forced to cut its hefty delivery costs to counter Australia’s cost of living crisis
- Domino’s Australia has reduced delivery costs by 7 percent
- Fast food giant dropped the fee after it suffered a $1.5 billion loss
- It said it had increased the high fee to meet rising business costs
Domino’s Australia has cut delivery costs by seven per cent in response to cost-of-living pressures that are scaring off customers.
The fast food giant announced the new measure on Tuesday, calling it a “gain for our customers and franchisees.”
It comes after the company added the expensive fee for deliveries last year in the wake of rising costs faced by food delivery workers.
Josh Kilimnik, CEO of Domino’s Australia and New Zealand, said the seven per cent fee was introduced to help franchisees cope with the rising cost of living.
“However, we know that our customers are also struggling — with rising interest rates, rents and household bills,” he said in a statement Tuesday.
It comes after the company added the costly allowance for deliveries last year in the wake of rising costs faced by food deliverers
Eliminating the seven percent delivery charge is a “win for our customers,” said Josh Kilimnik, CEO of Domino’s Australia and New Zealand
“Ultimately, what is a win for our customers is a win for our franchisees, because the best way for our stores to make a profit is by serving more customers.”
Domino’s hit customers with the seven percent fee last July, which was capped at $5, News Corp said.
The pizza delivery giant saw $1.5 billion wiped from its market value last February after customers began cutting back on takeout nights to save money.
Mr Kilimnik said Domino’s “didn’t get through everything well in those days”.
“We have made the decision to remove [the seven per cent] compensation because we want more customers to enjoy the convenience of delivery, and we hope this change will go a long way in making that happen,” he said.
The pizza delivery company saw $1.5 billion wiped from its market value last February after customers began cutting back on takeout nights to save money
Don Meji, boss of Domino’s Pizza, admitted that the company could have taken a leap of faith by passing the costs on to customers.
Australians have also faced rising costs from other food delivery companies such as Uber Eats and Door Dash.
Restaurants using these services often have to raise their own prices, as they charge 15 to 30 percent commission to outsource delivery.
The cost-of-living measure comes after research emerged last Saturday showing how prices had risen at two of Australia’s largest supermarkets.
Grocery prices at Coles were up 10.4 percent in April, while those at Woolworths were up 8.7 percent over the same period.
The research, conducted by investment bank UBS and analyzing more than 60,000 supermarket products, found that fresh food prices have increased by nearly 10 percent.
It comes as the Reserve Bank hiked interest rates by another 25 basis points on Tuesday — the 12th hike in just over a year.
The cash rate has now risen to an 11-year high of 4.1 percent and will add $97 to monthly payments on a typical $600,000 mortgage, fueling recession fears.
RBA Governor Philip Lowe said inflation was still too high after April’s monthly reading showed inflation rose from 6.3 percent to 6.8 percent.
“Inflation in Australia has peaked but is still too high at 7 percent and will take some time to get back into target range,” he said in a statement Tuesday.