Domino's pizza prices will ‘no doubt' rise this year amid higher tax bill

Independent

11-03-2025

The boss of Domino's said he expects to bump up prices this year amid rising employment costs.
Andrew Rennie told the PA news agency the chain will 'no doubt' need to increase prices to customers at some point in 2025 to keep up with the surging cost of employing people.
Domino's UK and Ireland chief executive said: 'Look, there's no doubt, I think later on in the year, there'll be some need to do that.'
But 'it's hard to say' how much they will rise by, he continued, pointing to what he sees as unpredictable Government policy.
The company has at least 35,000 workers but faces a growing employment bill from the start of April, as the minimum wage and employer national insurance contributions (NICs) are set to increase.
Domino's has already reported a £3 million-a-year hit from the rise in NICs, while the cost of the minimum wage increase will mean a roughly 10% increase in employment costs for franchise operators, or 'tens of millions' of pounds.
Mr Rennie said: 'It depends on what the consumer does.
'If the national living wage puts more money into consumers' pockets, and they start spending more, we may not need to do much at all.
'The trouble is, every morning we wake up there's something different being announced. We don't know what the second half of the year holds.'
Meanwhile, the company wants half of the pizzas it sells to be collected by customers in future, rather than delivered.
Mr Rennie said he is 'going after collection in a bigger way this year' partly to mitigate the rising costs.
Domino's has thousands of delivery drivers and riders, who ferried its pizzas to customers in an average of 24-and-a-half minutes per order last year.
But cutting out the delivery element allows it to make more money from each pizza.
He said on Tuesday: 'Collection is very efficient for franchisees, it is a lot lower labour, so it actually brings you more margin.'
Just over one-third of Domino's orders are picked up by customers in the UK and Ireland, but Mr Rennie said he wants to emulate the situation in the US, where the figure is 55%.
He did not put a timeframe on when it might reach the 50% target, adding that it is 'not going to happen straight away'.
Part of the plan centres around opening more stores in rural areas, which 'often have limited competition, and our strong national brand is a significant competitive advantage' compared to in cities.
Mr Rennie, who once ran a 30-strong Domino's franchise in Australia, said: 'When I was a franchise I used to own all my stores in rural areas and we had some of the highest collection percentages in the country.
'It's easy to park, it's easy to drive there and you save money… When we open stores in country areas right now, we have a much higher collection percentage than we do in the urban areas.'
The London-listed company opened 54 stores across the UK and Ireland in 2024 and plans to open more than 50 more this year, with a target of more than 1,600 by 2028.
Domino's cautioned over an 'uncertain economic environment' but said sales had continued to rise in the first 10 weeks of the new financial year.