The price of a favourite takeaway is about to rise. Here's why
Domino's pizza prices are likely to rise this year as employment costs continue to climb, according to the company's chief executive.
Andrew Rennie said that price increases will be necessary to offset the rising cost of labour.
"Look, there's no doubt, I think later on in the year, there'll be some need to do that," Mr Rennie said.
However, he said the exact amount of the price hike remains uncertain.
Mr Rennie cited unpredictable government policies as a factor making it difficult to forecast the precise increase.
The company, which employs at least 35,000 workers, is facing a significant rise in its employment bill from April onwards.
Both the national minimum wage and employer national insurance contributions (NICs) are set to increase, adding to the financial pressure. Domino's has already reported a £3 million annual impact from the rise in NICs alone.
The increased minimum wage will add approximately 10 per cent to franchise operators' employment costs, amounting to 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 would allow Domino's to make more money from each pizza.
Mr Rennie said: '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 per cent.
He did not put a timeframe on when it might reach the 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 (of) 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.
Sales had continued to rise in the first 10 weeks of the new financial year.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
31 minutes ago
- The Independent
Tax hikes ‘almost certainly' to come if economy worsens, IFS says
The Institute for Fiscal Studies (IFS) warned that further negative economic news will 'almost certainly' lead to more tax increases, putting pressure on Chancellor Rachel Reeves. Council tax is projected to rise at its fastest rate in 20 years, with potential annual increases of up to 5 per cent as local governments struggle to close funding gaps. The IFS suggested more people may be forced to pay higher income tax rates due to 'fiscal drag,' potentially generating an additional £10bn a year by 2029. Government sources did not deny the possibility of extending the freeze on tax thresholds, stating that future tax decisions will be made at the Budget. IFS director Paul Johnson criticised the Treasury for 'making up the numbers' and described Chancellor Reeves' recent speech as 'baffling,' while also expressing concerns about the cost of Labour's childcare promises.
Daily Mail
43 minutes ago
- Daily Mail
Wimbledon's £66,000 loser's reward! SW19 prize money takes a major hike - with next month's winners taking home £3m
As tennis stars continue to bang the drum for more cash, Wimbledon have announced the prize money for their singles champions will cross the £3million barrier for the first time. The total purse for the Championships will be £53.5million, up seven per cent on last year. The biggest gainers will be the men's and women's singles champions - who see an 11.1 per cent increase from £2.7m to £3m - and the first-round losers. Those falling at the first hurdle will be compensated with £66,000, a 10 per cent increase on last year and more than triple the amount given to Bjorn Borg for winning the title in 1980. The overall prize money has doubled in the last 10 years, although the seven per cent increase is lower than the 11.9 per cent just from 2023 to 2024. The increases come against the backdrop of a meeting, held in Paris during the French Open, between Grand Slam supremos - including Wimbledon's CEO Sally Bolton - and a group of the top players who were demanding more cash. The lawsuit filed by the Novak Djokovic-backed Professional Tennis Players' Association, which names Wimbledon as a 'co-conspirator', has stirred up a hornet's nest in tennis. One of the main tenets of the lawsuit is the belief that players are significantly underpaid compared to other sports. The meeting between top players and Grand Slam chiefs, while not directly linked to the lawsuit, comes as a consequence of the issue of prizemoney being thrust into the limelight. But Wimbledon chair Debbie Jevans said: 'The focus on prizemoney at the Grand Slams does not get to the heart of what the challenge is with tennis. The challenge is the fact that the players don't have an off-season, they have increasing injuries. 'But as a tennis player, they're always going to, I think, ask for more money.'
Sky News
an hour ago
- Sky News
Activist fund Palliser builds stake in travel retailer WH Smith
A prominent activist investment firm has begun building a stake in WH Smith, the travel retailer, weeks after it sold off its historic high street arm. Sky News has learnt that Palliser Capital has acquired close to 5% of the London-listed company in recent weeks - worth about £65m at the current share price. Sources said the stake was expected to be disclosed publicly at an industry conference on Thursday afternoon. Palliser, which recently led an effort to force Rio Tinto, the global mining group, to abandon its London listing in favour of Australia, is said to hold WH Smith's management team - led by chief executive Carl Cowling - in high regard. The investment fund believes, however, that returns to WH Smith shareholders could be bolstered through a series of self-help measures. These included reviewing the travel retailer's leverage targets and capital allocation policy to ensure better use of its balance sheet, according to one source. Improving investor communication and disclosure, and overhauling its executive incentive structure to align it more closely with the interests of shareholders are also on Palliser's wishlist, the source added. Shares in WH Smith are still trading at levels comparable to their lows during the COVID-19 pandemic, when the global travel industry faced near-total shutdown for long periods. The company's depressed share price is not unique to WH Smith, with SSP, the transport catering group, also drawing interest from activists in recent months. WH Smith trades from more than 1,200 travel stores in over 30 countries. "The group operates in structurally advantaged growth markets," it said in April. "Passenger numbers are forecast to grow in air travel by 2.5 times between 2024 and 2050, driven by both population and economic growth. "Investment in airport infrastructure is also increasing across the globe creating more opportunities for airport retailing." Palliser is understood to have identified WH Smith's high growth potential in the US as particularly attractive, and is said to believe that there is scope for its shares to nearly double in value in the next three years. WH Smith's decision to offload its town centre business, which dates back to 1792, was revealed by Sky News in January, and was viewed as a fresg symbol of the British high street's decline. Comprising about 480 stores and roughly 5,000 staff, the unit was sold to Modella Capital, an increasingly prolific investor in retail businesses. The stores are being rebranded under the new name TG Jones. On Thursday afternoon, shares in WH Smith were trading at around £10.60 - down more than 10% over the last year, and giving the company a market capitalisation of £1.36bn. A spokesman for Palliser, which led a successful campaign against the board of London-listed Capricorn Energy, declined to comment.
