Yahoo Finance Domino's backflips on unpopular fee in win for pizza lovers
The company has changed course following its first-half earnings shocker.
In a win for inflation-weary pizza lovers around the nation, Domino's Pizza has announced the elimination of their unpopular 7 per cent delivery service fee at all of their restaurants nationally.
The fee was first introduced in July 2022 in an effort to offset the impact of rising fuel costs on franchisees' delivery operations, but proved incredibly unpopular among customers, many of whom complained the fast-food chain already charged a significant premium on its delivery menu.
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The service fee was originally 6 per cent, but then quietly increased sometime after its introduction.
"Just noticed this on my recent order," one unhappy Aussie posted on Reddit at the time. "It's not enough that you pay about 30 per cent extra on a delivery order, you're now being charged an actual delivery fee."
Domino's Asia-Pacific CEO Josh Kilimnik said the company was pleased to give customers a win in the current inflationary environment.
"We introduced this fee because we felt it was the best option at the time to protect the livelihoods of our franchisees, who are small business owners in their local communities," he said.
"However, we know that our customers are feeling the pinch too – with interest rates, rents and household bills going up and up. At the end of the day, what is a win for our customers is a win for our franchisees – as the best way for our stores to grow profits is by serving more customers.
"We have made the decision to remove this fee because we want more customers to be able to enjoy the convenience of delivery, and we hope this change goes a long way to making that possible."
Fee removed after profit slump
The backflip comes in the wake of the company's disastrous February 22 earnings call, where it was revealed first-half profits were down a shocking 28 per cent and Group CEO Don Meij was forced to admit the company had made a huge mistake when setting delivery prices.
Domino's stock was punished at the time, falling 24 per cent on the day and sliding another 12 per cent over the coming sessions. Months on from the announcement, the share price remains down around 30 per cent, with full-year earnings not due till August.
"Domino's is supposed to be a cheap s**t pizza," wrote one Redditor after the earnings disaster, seeming to sum up the feelings of the average Aussie consumer.
"If I'm paying $40 I might as well be at a proper Italian pizza place."
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