Dominos products are nothing special, they are cheap but with the cost of everything rising, offering cheap pizzas with just eventually eat into the company margin.
The $6/$8 pizza offerings, I don't think the franchisees can actually make any money on them. Lets take a $6 pizza for example:
1. 60c goes to GST 2. probably another 60c goes to DMP franchise fee 3. $1.50 for the material 4. then you have rent, power, insurance, compliance costs, wages, phone, internet, bank fees etc...
nothing much left in the operator's pocket.... of course you can argue that these cheap pizzas are used to kill off competitors and also customers will also buy other higher margin products... But the fact is, most people buy Dominos not because of the quality or product offering, they buy because of price and there just isn't that much the business can do to lower the price anymore.
So DMP will continue to make money but I really can't see much growth. This price is not bargain territory and not cheap either.
DMP Price at posting:
$17.74 Sentiment: Hold Disclosure: Not Held
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