ANN ARBOR, Michigan: Domino's Pizza has missed its quarterly sales projections as inflation and higher delivery fees have discouraged customers and caused the company's shares to drop 11 percent.
In line with other US food chains, Domino's increased delivery charges and menu prices to counter higher labor and commodity costs over the past year.
Despite offering limited-time discounts to lure back customers, sales for the world's largest pizza chain, which is based in Michigan, declined 60 percent.
"We expect the economy to be a headwind for our delivery business in 2023. Every day, delivery customers will be deciding where to spend their hard-earned dollars," said Domino's Chief Executive Russell Weiner, as quoted by Reuters.
Despite improving staffing levels, the company has faced shortages of delivery drivers in the US, which increased delivery times and further stifled sales.
"For Domino's, the fourth-quarter US same-store sales weakness was disappointing, and it is raising a bit of a red flag," said Northcoast Research analyst Jim Sanderson, according to Reuters.
The ongoing weakness in US deliveries, combined with macroeconomic pressures, forced Domino's to downgrade its outlook for global retail sales growth to between 4 and 8 percent over two to three years. Its expected growth was previously 6 to 10 percent.
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