My Cheese Bra and I are deeply offended, LOL!
Posted on 11/01/2007 2:46:27 PM PDT by bruinbirdman
The cost of a Domino's Pizza is set to rise as the company passes on the spiralling price of mozzarella cheese to its customers.
Favourites such as the 'Pepperoni Passion' and 'Meateor' will be about 3.7pc more expensive in the New Year, after Domino's has adjusted menu prices to deal with the rising cost of the stringy cheese, a key component of nearly all pizzas.
The cost of mozzarella has risen by more than 50pc or £1,060 per tonne since June, taking a bite out of group profits with a one-off cost of £450,000. The increase has been driven by an unprecedented hike in the cost of milk.
Domino's has not yet been able to pass the price hikes on to customers because of what chief executive Stephen Hemsley described as " the extraordinary rapid increase in the cost of cheese."
The company is usually able to maintain price stability and predictability by agreeing annual price contracts with its suppliers.
In March however its cheese supplier Dansco went into receivership and although it was quickly taken over by Saputo, Domino's lost out on its fixed price contract and was forced to renegotiate at a time of rapid price inflation.
As a result Domino's didn't have enough time to pass on the cost to its franchises, which would have needed about eight weeks notice to change their menus.
The price of wheat has doubled since December to £227 per tonne, which will hit Domino's in January when its fixed price contract is renegotiated.
The combined effect of the cheese and flour rises will be a 3.7pc increase in the price of a Domino's pizza. According to the company the average Domino's bill is £13.50 for 2.2 people. About £10 of that is spent on pizza, translating to an average cost increase of 37p per order.
Mr Hemsley was speaking as the company gave a third quarter trading update and details of a senior management reshuffle.
He said that a 14.2pc increase in like-for-like sales in the 13 weeks to September 30 had "more than taken care" of the increased costs of cheese, and that Domino's was still on course to meet analysts' full-year forecasts.
"The underlying business is going like a train. The food price shenanigans are a bit of a side issue and the bad news is out there now," he said.
Domino's capitalised on interest in the rugby World Cup with the launch of a new pizza called 'The Scrummy.' "Meat pizzas do well," said Mr Hemsley, "and we thought there would be a lot of testosterone-charged men watching the rugby so we launched it as a guest pizza with six meats."
Executive chairman Colin Halpern will retire on December 31 and take up the position of non-executive vice chairman. Mr Hemsley will take over as executive chairman, and deputy chief executive Chris Moore will step up to the chief executive role.
Domino's opened 10 new stores in the third quarter, taking the total number to 480.
But... but... I like cheese!
What does the price of mozzarella have to do with the cost of a Domino’s pizza?
what’s a moose to do now?
The easy solution is to use moosarella, which is a synthetic concoction of...of....umm...well, all I know, it’s great on a pizza!
“The price of wheat has doubled since December to £227 per tonne, which will hit Domino’s in January when its fixed price contract is renegotiated.”
____________________________________________________________
And, dear readers, can anyone guess WHY the price of wheat has doubled recently?
It just might possibly have something to do with U.S. farmers plowing under their wheat and planting (subsidized) corn instead for you-know-what?
This is turning into one heck of a macroeconomics lesson. I do hope it is properly analyzed and written up in all its far-reaching consequences for future generations of dismal scientists.
My Cheese Bra and I are deeply offended, LOL!
Australias wheat harvest is down 25% because of draught?
yitbos
If the enivormental whackos would let refineries be built, we wouldn't be having these issues.
no one’s posting Starbuck’s biggest cost is employee health insurance not coffee beans?
The price of all grain has increased because the cost of fuel for the tractor and the train and truck has increased. Transportation, all of it.
That shouldn’t affect the cost of a dominos pizza much. However, if the price of cardboard went up...
I’ve noticed prices for everything rising lately. Local deli, local diner, local stationery store . . .
Shut that bloody bazouki off!!!!
It is Al Gores fault (bear with me):
Al Gore ——>Global warming
Global Warming———> Oil Dependence
Oil Dependence-——> Ethanol
Ethanol——> Corn
Corn -——> Cows
Cows ———> Milk
Milk ———> Cheese
So, if Al Gore could just give back his Nobel prise, we could all eat pizza.
......Bob
Domino’s makes pizza?
Who knew?
I agree with you completely, except for one small correction:
This is a lesson in microeconomics (supply, demand and pricing in various markets) more than macroeconomics (the effects of government spending, taxation, etc. on GDP, inflation, etc.). Misguided government policy is distorting supply and demand in markets for commodities such as wheat, corn, dairy, and so forth.
While the pizza sounds good, I doubt I could eat something called 'the Scrummy.'
"Scrummy" sounds like a conflation of "scrotum" and "crummy." I'll pass.
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