Domino’s Australia drops its 7 per cent pizza delivery fee in midst of cost of living crisis

Domino’s Australia has dropped its seven per cent delivery fee in response to cost of living pressures scaring off customers.

The fast food giant announced the new measure on Tuesday calling it a ‘win for our customers and franchisees’.   

It comes after the company added the pricey fee for deliveries last year in the wake of soaring costs facing food-delivery businesses.

Domino’s Australia and New Zealand CEO Josh Kilimnik said the seven per cent fee was introduced to help franchisees cope with the rising costs of living. 

‘However, we know that our customers are feeling the pinch too – with interest rates, rents and household bills going up and up,’ he said in a statement on Tuesday.

Ditching the seven per cent delivery fee is a ‘win for our customers’, Domino’s Australia and New Zealand CEO Josh Kilimnik said

‘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.’

Domino’s hit customers with the seven per cent charge last July which was capped at $5, News Corp said. 

The pizza delivery giant saw $1.5billion of its market value wiped by last February after customers began cutting down on takeaway nights to save money. 

Mr Kilimnik said Domino’s ‘didn’t get everything right through that time’.

‘We have made the decision to remove [the seven per cent] 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,’ he said. 

The pizza delivery giant saw $1.5billion of its market value wiped last February after customers began cutting down on takeaway nights to save money

Domino’s Pizza boss Don Meji admitted the firm could have jumped the gun in passing the costs on to customers. 

Australians have also been copping rising costs from other food-delivery providers like Uber Eats and Door Dash. 

Restaurants who use these services often need to increase their own prices as they fork out 15 to 30 per cent commission to outsource the deliveries.  

The cost-of-living measure comes after research emerged last Saturday showing how prices at two of Australia’s biggest supermarkets had surged.

Grocery prices at Coles had risen by 10.4 per cent in April, while Woolworths had increased by 8.7 per cent over the same period.

The research, which was conducted by investment bank UBS and involved the analysis of over 60,000 supermarket products, found that the prices for fresh food leapt by almost 10 per cent.

It comes as the Reserve Bank hiked interest rates by another 25 basis points on Tuesday – marking the 12th increase in little more than a year.

The cash rate has now risen to an 11-year high of 4.1 per cent and will add $97 to monthly repayments on a typical $600,000 mortgage, sparking fears of a recession. 

RBA Governor Philip Lowe said inflation was still too high after April’s monthly reading showed inflation rising to 6.8 per cent, up from 6.3 per cent.

‘Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,’ he said in a statement on Tuesday.