August 11, 2002
DETROIT -- Get the door -- and bring an extra dollar.
Domino's Pizza, which grew into a giant in the industry on its promise of fast, free delivery, is now testing a $1 delivery charge in 350 of its 4,800 outlets and will decide by the end of the year whether to implement the charge nationwide.
Spokeswoman Holly Ryan attributes the fee to many costs, including the cost of ingredients. About a year ago, the rising price of cheese concerned many pizza makers. However, Ryan said Saturday that the cost of cheese is low right now, but the cost of food in general, combined with the cost of gas, utilities, labor and insurance, called for a price increase by Domino's.
She said the company had a choice about how to make up for its expenses: charge a delivery fee, raise pizza prices across the board, skimp on ingredients or fire employees.
Domino's chose the fee, and it isn't alone.
Pizza Hut, which tested delivery fees a couple years ago, now charges 50 cents for every pizza delivery. The Dallas-based pizza chain has 8,000 outlets in the United States.
One hundred Domino's restaurants across the country started charging for home delivery in November. The fee was implemented at an additional 250 stores in February.
"It's still a very small number," Ryan said Saturday.
She said customers so far have shown little reaction to the change.
At the end of the year, the company will go over the response and then decide whether to take the charge nationwide.
Domino's, based in Ann Arbor, Mich., recently reported second-quarter earnings of $41.6-million, an increase of 13.9 percent over the same period last year. The privately held pizza maker had sales of $904.3-million for the period ended June 16, a 6 percent increase over the year-ago period.