There’s no shortage of pizza chains, but Domino’s has seen a lot of growth and popularity throughout the country.
Experts expect the pizza chain’s earnings to grow by 12.9% in 2022.
With an emphasis on great ingredients and decent deals, ordering pizza from Domino’s is often a no-brainer.
However, after ordering your food, you may feel a bit of shock when seeing how expensive your food is.
Here are 10 reasons Domino’s is expensive.
Why Is Domino’s So Expensive? (Top 10 Reasons)
1. Reduced Production Of Beef And Meat Farms
When COVID-19 hit, no one was sure of its repercussions or how long they would ripple through the economy.
In 2022, everyone is still feeling the crunch that the pandemic caused.
Farmers, in particular, faced a difficult time during the start of the pandemic and the lockdowns that ensued.
While the food industry was an essential industry that could remain in operation, they had to scale back their workers to reduce the chances of spreading the virus.
This meant that a lot of farmers had to let their workers go.
With fewer hands to help, it also meant that meat farms couldn’t slaughter and send out as many cows as they did before.
When the pandemic receded, farmers suddenly found themselves facing a high demand for beef and other types of meat.
However, they didn’t have the labor to support that demand.
As a result, they weren’t able to supply enough meat to reach demand.
In simple economics, when there’s more demand than supply for a product, the price of the product increases.
That’s what ended up happening with beef and other types of meat.
This impacts Domino’s because it needs meat and dairy for its pizzas.
When people order pepperoni pizzas or meat supremes, they expect the pizza to have meat on it.
Domino’s also has several sides that are meat-oriented.
Their chicken wings are a prime example.
The prices for all these types of meats have gone up, which means that the pizza chain is facing higher meat costs.
Since the chain is taking on more costs, its profit margin is affected.
To get its profit margins back, Domino’s had to increase its menu prices.
Domino’s is expensive because of reduced production from meat farms that occurred during the pandemic.
2. Culled Cows And Livestock
The pandemic didn’t only reduce production on meat farms, it also forced farmers to cull their livestock.
When lockdowns ensued, restaurants and grocery stores had to limit how many guests they could serve.
For a long time, restaurants weren’t able to serve anyone at all.
People could only get their food from grocery stores.
With money tight and everyone looking to stretch their dollars as much as possible, few people were buying expensive types of meat.
This impacted farmers in a big way.
Without their usual restaurant clients buying meat from them, many farmers ended up with more cattle than they could feed.
Keeping them would cost them a lot of money, and no one knew how long the pandemic would last.
Some farmers worried that if the pandemic lasted for years, and the lockdowns also lasted for years, then supporting all their cows would drive them out of business.
As a result, many farmers ended up culling their herds.
They either slaughtered the excess or kept their cows and livestock from breeding.
This created a major deficit in the number of cows and livestock that were available for slaughter.
When the pandemic and lockdowns ended earlier than expected, farmers suddenly found themselves in a tough situation.
They needed to produce meat at an accelerated rate.
The problem is that they needed their livestock to breed to get their numbers back up to what they once were.
Livestock need time to breed and grow.
It takes months for a pregnant cow or pig to give birth.
Then the farmer has to wait until the babies grow to a healthy and ideal weight for slaughter.
It takes a long time to get their numbers back up to what they used to be.
Meanwhile, Domino’s is feeling the financial strain of the meat shortage.
To cover the rising price of meat, it had to increase its menu prices.
Domino’s is expensive because the farmers chose to cull their herds to save on costs.
3. Labor Shortages On Farms
Labor shortages on farms have also impacted Domino’s menu prices.
While farmers had to fire workers on their farms during the pandemic, they suddenly found themselves scrambling for workers when the lockdowns ended.
The problem was that the workers didn’t want to return to the farms without increased pay.
The pandemic had made people more aware of their financial situations and how fragile it was.
Many workers also chose to value their time more.
Not all farmers were eager to increase pay for their workers.
Some simply decided to wait until desperation drove workers back to them.
Others gave the workers the pay they deserved and were able to get back to full production, more or less.
That said, labor shortages on farms are still a problem.
Without enough workers, the farm can’t produce as much meat as it would like.
This then impacts the supply, which impacts the prices.
The demand for meat hasn’t decreased.
If anything, it’s increased now that people are eating out at restaurants again.
Without the staff to support them, farmers are unable to reach that demand.
The increased cost of operations, brought on by higher wages on farms, has also impacted the price of meat.
Even if they’re able to get out more meat than other farms, they’re also facing increased operating costs since they’re paying their workers more.
As a result, their meat ends up costing more since they’re trying to increase their revenue to cover those costs.
With higher meat prices, Domino’s has to raise its prices, too.
The cost of doing business increases when the ingredient prices go up.
To cover those costs, the pizza chain must raise menu item prices.
Domino’s is expensive because of the labor shortages occurring on farms.
4. Grain Shortages For Meat Farms
Another way that the problems at meat farms are making Domino’s more expensive is the grain shortages that farmers are experiencing.
There are several factors behind the dwindling amount of wheat available.
Grain farmers are experiencing problems with the weather.
The drought had killed off many yields, and the little grain that they could grow wasn’t the most hearty either.
Most wheat grows in the heart of the United States.
This is also the area that experiences severe cases of drought from time to time.
With climate change affecting things both big and small, drought has been more and more common.
Without grain production, meat farmers have little to feed their cows.
To be able to produce the best meat, they need to feed their animals a standard diet.
If they’re unable to do so, then their livestock will starve and not reach an ideal weight for slaughter.
They may even become ill and sick and then be unsuitable for human consumption.
This means that farmers have to pay top dollar for grains to feed their livestock.
With grain supply low, but demand remaining the same, the price of grain increases.
Farmers then have to take on those costs to feed their livestock.
When they sell their meat, they consider those costs in their prices.
When Domino’s buys meat from them, it has to do so at higher prices.
Since Domino’s is taking on higher costs because of the increased price of meat, it must make up for its missing profits.
It does so by increasing the prices on its menu.
Domino’s is expensive because of how the weather is impacting the prices of grain.
5. Drought And Vegetable Farms
Meat farms aren’t the only ones raising their prices.
Vegetable and crop farms are also experiencing problems that are requiring them to raise their prices.
One of their biggest problems is also the weather.
Many vegetable farms are experiencing drought.
This means that they’re unable to properly water and irrigate their crops.
As a result, their crops either don’t flourish and grow at all or they grow up weak.
They don’t produce much of a yield.
This means that they’re unable to sell as many crops as they normally would since not that many matured into sellable crops.
Some farmers have had to take on the added cost of having water delivered to their farms.
That’s an expensive venture since water in certain areas is extremely expensive.
The cost of transporting water is even more expensive since you have to pay for the delivery driver’s time and the cost of fuel to get to the farm.
That all results in higher prices.
There’s also the problem with demand.
Vegetables are in more demand than ever.
Whether it’s restaurants, grocery stores, or pizza chains, everyone needs vegetables.
In an effort to combat climate change and improve individual health, many have also turned to vegan diets.
With businesses looking to capitalize on this lifestyle, they’ve also needed to buy lots of vegetables to make new products.
With demand high and supply low, the cost of vegetables has gone up.
This impacts Domino’s because it needs vegetables for its toppings and seasonings.
Since it is taking on higher costs by buying vegetables, the company needs to increase its menu prices to cover those costs.
Domino’s is expensive because of the rising cost of vegetables.
6. Labor Shortages At Domino’s Stores
Labor shortages haven’t only impacted farms.
Domino’s and many other pizza chains and fast-food restaurants have experienced labor shortages.
Part of that came as a result of these stores firing employees when they were unable to remain open during the pandemic.
However, most of it is because workers were no longer interested in working for a company that barely paid minimum wage.
Some stores have increased their hourly wages which has helped bring in some workers.
That also means that the store has a higher cost of operation and higher menu prices help cover those costs.
Those that haven’t increased wages are still struggling with finding workers.
This impacts their prices because it means they’re unable to do as much business.
They can only take on and get out so many orders because there are fewer people to make the pizza and deliver it.
That starts to cut into their profits.
They may not be able to produce enough to cover the cost of operation.
To ensure that they can remain open, some stores may need to raise their prices.
This reduces how many orders they can take in a day but also allows them to earn the same amount of profit that they might with a full staff.
Domino’s is expensive because it’s experiencing problems with labor shortages.
7. Investments In Technology
Domino’s is always looking to make the ordering process easier and faster.
The company knows that it also helps its workers since they don’t have to man the phones as often.
They’re able to spend more time in the kitchen getting out orders.
To encourage its customers to order online, Domino’s has several apps and technologies in the works.
One of the first was the ability to track the order and keep the customer aware of the process their order was going through.
Customers could see when their pizzas were in the oven and when they were out for delivery.
This not only made Domino’s more popular, but it also encouraged customers to order online.
The company is further doing what it can to make the online order experience easier and more beneficial.
Another new method is allowing customers to save custom pizzas or regular orders to a list.
They can then easily reorder from that list with a single button and have their order ready.
These types of investments don’t always come cheap.
Domino’s has to pay software engineers and researchers to determine the next-best thing that it can offer its customers.
By investing in itself, the company knows that it can serve its customers better and outlast the competition.
Investments obviously cost money.
To continue its research, Domino’s has to keep pouring money into its R&D department.
This also sometimes means that it needs to increase prices to cover those costs.
Domino’s is expensive because of its increased spending in its technology sector and research department.
8. Updating Buildings
Domino’s is also aware that some of its older buildings are impeding its workers’ abilities to get food out fast.
The COVID-19 pandemic showed the company that it needed to make some changes fast if it wanted to be able to survive.
That meant many stores ended up getting upgrades.
Carryout and window delivery were already a thing for some stores, but not all of them.
Domino’s invested in many restaurants to enable guests to get their food through a drive-thru window rather than going inside the building.
The company also wanted to upgrade the kitchen to ensure it helped give the workers the best possible environment in which to work.
These upgrades and updates don’t come cheap.
Domino’s has had to spend a good amount of money to ensure all its stores have a chance of succeeding.
With those investments come increased menu prices.
Domino’s is expensive because of the upgrades and updates it’s been doing to its stores.
9. High-Quality Ingredients
A final reason that Domino’s is expensive is its focus on buying and using high-quality ingredients.
The pizza chain doesn’t use low-quality ingredients to make its pizzas and it shows.
When its customers see their pizzas, they’ll see big pepperoni slices, big steak slices, and veggies covering their pizza.
Domino’s doesn’t skimp out, and it doesn’t use ingredients that look malnourished.
Because Domino’s emphasizes using high-quality ingredients, it also takes on more costs.
That’s because it costs farmers more to make high-quality products.
Domino’s then pays more for those ingredients, and it passes those costs onto its customers.
Domino’s is expensive because it uses high-quality ingredients which cost more.
10. Rising Price Of Grain
Of course, drought isn’t the only thing raising the price of grain.
Meanwhile, since grain prices are rising, Domino’s pizza is also experiencing price increases.
You can’t make pizza without grain.
It forms the dough which makes up the majority of the pizza.
If grain prices are rising, then Domino’s prices are also going to rise.
That’s because it’s taking on more costs by buying the expensive grains.
Domino’s pizza is expensive because of the increase in grain prices.
Domino’s is a pizza chain that’s looking to the future.
It’s investing in itself to ensure that it can continue to serve its guests in ways that they actually need.
With rising food costs due to several factors, however, the pizza chain has had to raise its prices, too.