| Domino's $1 delivery
charge A statement from the webmaster of tipthepizzaguy.com I'm saddened by the news that Domino's is testing a $1 delivery charge. They will decide by the end of the year whether to make it nationwide.1 It must be stopped. Let the company know what you think while they test market the idea. Information on how to contact Domino's follows. Our site's online poll shows that 72% assume the driver gets a raise, so the idea is misleading.2 Customers believe they are paying for delivery. After all, it's called a delivery charge. They assume it must go to the driver, the only employee bypassed when you get it yourself. Despite what it's called, the delivery charge pays for general costs. The purpose is to offset the cost of food and overhead.1 This is a price increase in disguise. The driver does not reap a monetary benefit. There is no talk of it reaching the driver as wages remain stagnant. The delivery charge will seriously hurt driver income, namely their tips. Since most tips are $2, drivers are likely to see their tips cut almost in half. The loss would be $200 a month, conservatively.3 Most drivers rely on tips for 2/3 of total income. They need tips to survive and the delivery charge stabs them in the back. Delivery drivers are the major component to Domino's success and if they don't do well, we are likely to see the company spiral downward. For tip etiquette, I urge you to consider the delivery charge as part of the bill before calculating the tip. It is merely another line on the receipt for an item. In my opinion, it's as tacky as an extra line for the store's electricity. I hope delivery charges do not confuse people but I know they will. This is another example of why they are a bad idea. What I find interesting is Domino's financial situation. They would have you believe the company is in crisis to call for drastic measures like the $1 delivery charge, but they are far from it. According to their website, Domino's had record earnings for the last four quarters. Their second quarter 2002 earnings were 13.9% over the previous year, a second quarter record of $41.6 million.4 First quarter 2002 earnings were up 24.5% from the previous year to a first quarter record of $45.7 million.5 Fourth quarter and third quarter 2001 broke records for their respective quarters.6,7 Domino's had a banner year in 2001. Earnings were $162.2 million, an annual record, up 10.1% from 2000.6 Obviously, their unprecedented success continues into 2002 with record breaking first and second quarters. A company that can afford to pay debts cannot be in financial trouble. Over the last four quarters, Domino's repaid nearly $53 million in debts.4 Announcing the second quarter 2002 results, Domino's Chairman and Chief Executive Officer David A. Brandon said, "Domino's Pizza continues to produce record results despite the challenges associated with the current economic environment."4 It appears they did very well without a delivery charge. Domino's claims their food costs are rising. Instead, cheese prices have dropped. The price fell from $1.61 a pound in June 2001 to $1.11 in June 2002.8 Since cheese makes up a large part of food costs, it makes me wonder what they did with the 50-cent savings per pound. Domino's uses 152 million pounds of cheese annually.9 That translates to a savings of $76 million, yet they claim the delivery charge is needed to offset rising production costs.10 This is not the sign of a company in financial crisis. They continue to make record earnings quarter after quarter and now they want to take tips away from their drivers with a $1 delivery charge. They claim their operating costs have risen too high despite saving $76 million. I urge you to contact Domino's and voice your concerns. It's not too late to change their minds because they are test marketing the idea until the end of 2002.10 Do not complain to the driver or to the store. Go directly to the source. Contact the company by phone at 888-DOMINOS or the customer care hotline, 800-366-4667, or write to: Domino's Pizza LLC Attn: Customer Care Center 30 Frank Lloyd Wright Drive P.O. Box 997 Ann Arbor, MI 48106 You can contact them online at http://www.dominos.com/dominos_pizza/contact.nsf/frmContact?openform. Corporate headquarters in Ann Arbor, MI is (734) 930-3030. The delivery charge is not nationwide yet, but it will be if enough customers don't stop them from doing so. Sincerely, 1 Associated Press. (2002, August 12). "Domino's tests charge for delivery." Retrieved August 18, 2002, from https://www.heraldtribune.com/article/LK/20020811/News/605234744/SH 2 Results of online poll reflecting the start of Pizza Hut's delivery charge, which mirrors Domino's delivery charge. Based on 1,795 votes. Retrieved November 21, 2002, from http://tipthepizzaguy.com/pollresults/poll23.htm 3 Based on 15 deliveries a night, four nights a week, a total of 240 deliveries a month. A one dollar loss on each delivery is a loss of $240 a month. This is very conservative because a busy driver can take 100 deliveries a week, a potential $400 monthly loss. Not every customer tips or would reduce the tip, and not every store is busy or slow, so I would go with the conservative $200 estimate. The real number is probably closer to $300. 4 Inside Domino's: News Headlines. (2002, July 30). "Record Second Quarter 2002 Results." Retrieved August 18, 2002, from http://www.dominos.com/dominos_pizza/home.nsf/vwContentByKey/ W25CJJK8794DOMBEN 5 Inside Domino's: News Headlines. (2002, May 7). "Record Results for First Quarter 2002." Retrieved August 18, 2002, from http://www.dominos.com/dominos_pizza/home.nsf/vwContentByKey/ W259WJ5F069DOMBEN 6 Inside Domino's: News Headlines. (2002, March 5). "Domino's Pizza Announces Record Results for 2001." Retrieved August 18, 2002, from http://www.dominos.com/dominos_pizza/home.nsf/vwContentByKey/ W259CR6F483DOMBEN 7 Inside Domino's: News Headlines. (2001, October 23). "Record Third Quarter 2001 Results and Strong Same Store Sales Growth." Retrieved August 18, 2002, from http://www.dominos.com/dominos_pizza/home.nsf/vwContentByKey/ W259CR6F483DOMBEN 8 Cheese Reporter. (2002, August 16). "Cheese Block and Barrel Prices." Retrieved August 18, 2002, from http://www.cheesereporter.com/charchives.htm 9 Inside Domino's. (2002). "Pizza Particulars." Retrieved August 18, 2002, from http://www.dominos.com/C1256B420054FF48/vwContentByKey/ W256UQZK683DENNEN 10 Associated Press. Last updated: November 21, 2002 return to top |