Domino’s Pizza, Inc. (NYSE:DPZ) To Raise Wages Following In The Footsteps Of McDonald’s, Wal-Mart


Domino’s Pizza, Inc. (NYSE:DPZ) is looking to raise wages to woo the right workers. The company’s CEO, Patrick Doyle, said that attracting workers is getting tougher amid improvements in the U.S. economy. Domino’s wants to copy McDonald’s Corporation (NYSE:MCD) and Wal-Mart Stores, Inc. (NYSE:WMT) in their minimum wage moves. The company is looking for the right people to fill bakery and delivery positions.

Given that the labor market is getting tight, Domino’s Pizza, Inc. (NYSE:DPZ) has no choice but to do what the market demands, and that means raising wages to attract the right workers it needs in its system as it pursues more growth.

Domino’s Pizza, Inc. (NYSE:DPZ) operates both company-owned stores and franchise locations. The company will pay more to hire the right employees at its own stores. However, the issue of pay raises at the franchise locations comes down to entrepreneurs. The majority of Domino’s locations are operated through franchise arrangements, the same case applies to McDonald’s.

Extra cost from wage hike

Domino’s performance has been strengthening in recent times with same-store sales rising 7.5% last year. Shares of the pizza maker have gone up 30% in the course of the last 12 months. A hike in wages is expected to bring some extra cost to the company, but the move is expected to further strengthen the company’s performance.

Digital sales going well

Sales through digital platforms are improving at Domino’s Pizza, Inc. (NYSE:DPZ), thanks to its successful turnaround campaign. Digital channels now account for nearly half of the orders that the company fills, but it hopes to do more, especially through expansion of its mobile platforms. The company’s CEO, Doyle, disclosed that orders coming through mobile are growing faster than desktop orders. This has shown that the company can significantly strengthen its sales through further mobile penetration.

Domino’s mobile apps are available on a wide range of devices and platforms, such as Pebble smartwatches and also wrist wearables powered by Google Inc (NASDAQ:GOOGL)’s Android OS. The launch of Apple Inc. (NASDAQ:AAPL)’s Apple Watch is also expected to provide another mobile platform for Domino’s to reach more customers.

Currently, Domino’s Pizza, Inc. (NYSE:DPZ) is trying to restructure its menu, eliminating some items after which it will be able to add some new items.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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