Domino's pizzas to shrink in cost-cutting measure
Australia's largest pizza chain, Domino's, is set to slice the size of its pizzas in a cost-cutting measure.
A report by Deutsche Bank analyst Michael Simotas says Domino's will soon begin a trial of smaller pizzas as part of a strategy to cut food costs as the company faces a higher wage bill from new weekend penalty rates for employees.
"We understand Domino's is planning to reduce the size of its pizzas to provide additional cost relief," Mr Simotas said in a statement on Thursday.
Domino's has also ditched Coca Cola-Amatil as its soft drink supplier in favour of Pepsi/Schweppes, a move Mr Simotas estimates will reduce CCA's Australian drinks volume by about three per cent and deliver savings for Domino's franchisees.
"Domino's has already conducted trials on selling Pepsi products and is about to conduct trials on the smaller pizzas, but we see some risk to consumer perception from both of these initiatives," Mr Simotas said.
Comment has been sought from Domino's.
Domino's shares gained 43 cents, or 0.8 per cent, to $51.92 on Thursday.
