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Even pizza prices are headed higher amid elevated inflation.
Papa John's said this week that the company increased prices 7% in the first quarter to help offset inflationary pressures. Despite the price increase, Papa John's still saw North America same-store sales gain 1.9%.
"We have got great demand for our products [and] positive comparable sales in the first quarter despite the most challenging operating environment we have ever seen," said Papa John's CEO Rob Lynch on Yahoo Finance Live (video above). "We do see some improvement, at least a plateau on some of the inflation on both the food costs as well as maybe some of the wage inflation starting to normalize. I wouldn't say it's going down yet but staffing levels have sequentially improved throughout the year. January was by the far the toughest month for us."
The price increases on pizza reflect several factors inherent to most fast-food chains: Labor costs for everything from the person prepping the pizza to the person delivering it are on the rise amidst a tight job market, transportation costs are on the rise owing to higher fuel costs, and ingredient costs are the rise — notably wheat, chicken and cheese.
Domino's lifted the price of its entry level pizza to $6.99 from $5.99 for a delivered pizza, an increase of 16%. Consumers appeared to balk at the increase unlike at Papa John's — Domino's U.S. same-store sales fell 3.6% in the first quarter.
Papa John's said this week that the company increased prices 7% in the first quarter to help offset inflationary pressures. Despite the price increase, Papa John's still saw North America same-store sales gain 1.9%.
"We have got great demand for our products [and] positive comparable sales in the first quarter despite the most challenging operating environment we have ever seen," said Papa John's CEO Rob Lynch on Yahoo Finance Live (video above). "We do see some improvement, at least a plateau on some of the inflation on both the food costs as well as maybe some of the wage inflation starting to normalize. I wouldn't say it's going down yet but staffing levels have sequentially improved throughout the year. January was by the far the toughest month for us."
The price increases on pizza reflect several factors inherent to most fast-food chains: Labor costs for everything from the person prepping the pizza to the person delivering it are on the rise amidst a tight job market, transportation costs are on the rise owing to higher fuel costs, and ingredient costs are the rise — notably wheat, chicken and cheese.
Domino's lifted the price of its entry level pizza to $6.99 from $5.99 for a delivered pizza, an increase of 16%. Consumers appeared to balk at the increase unlike at Papa John's — Domino's U.S. same-store sales fell 3.6% in the first quarter.
