The U.S. food industry is taking the brunt of the ongoing labour shortage, and even the world’s largest pizza company, Domino’s Pizza Inc (NYSE: DPZ), doesn’t have it any better.
Highlights from CEO Allison’s interview with CNBC’s “Squawk Box”
On CNBC’s “Squawk Box”, Domino’s CEO Richard Allison agreed the labour shortage was hitting the pizza restaurant chain and said it was “one of the tightest labour markets” the U.S. has seen in a long time.
We’re doing a lot of things in our control to tackle the labour shortage. We’ve been raising wages in our corporate stores and supply chain centres, adding benefits, improving processes, and bringing technology to improve workers productivity in our stores. But it’s a challenging time for sure.
Just last month, Domino’s said its U.S. comparable sales turned negative in the fiscal third quarter. The American multinational reported lower-than-expected revenue, but its earnings topped Wall Street estimates in Q3.
Domino’s grew massively amidst the pandemic: is it sustainable?
Domino’s was a pandemic play, which is quite obvious in the stock price that is up more than 30% just this year. According to CEO Allison, however, the pizza company is well-positioned to sustain growth even after the pandemic. He added:
If you look at our U.S. and International businesses, both are significantly larger than before the pandemic in 2019. As a brand, we have a proven track record of growing in prosperous times and not so prosperous times.
The chief executive expects higher labour and ingredients costs to be in place for some time but said Domino’s was doing everything in its power to digest inflation. In October, the pizza company said it will hire more than 8,000 drivers in the UK and Ireland before Christmas to meet the higher demand in the holiday period.
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