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Why This Adored Pizza Chain Is Still Struggling

Strong sales does not equal the expected profit for this pizza favorite.

This year has been a whirlwind, and pizza chains have seen their fair share of highs and lows. Papa John's saw some of their highest profits ever over the summer. They also recently announced the addition of almost 50 locations around Philadelphia and Southern New Jersey. Another pizza favorite saw sales rise, too, but Domino's is still struggling.

Before September 6, the company saw a 17.5% boost in sales compared to last year, according to Nation's Restaurant News. It was the most money the chain has seen during that time in almost 10 years. In August they revealed two new pizzas are coming to the menu this fall — cheeseburger pizza and chicken taco pizza. It was the first time in eight years that Domino's has released new versions. (For more on struggling restaurants, here are 9 Restaurant Chains That Closed Hundreds of Locations This Summer.)

However, costs from the effects of the coronavirus pandemic are adding up. Stores that closed because of COVID-19 lost the company about $7 million, according to CNBC. Ritch Allison, the company's CEO, says the total cost of paid sick leave, PPE, cleaning supplies, and frontline hourly compensation totals around $11 million. That chunk of change takes away some of the progress the company was hoping to make this year to reach 25,000 stores around the world by 2025. They currently have over 17,000.

Although Domino's is still struggling, the impressive sales have Allison focusing on the positives. "We don't have all the answers, but we'll continue to execute on our fundamental strengths," he says, according to NRN, noting that one area of progress they've seen is delivery times. The average was longer than usual in March and April when the pandemic began, but, "We have since improved and gotten back to where we were pre-pandemic or better," he says.

If all this pizza talk has made you hungry, there's something Domino's sells that is a surprisingly lighter choice. Before your next order, read up on why this beloved Domino's menu item is healthier than you think.

Amanda McDonald
Amanda has a master's degree in journalism from Northwestern University and a bachelor's degree in digital journalism from Loyola University Chicago. Read more about Amanda
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