Domino’s raises pizza prices for first time in nearly four years: large up KRW 1,500, medium up KRW 1,000

Domino’s has decided to raise pizza prices in South Korea for the first time in nearly four years. Large pizzas will cost KRW 1,500 more and medium pizzas KRW 1,000 more. Other pizza brands have also been adjusting prices for pizzas, sides and drinks. For those assessing South Korea’s franchise market, these changes call for a clear distinction between menu prices, the costs borne by franchisors and franchisees, and what customers actually pay for an order.

First price adjustment since 2022

According to a report published by the Chosun Ilbo on 27 October, Domino’s decided on 12 October to raise its pizza prices. This is its first adjustment since 2022, nearly four years earlier. The increases vary by size: KRW 1,500 for large pizzas and KRW 1,000 for medium pizzas.

Domino’s cited sustained increases across a range of costs. It said higher ingredient costs, alongside rising costs throughout the process of getting products to customers, had made a price adjustment unavoidable.

The report said Domino’s head office had absorbed the additional costs until now, but had decided to raise prices as those costs continued to climb. The announcement therefore concerns an adjustment to selling prices to reflect accumulated cost pressures, rather than the pricing of a particular new product.

However, the increases by size should not be taken to mean that every pizza is rising by the same percentage. Even where the increase is KRW 1,500, the percentage change depends on the previous selling price. Individual menu items should be compared on a like-for-like basis using their old and new prices.

For customers, the difference between the increases for large and medium pizzas does not necessarily translate directly into the difference in the cost of an order. The total depends on the number of pizzas ordered and the choice of sides and drinks, so the price of a single pizza needs to be distinguished from the final bill.

From ingredients to delivery, several costs lie behind the increase

The costs referred to in the report cover the process of making and delivering pizzas, from purchasing ingredients through to delivery. Higher ingredient prices, electricity charges and delivery fees were cited as reasons for the increase.

This illustrates why pizza prices cannot be explained by ingredient costs alone. Inflation increases spending even when the quantity of ingredients purchased stays the same, while the costs of cooking and delivery also need to be considered.

That explanation does not, however, establish how much of each cost increase the higher prices will offset. The report did not give separate rates of increase for ingredients, electricity or delivery-related costs, or show how those changes correspond to the price rises.

The statement that head office had been absorbing costs does not mean franchisees’ financial performance had remained unchanged. The franchisor’s cost burden and individual outlets’ expenditure need to be considered separately. How much outlet profitability may change after the price rise is also a separate question.

Franchisees reviewing the change would benefit from comparing their own outlet’s cost records alongside selling prices, rather than looking at prices alone. Understanding which costs have changed, and by how much, is necessary to assess what the adjustment means for day-to-day operations.

It is particularly important not to equate revenue growth with improved profit. Higher selling prices alone do not establish how order volumes, total revenue or profit after costs will change. This announcement is about a price adjustment, not evidence of improved profitability.

Other brands adjust prices for pizzas, sides and drinks

Domino’s is not the only brand to have raised prices. According to the same report, Ogu Pizza and Paik Boy Pizza also increased pizza prices. Mr. Pizza raised side-dish prices by up to 20%, while Papa John’s increased drinks prices by 8.7%.

The key distinction is that different brands have increased prices for different product categories. Changes to pizza prices affect a different part of the customer’s order from changes to sides or drinks. Treating all of these as equivalent pizza price increases would make comparisons misleading.

Mr. Pizza’s figure of ‘up to 20%’ refers to the largest increase among its side dishes. It should not be read as a uniform 20% rise across all sides. Likewise, the 8.7% figure for Papa John’s applies to drinks, not pizzas.

Although the report mentioned price increases at Ogu Pizza and Paik Boy Pizza, it did not specify the amounts. There is therefore insufficient information to rank their increases against Domino’s size-based adjustments.

When comparing brands, it is best to use equivalent products and the same order composition. Separating pizza-only orders from those that include drinks and sides makes it easier to see the scope of each brand’s changes.

These distinctions also matter to the franchise sector. Although several brands have raised prices, they have not all chosen the same products or the same scale of increase. Individual cases should not be treated as a single, uniform trend applying to every brand.

Distinguish possible further increases from confirmed changes

The Chosun Ilbo raised the question of whether Domino’s adjustment would be followed by a wave of increases at other pizza franchises. This is a possibility to monitor, not confirmation that other brands have announced further price rises.

The confirmed information is Domino’s increase by pizza size, its explanation that costs have risen, and the product-specific adjustments made by some other brands. Claims about future implementation dates, affected brands or likely percentage increases would go beyond what has been established.

Prospective franchisees should not immediately use news of higher selling prices as a basis for projected profits. Instead, they should separately examine the sales records and cost conditions of the outlet they are considering. A brand’s pricing policy and an individual outlet’s commercial viability are connected, but they are not the same information.

For existing outlets, the priority when communicating with customers is to identify precisely which products have increased in price and by how much. Staff should clearly explain whether the changes affect pizzas, sides or drinks, and avoid presenting unconfirmed possibilities of further increases as a fixed schedule.

In practice, review the updated menu prices alongside the outlet’s cost records. Looking beyond the headline increases to actual order composition and cost pressures is the starting point for understanding this price adjustment.