Why India has world's cheapest Domino's pizza sold for $0.60?

Domino's in India has become home to the world's cheapest pizza as it is sold at the price of INR49 ($0.60) in a smart way to battle the skyrocketing inflation in the country.

According to the CEO of its franchisee there, the INR49 ($0.60) pizza in India, Domino's No. 1 market outside of the US, represents the tip of the spear in its battle against rapid inflation that is pinching profitability and pricing out many customers.

Asserting that the basic, seven-inch cheese pizza with a "sprinkle" of basil and parsley is Domino's cheapest offering in any of the pizza chain's franchises, Sameer Khetarpal said the company wants to "own that price point".

"You are coming to the store or open the app because there is a 49-rupee callout," he said, adding that Domino's global team supported the plans. "Customers are going to eat out less because prices are higher everywhere - our existing consumers should not go out to some competition."

In contrast, in Shanghai, Domino's (DPZ.N) cheapest savoury pizza is priced at about $3.80, and in San Francisco about $12, according to online menu prices.

Domino's global HQ referred queries about India to its local franchisee.

According to Reuters interviews with interviews of six executives and 12 store managers revealed how Domino's and other global fast-food giants like Pizza Hut and Burger King are being forced to change tactics to weather rampant inflation in the market of 1.4 billion people.

The businesses are vying for market share in a country that is crucial to their futures, where sizzling samosas can be had for as cheap as 10 rupees, and where it is challenging to compete with a street food culture.

Khetarpal, whose Jubilant FoodWorks (JUBI.NS) runs Domino's 1,816 outlets in the country, says he holds a staff meeting first thing every Monday to brainstorm new ways to manage costs and fight the "historic high inflation" that contributed to its profits sliding 70% in the first three months of 2023.

He gave new details of Domino's India pivot and its financial gains; his company has removed lids from all boxes of pizzas sold at stores starting December, saving 0.6 cents each time. He said that amounts to a significant saving in packaging costs because 37% of Domino's Indian business is dine-in.

Jubilant - whose Domino's business accounted for most of its $635 million in revenues last year - also aims to secure rent rebates from some store landlords by offering upfront payments, Khetarpal said, declining to give further details about cost benefits.