Domino's prepares to retreat from foreign stores

Domino's saw sales across Iceland, Norway, Sweden and Switzerlandfall in the third quarter. Picture: Contributed
Domino's saw sales across Iceland, Norway, Sweden and Switzerlandfall in the third quarter. Picture: Contributed
Share this article
0
Have your say

The British arm of Domino's has said it is planning to withdraw from its foreign markets as they continue to decline.

The pizza delivery firm, which is currently hunting for a new chief executive and a new chair, saw sales across Iceland, Norway, Sweden and Switzerland drop 2.7 per cent to £25.2 million in the third quarter.

However, when cutting out the effects of the stores it sold, and fluctuations in currency, there was no change.

Outgoing chief executive David Wild, who has led the chain since 2014, said that a review had concluded Domino's would be better off selling the foreign business.

"We have concluded that, whilst they represent attractive markets, we are not the best owners of these businesses. The board has therefore decided to exit the markets in an orderly manner," he said.

It comes as UK and Ireland sales reached £288.2 million, a 3.9 per cent increase.

Wayne Brown, an analyst at Liberum, said the international exit was "likely to be complex".

But it will allow the firm to refocus around its UK and Ireland operation, which also faces challenges as a dispute with store operators drags on.

In May the company said it was holding an "open and ongoing dialogue" with its franchisees after they protested against a falling share of the profits they make for Domino's.

The dispute has disrupted plans to open new stores across the country.

Wild said: "Normal working practices continue to be impacted by our franchisee dispute.

"As we said at our interim results, this situation is complex and we expect a resolution to take time, certainly into 2020. We remain committed to working with our franchisees to agree sustainable win-win solutions."

Competition from new players, notably Deliveroo and Uber Eats, has eaten into a delivery market traditionally dominated by pizza.