Domino’s prepares to withdraw from foreign stores amid lacklustre sales
The pizza maker will sell its stores in Iceland, Norway, Sweden and Switzerland.
The British arm of Domino’s has said it is planning to withdraw from its foreign markets as they continue to decline.
Outgoing chief executive David Wild said that a review had concluded Domino’s would be better off selling the business, which stretches across Iceland, Norway, Sweden and Switzerland.
“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.
Normal working practices continue to be impacted by our franchisee dispute David Wild, chief executive
It comes as sales in the markets dropped 2.7% to £25.2 million. However, when cutting out the effects of the stores it sold, and fluctuations in currency, there was no change.
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.
Mr 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.”
Meanwhile, Domino’s is continuing its hunt for a new boss with Mr Wild, who has led the pizza delivery chain since 2014, set to step down.
The company, which has also kicked off a process to find a new chair, said its UK sales grew faster in the third quarter by 3%, from 2.2% in the same period last year. It comes as UK and Ireland sales reached £288.2 million, a 3.9% increase.
But competition from new players, notably Deliveroo and Uber Eats, has eaten into a delivery market traditionally dominated by pizza.