Seven years after entering Italy, the homeland of pizza and pizza lovers, Domino’s Pizza has had to say a bitter goodbye. Reportedly, after failing to ace the Italian market, the US fast food giant is exiting the Italian market, after closing the last of its 29 stores in the region on Tuesday.
Domino’s entered the Italian market in 2015 thinking it could serve the traditional Italian dish with its American twist, including pineapple as a topping. The Michigan-based food chain had ambitious plans to expand in the Italian market by opening 800 stores.
However, the franchise, fast-food style of making pizzas did not go down well with the Italians who prefer the rustic, homemade feel of pizzas. It didn’t help that a global pandemic wrecked Domino’s business strategy as Italian pizzamakers also took the delivery route.
Reportedly, Domino’s had partnered up with ePizza SpA in a franchising agreement and sought to use its delivery prowess to outmuscle the market.
The tables turned after the pandemic
However, as the pandemic arrived, the traditional Italian pizza makers soon caught up by scaling their deliveries through partnerships with modern third-party delivery aggregators such as Just Eat, Takeaway.com, Glovo and Deliveroo Plc amongst others.
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Domino’s was never going to compete in the taste race with the Italian pizzamakers. It relied on its delivery speed and the ability to be ubiquitous — a formula that has worked effectively around the planet.
However, Italy turned out to be difficult dough to knead for the American company. Even in its last year’s fourth-quarter report, Domino’s franchise partner had noted the increased competition.
“We attribute the issue to the significantly increased level of competition in the food delivery market with both organized chains and ‘mom & pop’ restaurants delivering food, to service and restaurants reopening post-pandemic and consumers out and about with revenge spending.” said ePizza in its report.
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As of 2020, Domino’s operations in Italy had an outstanding debt of $10.8 million. It was only after the company knocked on the doors of a court in Milan that it was able to fend off the creditors for some time.
However, the relief expired last month and Domino’s decided to drop the shutter altogether on its remaining branches.
(With inputs from agencies)
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