Domino's Quits Business In Pizza's Origin Country Italy After 7 Years Of Stiff Competition

American pizza restaurant and delivery chain Domino¡¯s has decided to remove its footprint in pizza¡¯s origin country Italy. As Italians have been favouring local restaurants over the American version of pizza of Domino's, the company has decided to quit business and shut down the last remaining stores in Italy after seven years of operation,

The last of Domino¡¯s 29 branches have closed after the company started operations in the country seven years ago. It borrowed heavily for plans to open 880 stores, but faced tough competition from local restaurants expanding delivery services during the pandemic and sought protection from creditors after running out of cash and falling behind on its debt obligations, as per Bloomberg.

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The American multinational pizza chain had entered Italy in 2015 through a franchising agreement with ePizza SpA and planned to distinguish itself by providing a structured national delivery service along with American-style toppings including pineapple.

Its ambitious expansion in Italy ran into trouble as traditional pizza makers scaled up deliveries or signed deals with third-party services such as Deliveroo Plc, Just Eat Takeaway.com NV or Glovo to bring their products to customers¡¯ homes while restrictions prevented dining out.

¡°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,¡± ePizza said in a report to investors accompanying its fourth-quarter 2021 results.

The company had already reduced operations in the country from its peak in 2020 and stopped offering delivery from its website on July 29, the report mentioned.

Still, the closures came as a surprise to some of its customers, who turned to the chain¡¯s Italian social-media channels questioning why their calls and orders weren¡¯t going through or why their local store had shut.

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The report mentioned that Domino's followed an April tribunal in Milan that granted the company court protection against creditors for 90 days, according to an ePizza filing. The measures, which prevented lenders from demanding debt repayment or seizing company assets, expired on July 1. There have been no further updates on the court process, according to tribunal e-filings or the Italian Chamber of Commerce.

Domino's had 10.6 million euros ($10.8 million) of debt at the end of 2020, according to the latest audited annual reports.

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