Domino’s closes its store in Italy after failing to conquer the pizza house

Domino’s Pizza has closed its Italian stores after seven years after the American brand struggled to win customers in the birthplace of pizza.

The fast food chain’s Italian franchise partner, ePizza SpA, which operated 29 branches across the country, filed for bankruptcy in early April.

Through insolvency proceedings, it obtained 90-day court protection from its creditors, which prevented them from demanding repayments or seizing company assets. But the stay ended last month.

Domino’s Italian operations have succumbed to a combination of falling sales, rising operating costs, high debt loads and “an exponential increase” in competition from traditional pizzerias offering delivery through apps, such as Glovo , Just Eat and Deliveroo, according to April bankruptcy filings. .

The pizza chain, headquartered in Michigan, has about 18,800 stores in 90 markets around the world, most of which are operated by franchisees.

As recently as early 2020, the US chain announced ambitious plans to add 850 stores in Italy and achieve 2% market share by 2030, but the pandemic has pushed its Italian franchise partner to the brink . “The Covid-19 pandemic and the successive prolonged restrictions have seriously harmed. . . ePizza, the bankruptcy filings added.

Domino’s stopped accepting delivery orders from its Italian website on July 29. Domino’s Pizza Inc, the U.S. umbrella company, did not immediately respond to a request for comment. Marcelo Bottoli, chairman and main shareholder of ePizza SpA, declined to comment when contacted by the Financial Times.

Last month, German grocery app Gorillas announced it was pulling out of the Italian market, along with several other European countries.

News of Domino’s closing in Italy, first reported by Bloomberg, is another indication of the mixed fortunes of American restaurant brands hoping to succeed with discerning Italian consumers.

The arrival of the first Starbucks in Italy in 2018 was met with skepticism. But Howard Schultz, CEO of Starbucks, said last week that the coffee chain, which operates a single cafe in Milan, was “thriving” and would add two more branches in Rome and Florence.

In 2021, ePizza SpA recorded sales of €10.4 million, up 8.6% year-on-year, but down 36.8% from target sales for this year- the. As of December 2021, the company’s cash reserves were only €492,000, almost 80% less than budgeted.

In a business update released in April, the company blamed the poor sales performance on increased competition from “‘mom and pop’ restaurants” as well as “revenge spending” at restaurants when pandemic restrictions eased. relaxed.

Additional reporting by Donato Paolo Mancini

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