Pizza Market Saturation? Domino's Pizza Chief Executive Exits Following Pivot Towards Fried Chicken.
A chief executive of Domino's Pizza Group who suggested the UK might have reached pizza saturation while broadening the company into poultry items has been removed after disagreements with its directors.
Executive Shake-Up
The former CEO is departing after a brief tenure in leadership, and will be succeeded on an acting basis by the company's chief operating officer, Nicola Frampton, while the pizza giant seeks a long-term chief.
The outgoing executive, who was with the company for more than two decades, had attempted to pivot the UK's biggest pizza delivery company towards fried chicken, commenting earlier this month there was not “massive growth” left in the UK's pizza market. He noted chicken was the fastest-growing menu item in the international market.
Board Tensions
Reports indicate that there was friction between the CEO and the governance team over his focus and direction, although Domino's announcement said he was departing “by mutual agreement”.
Recent Product Introduction
In September, Domino's introduced its chicken-focused brand – which Rennie described as a “major strategic shift” for the group – and is testing it in over 200 locations in the north-west of England and the province.
While the business is still planning to expand it across its almost 1,400 stores next year as intended, it considers fried chicken as an addition to its main pizza offerings.
Leadership Comment
Bull, the Domino's chair, commented: “The board believes that there are a series of prospects to drive further growth and performance improvement in our primary operations. We are prioritizing finding the ideal CEO to lead the careful implementation of that development approach.”
Market Difficulties
In the latest update, the pizza delivery giant, which has 13 million customers in the UK and Ireland, said sales fell by 1.5% in the latest quarter. In the summer, it cautioned that the food delivery sector had “grown more challenging” as it attributed reduced spending in the run-up to the government announcement and increasing labor expenses for below-target performance and a 15% drop in interim earnings.
Competitors are also struggling. Pizza Hut revealed the closing of multiple locations a recently, after the company behind its British operations entered insolvency.
Wellness Efforts
Responding to customer preferences towards balanced diets, Domino's has rolled out lower-calorie items, such as its light base selection of bakes below 400 kcal as well as plant-based and allergy-friendly options. A big pepperoni bake has 2,311 calories. A big margherita has 2,171 kcal, while a individual has 909 kcal.
Acting Leadership
Frampton has been with the company since the recent past, and previously worked for the gaming group a well-known operator. It is thought that she prefers not to occupy the chief executive role permanently.
She said: “Our team has a several current growth and performance initiatives that we will be concentrating on carrying out at pace.”
She said these comprised additional efforts on the company's logistics network and product development, and its rewards program.
Domino's is also in need of a long-term finance director until 16 March, when Andy Andrea joins from the beverage producer C&C Group. In the meantime, Richard Snow serves as acting financial officer.