Domino’s Pizza Enterprises is to close 205 loss-making stores in a bid to boost profitability.
The pizza chain will shutter 182 APAC stores, 23 in Europe, and four in Australia and New Zealand. Of the 172 stores to close in Japan, 114 are corporate-owned and 58 are franchised.
Domino’s bought out its Japanese partner in 2017; in 2023 it had achieved a footprint of 1000 stores in Japan. In July last year it announced the first store closures.
Domino’s to close 205 stores to strengthen network
Mark van Dyck, Domino’s Pizza Enterprises CEO and managing director, said “Some of our Covid-period expansion resulted in stores that simply weren’t optimal based on our current customer proposition and removing them will strengthen our network.”
Overall Domino’s believes the store closures will bring in $10 million to $12 million annualised earnings before interest and taxes (EBIT). The restructuring costs are expected to be $61.8 million.
Domino’s intends to reinvest savings in the franchise partner network but has not yet determined the investment level.
“Our priority remains clear—creating value for customers, franchise partners, and shareholders,” said van Dyck.
Pizza chain focused on cost efficiency and growth
“To reach our potential, we are taking decisive action. We are also refining our value proposition and improving our pricing strategy to position existing and new stores for sustainable success,” he said.
The business has focused on cost efficiency and strategic growth and has so far achieved $18.6 million of annualised network savings.
“We are committed to being disciplined in expansion—prioritising locations in high density prefectures where we can drive incremental, profitable growth,” said van Dyck.
Domino’s predicts the group’s underlying net profit before tax for the first half of FY25 will be between $84 million and $86 million.
- A shareholder class action was launched against Domino’s Pizza Enterprises in September 2024 alleging misleading information about the prospective performance of the Japan market.
