Italy beat Domino’s in what it does best: pizza; after the American chain announced that closed the last restaurant it had in the European country.
The Domino’s operations in this country where pizza was born lasted only seven years and 10 locations, of which 880 that had been planned when the chain landed on Italian territory
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Unlike what Domino’s experienced during the pandemic in other markets, in Italy, the development that pizzerias had, supported by a effective distribution system, created an ecosystem in which the chain could not compete.
The partner with which Domino’s entered Italy in 2015, the ePizza SpA franchise, warned since last January, when he warned that the network of local businesses had been strengthened during the pandemic and had created unexpected competition.
“We attribute s the problem at the significantly higher level of competition in the food delivery market with organized chains and restaurants that deliver food”, warned ePizza SpA in a 2021.
Q4 Investor Report But that was just the last factor that ended up closing the Italian adventure of the American pizza giant, because Domino’s could never get over the fact that Italians prefer local pizzas to the American version.
The business structure did not help Domino’s to grow either, much less to remain in the Italian market, since the company’s partner ended up getting into debt and owing to his creditors due to the ineffectiveness of their model.
Domino’s and ePizza SpA designed an offer in which their brand value consisted of a robust model of national delivery and variety of ingredients different from the Italian ones years, like pineapple.
But they did not contemplate that local restaurants would form agreements with delivery services to expand their coverage and compete with the strongest point of Domino’s offer; the result was that consumers opted for traditional pizzas.
According to a report by Bloomberg, Third-party services such as Deliveroo Plc, Just Eat Takeaway.com NV or Glovo played a strategic role in shaping the competition, which gave the pizza chain no respite.
Domino’s disappeared, but left a millionaire debt
Domino’s exit from the Italian market Not only did it take consumers by surprise, who sought a response on social networks for the lack of attention to their calls, but also the company’s creditors.
The controversy moved to the courts and last April, a court in Milan granted judicial protection to ePizza SpA against its creditors for 60 days, so that the lenders could not demand the payment of their debt, which expired on July 1.
According to court reports, ePizza SpA had a debt of 10.6 million euros, around 10.8 million dollars, at the end of 2020.
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