Domino’s tried to sell pizza to Italians. It failed

Italy – Seven years after its debut in Italy, American pizza giant Domino officially closed its stores after failing to win over locals who preferred homemade options, it was learned. Domino’s work in Italy was more difficult than it seemed.

EPizza SpA, the franchise operator of the Domino’s (DMPZF) brand in Italy, filed for bankruptcy in April after struggling to generate sufficient sales during two years of pandemic-related restrictions, according to a document filed in a Milan court.

According to a report by Food Service, an Italian food industry publication, the company closed all of its Domino’s stores on July 20.

One could attribute Domino’s failure to its brazen attempt to break into the homeland of pizza with US tariffs, but ePizza said it went bankrupt due to competition from food delivery apps.

The Milan-based company is facing unprecedented competition from local restaurants, which have taken to services such as Glovo, Just Eat and Deliveroo during the pandemic, the lawsuit says.

A Domino’s document attached to the lawsuit says ePizza’s troubles last year were the result of a “significantly increased level of competition in the food delivery market with both organized chains and ‘mom & pop’ restaurants delivering food to survive.”

The company also said it ran into problems after pandemic restrictions were lifted and consumers began to visit sit-down restaurants again.

The Milan court granted the company a 90-day grace period during which its creditors were not allowed to demand repayment or take its assets. Which expired at the beginning of July.

In 2015, Domino’s entered the Italian market by signing a 10-year franchise agreement with ePizza. At the time, the company had high hopes. They planned to introduce a large-scale pizza delivery service into the country, which did not exist at that time, according to the court complaint.

By early 2020, ePizza operated 23 stores in Italy and six more through a sub-franchise partner.