Pizza Market Saturation? Domino's CEO Exits After Move Into Fried Chicken.

A boss of the UK's Domino's Pizza chain who indicated the United Kingdom might have reached peak pizza while broadening the chain into poultry items has been replaced after tensions with its board.

Leadership Shake-Up

Rennie is exiting after a brief tenure in the top role, and will be succeeded on an interim basis by the company's operations head, Nicola Frampton, while Domino's searches for a permanent CEO.

Rennie, who worked for Domino's for more than two decades, had attempted to shift Britain's largest pizza takeaway chain towards poultry-based products, commenting earlier this month there was not “massive growth” left in the pizza sector in the UK. He said chicken was the fastest-growing protein in the international market.

Governance Disagreements

Reports indicate that there was tension between the CEO and the directors over his focus and management style, although the company's official statement said he was leaving “by mutual agreement”.

Recent Brand Launch

In the autumn, Domino's launched its chicken-focused brand – which the former chief referred to as a “major strategic shift” for the organization – and is trialling it in over 200 locations in the north-west of England and the province.

While the business is still going to roll it out across its almost 1,400 stores next year as scheduled, it regards fried chicken as a supplement for its primary pizza operations.

Board Statement

Bull, the Domino's chair, said: “We are confident that there are a number of opportunities to enhance value and value creation in the main pizza segment. We are focused on identifying the right chief executive to oversee the careful implementation of that growth strategy.”

Industry Challenges

In the latest update, Domino's, which has 13 million customers in the British Isles, said transactions fell by one and a half percent in the third quarter. In the summer, it cautioned that the takeaway market had “intensified” as it attributed weaker consumer confidence in the lead-up to the budget and increasing labor expenses for below-target performance and a 15% drop in half-year profits.

Other pizza operators are also facing challenges. Pizza Hut announced the closing of dozens of outlets a recently, after the firm behind its outlets fell into administration.

Wellness Initiatives

Trying to keep up with consumer trends towards balanced diets, Domino's has rolled out light items, such as its light base line of bakes below 400 kcal as well as meat-free and gluten-free pizzas. A big pepperoni bake has 2,311 calories. A big margherita has 2,171, while a personal has under 1,000 calories.

Interim Management

Nicola Frampton has been with Domino's since the recent past, and had a background at the gambling company William Hill. It is understood that she is not seeking to assume the CEO position permanently.

She commented: “The company has a several ongoing development and efficiency programs that we will be dedicated to carrying out at pace.”

Frampton noted these included additional efforts on the company's procurement system and product development, and its customer retention initiative.

Domino's is also lacking a full-time CFO until 16 March, when a new appointee joins from the drinks company C&C Group. Until then, Snow serves as temporary CFO.

Kimberly Brown
Kimberly Brown

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