Connect with us

Business

Domino’s Pizza Enterprises Faces Challenges in France and Japan, Goldman Sachs Criticizes Strategy

Published

on

Times News Global Featured Image

Domino’s Pizza Enterprises is navigating difficulties in its operations in France and Japan, prompting criticism from Goldman Sachs over its strategic approach.

The ASX-listed company, led by long-standing CEO Don Meij, faced scrutiny from Goldman Sachs after a recent strategy day revealed a lack of transparency and conviction in addressing the challenges in key markets.

Despite being a standout performer during the COVID-19 pandemic, Domino’s shares dipped below $40, signaling a trend of declining profitability overseas.

One of the company’s missteps included a failed attempt to implement delivery surcharges to offset rising costs, coupled with slower-than-expected growth in crucial Asian and European markets.

Goldman Sachs analyst Lisa Deng highlighted that Domino’s management had not sufficiently addressed core issues in regions like France and Japan, fueling doubts about the path to recovery beyond resorting to discounting and halting store expansion.

Competition in the fast-food sector remains fierce, with Pizza Hut, under new ownership by California’s Flynn Restaurant Group, also eyeing expansion in Australia.

Citi analyst Sam Teeger suggested possible store closures in Japan as Domino’s grapples with overextension and underperformance in the market.

Despite challenges, Domino’s aims to increase its presence in Japan to 2000 stores by 2033, even as the company navigates the impact of strategic decisions like introducing a sub-1000-yen menu and exploring third-party delivery avenues.

Following its investor day, Macquarie analysts revised earnings forecasts downward, citing concerns about a slower store rollout and weakening margins in Asia.

The structural obstacles in key markets like France and Japan have yet to be fully resolved, signaling ongoing challenges for Domino’s Pizza Enterprises.

Rachel Adams

Times News Global is a dynamic online news portal dedicated to providing comprehensive and up-to-date news coverage across various domains including politics, business, entertainment, sports, security, features, opinions, environment, education, technology and global. affairs. Our commitment lies in sharing news that is based on factual accuracy, credibility, verifiability, authority and depth of research. We pride ourselves on being a distinctive media organization, guided by the principles enshrined in Article 19 of the Universal Declaration of Human Rights. Made up of a team of ordinary people driven by an unwavering dedication to uncovering the truth, we publish news without bias or intimidation.