Pizza Market Saturation? Domino's CEO Exits After Pivot Into Chicken.
A boss of Domino's Pizza Group who indicated the United Kingdom might have reached peak pizza while diversifying the franchise into poultry items has been removed after tensions with its board.
Leadership Shake-Up
Rennie is departing after a brief tenure in charge, and will be succeeded on an interim basis by the organization's operations head, Nicola Frampton, while Domino's looks for a permanent CEO.
Rennie, who worked for the company for more than two decades, had attempted to shift Britain's leading pizza takeaway chain towards fried chicken, remarking recently there was not “significant expansion” left in the UK's pizza market. He noted poultry was the fastest-growing protein in the international market.
Board Tensions
Sources suggest that there was disagreement between Rennie and the board over his strategy and direction, although Domino's release said he was leaving “through mutual consent”.
New Brand Launch
In September, the chain introduced its poultry offering – which the former chief described as a “major strategic shift” for the company – and is testing it in 210 outlets in the North West region and Northern Ireland.
While the company is still going to roll it out across its extensive network next year as planned, it views fried chicken as a supplement for its main pizza offerings.
Leadership Comment
Bull, the Domino's chairman, said: “Directors think that there are a range of possibilities to drive further growth and value creation in the main pizza segment. We are concentrating on selecting the suitable leader to lead the disciplined execution of that expansion plan.”
Industry Difficulties
In the latest update, Domino's, which has a substantial customer base in the UK and Ireland, said orders dipped by 1.5 percent in the Q3. In August, it alerted that the quick-service industry had “become tougher” as it blamed reduced spending in the run-up to the budget and higher payroll outlays for weaker-than-expected sales and a 15 percent decline in interim earnings.
Other pizza operators are also struggling. Another major chain disclosed the shutting of dozens of outlets a recently, after the firm behind its British operations fell into administration.
Wellness Efforts
Responding to market shifts towards healthier eating, Domino's has rolled out lower-calorie options, such as its Thin & Crispy selection of bakes below 400 kcals as well as vegan and wheat-free pizzas. A family-sized pepperoni has 2,311 kcals. A family cheese pizza has over 2,100, while a individual has 909 calories.
Interim Leadership
Frampton has been with Domino's since the recent past, and previously worked for the gaming group William Hill. It is understood that she is not seeking to take on the CEO position permanently.
She said: “We have a multiple current expansion and efficiency programs that we will be focused on implementing at a rapid rate.”
She added these included ongoing development on the organization's procurement system and product development, and its customer retention initiative.
The pizza chain is also without a long-term finance director until the spring, when a new appointee joins from the Irish cider and beer maker a well-known firm. In the meantime, Snow acts as interim finance chief.