The birthplace of pizza has vanquished America’s largest chain of pies.
Domino's has shuttered the last of its 29 branches in Italy, seven years after it started operations in the country, Bloomberg reported Tuesday.
The business news outlet said new delivery operations there born during the pandemic created unexpected competition that sank plans to open 880 stores over time.
A Domino's representative did not immediately respond to a request for comment. In January, its Italian franchising partner cited the increased competition as having hurt expansion plans.
“We attribute the issue to the significantly increased level of competition in the food delivery market with both organized chains and ‘mom & pop’ restaurants delivering food, to service and restaurants reopening post pandemic and consumers out and about with revenge spending,” said the group, ePizza SpA.
In an email, Federico Tozzi, the executive director of the Italy-America Chamber of Commerce, said that while other American fast-food chains, like McDonald's and Starbucks, continue to thrive in Italy, Domino's could not successfully challenge the country's existing pizza sources.
"I believe in Italy there are so many great pizza places (some of them organized in franchises) that the Italian consumer has so many great choices and therefore does not see Domino’s as a valuable alternative," he said.
Domino's reported otherwise healthy sales outside Italy during the coronavirus pandemic but said in its most recent corporate earnings report that it is struggling to find qualified drivers and that it is working to manage higher food prices in the inflationary environment.
“The delivery business continued to be more pressured,” Chief Financial Officer Sandeep Reddy said, especially with competition from third-party delivery apps.